IN THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT
IN AND FOR LEON COUNTY, FLORIDA
INVESTMENT CORPORATION, )
DEPARTMENT OF BUSINESS
REGULATION, a Department
of the State of Florida, )
GORDON J. PFERSICH, etc.,
Case To. 75-295
Case :;o. 79-762
FINDINGS OF FACT,
AND FINAL JUDGMENT
CONCLUSIONS OF LAW1/
ON "TAKING" ISSUES-
FINDINGS OF FACT
1. This case involves factually complex circumstances,
which, in the Court's judgment, are unique. [See McLouth at
2. Many of the relevant facts were established through
a 25-page pre-trial stipulation. Other facts were established
at a four-day non-jury trial which was held from April 26, 1982,
1/ References to testimony at the four-aay trial from April
26, 1982, through April 29, 1982, will be indicated by the
witness' name and page number; references to the exhibits will
be indicated as plaintiff's, intervenors' or defendants' exhibit
with its number.
... \ : ..... .... ...
through April 29, 1982. The Court heard the testimony of nine
live witnesses and received into evidence the deposition
testimony of two witnesses and more than 100 documentary exhibits
(including transcripts of sworn testimony of five state
3. The Court has considered and evaluated the
documentary exhibits and the testimony of:
Anthony Trella, president of the plaintiff, Atlantic
International Investment Corporation ("Atlantic"), and
president of the holding company that owns Atlantic's
stock, Mondex, Inc. ("Mondex"). [Trella at 4-5]. Mr.
Trella has been president of Mondex since 1969 and was
on the Board of Supervisors of South County Drainage
District ("SCDD") beginning in 1969 as well. [Trella
at 23-243. Mondex and its subsidiaries are in a wide
variety of land development businesses, including land
development, land planning, golf course construction,
completed homesite development, residential construction,
condominium and townhouse planning and construction,
heavy construction for private and governmental entities,
--and construction management. Mondex subsidiaries had
more than ten land sales projects. [Trella at 5-8].
In no other venture has any Mondex subsidiary failed
to accomplish promised improvements. [Trella at 613.
Mr. Trella is a member of the prestigious Urban Land
SInstitute, is a lecturer for the Urban Land Institute
and the Homebuilders Association of South Florida [Trella
at 83, and is an experienced businessman in the
development and construction industry. He testified
concerning the history of Cape Atlantic Estates and
the effect of the various events on Atlantic.
Jorge Garcia is a civil engineer with twenty-six
years' engineering experience, fifteen of those as a
registered engineer in Florida. [Garcia at 4].
Beginning in 1970, he was chief engineer for the SCDD,
is familiar with all SCDD plans of reclamation, was
responsible for their revision and supervised the actual
construction of the main canal in the late 1960's and
1970, was the person who had contact with involved
government agencies, was constantly on the land during
the initial construction, and is a well qualified expert
as well as a person with personal knowledge of many
of the facts in this case. [Garcia at 5, 91-92; Trella
at 87]. He has been chief engineer for a drainage
district of similar size with similar soil and drainage
conditions in this area of Florida, in which the work
has been completed. [Garcia at 5-63. He not only was
responsible for the 1969 and 1971 plans of reclamation
for the SCDD [Garcia at 73 ann the construction of the
main outfall canal, but he also coordinated the Fredric
R. Harris and Company modifications prepared in 1974
(the "Harris Report," Plaintiff's Exhibit 28). [Garcia
Eugene Lipman is the Senior Vice President and Chief
Financial Officer of both Atlantic and Mondex. [Lipman
at 4-53. He has been chief financial officer of those
companies since 1969. He also served as a member of
the board of supervisors and treasurer for the South
County Drainage District (SCDD). [Lipman, Volume I,
at 73. It is he who is most familiar with Atlantic's
financial records. An accountant by education and
experience and well qualified in matters of corporate
finance, financing, preparation and maintenance of
corporate books and records [Lipman, Volume I, at 19-
20], he also is personally familiar with many of the
facts in the case. He testified concerning Atlantic's
..* -_ --
financial expectations and the effects of the various
events on Atlantic's financial conditions, as well as
other factual matters.
Malcolm McLouth is a registered engineer with many
years experience in land development. He is an
environmental engineer and an officer of Stottler, Stagg
and Associates/Brevard Engineering, a large
architectural, engineering, planning firm located in
Cape Canaveral, Florida, specializing in environmental
engineering, often for governmental agencies. [McLouth
at 56-58; Trella at 44-45). In 1972-1973 Brevard
Engineering was hired to prepare an environmental impact
study, which it did, for submission to the Department
of Pollution Control ("DPC") and ot-er interested
agencies. Mr. McLouth was responsible for the report
and coordinated with outside experts and members of
other disciplines in preparing the report. [McLouth
at 563. In addition, in 1977, he was asked for and
prepared cost estimates for a partial development of
the property consistent with the terms of the 1977
Department of Environmental Regulation ("DER") permit
that finally issued and in view of the additional delays
which appeared would be caused by St.. John's River Water
Management District's ("St. John's") newly asserted
jurisdiction. [McLouth at 61-623.
Additionally, Mr. McLouth was asked to prepare,
and did prepare and present at trial, complete cost
estimates for the construction of the project as of
the alleged date of taking, September 1, 1977. [McLouth
at 63-643. As Mr. McLouth testified, the estimates
assumed that construction could only start if the go
ahead had been given from all agencies to begin
construction on September 1, 1977. If that had occurred,
the final drawings and contracting process would take
ten to twelve months and construction could begin only
in mid-1978 and, even with expedited construction, would
run for three years. [McLouth at 66, 733. Mr. McLouth
also prepared a graphic representation of inflation
in the construction industry in Florida from. 1967 through
1981. [McLouth at 69-73; Plaintiff's Exhibit 453.
Charlie Knight is a highly qualified expert in real
property appraisal. In addition to his other
qualifications and his thirty years' experience in
appraisals, he has been designated an MAI appraiser
for twenty years, is a senior number of the American
Society of Appraisers, ,and is an instructor in appraisal
methods. His clients have included governmental agencies
including the State of Florida, the Southwest Florida
Water Management District, the United States Department
of Justice, and the Internal Revenue Service. [Knight
Two additional witnesses appeared for Atlantic by
deposition, Alan Dakan, the attorney for Volusia County
who had handled the litigation and negotiations between
Volusia County and Atlantic concerning the South County
Drainage District, and Brice Dennis Auth, the projects
manager for St. John's River Water Management District.
Additionally, the prior sworn statements of the
four employees of the Department of Environmental
Regulation who had voted to deny the permit application
in 1974 were admitted as admissions as was the sworn
statement of an employee of St. John's River Water
Management District, who had testified in opposition
to the permit application in 1975.
Max Simon, the representative of the class of
purchasers of lands at Cape Atlantic Estates, testified
for the plaintiff intervenors. He testified that
he purchased his lot in Cape Atlantic Estates after
reviewing the public offering statements, verifying
with the Division that Atlantic was a responsible company
and determining that it would be wise to purchase the
lands. [Simon at 41-42, 49-523. He testified that he
hoped to be able to use the lands, either as an
investment or physically. [Simon at 433. He testified
that he had no physical access to his lot; that he could
not locate it on the ground; and that he could neither
use nor sell it. [Simon at 453. On behalf of the class,
"he accepted Atlantic's assignment of the oause of action
for the taking. [Simon at 46, 483.
Defendants produced three witnesses. Nevin Smith,
a well qualified civil engineer, had been hired by the
defendants in February 1982 to give an opinion of the
Broward Davis,.a registered land surveyor and the
- ::- ::- president of a well-respected Tallahassee land planning
firm, also testified for the defendants. [Davis at 93.
Mr. Davis has attended and taught courses in land
surveying. [Davis at 10). Mr. Davis testified that
the State retained him to look at "Cape Atlantic Estates
from a standpoint of a large tract of land in Volusia
County [and] their desirability for development." [Davis
at 173. He also was asked to evaluate the desirability
of the current grid system of some 5,000 individual
tracts. [Davis at 173.
Thomas Anderson, a real property appraiser with
the Department of Natural Resources, also testified
for the defendants. [Anderson at 44-45). Mr. Anderson
testified that the highest and best use of the property
would be agricultural. [Anderson at 573. In determining
the value of the property as of September 1, 1977, he
was asked to determine it "for the property as a whole,"
rather than for checkerboarded lots without access and
drainage. [Anderson at 58]. He was not asked for an
opinion of the value of the lots if the improvements
4. Plaintiff Atlantic Inter.iati-nal Investment
Corporation ("Atlantic") is a Florida corporation. Plaintiff-
intervenor Max Simon is the representative of a class of
purchasers at Cape Atlantic Estates ("Si--on class"). Some of
the class members were deeded on the alleged date of taking.
Other class members, who were not deeded on the alleged date
of taking, have been assigned Atlantic's right to the taking.
[Lipman at 41). Mr. Simon accepted the assignment on behalf
of the class. [Simon at 46, 48). Harold Housewart, a purchaser
but not a member of the Simon class, was added as a plaintiff
at trial. [Lipman at 22-24].
5. The State opposed the certification of the class
and challenged the standing of the class members, arguing that
only owners on the alleged date of taking, not purchasers, had
the cause of action for inverse condemnation. This argument
was based upon the fact that the purchasers had no obligation
to make payments under their agreements for deed and had no
right to possession of the property. The agreements for deed
are thus distinguishable from where a purchaser is contractually
obligated to pay for the property and/or has possession, in
- :-- ;-
which case the purported retention of title is merely a security
interest. The agreements for deed in this case could be
analogized to an option, which ripens into a contract right
only if all the payments are continued to be made. Because
of the limited nature of the agreements for deed, Atlantic has
filed with the Court and with certain individuals an assignment
of. its cause of action for inverse condemnation as to each
purchaser's individual lot to those purchasers who were current
on their contracts on the alleged date of taking and who were
subsequently deeded or have continued to pay. The court rejects
the state's argument that without an'individual acceptance of
that assignment by each purchaser individually, the assignment
is ineffective. The assignment is clearly for the benefit of
the purchasers, and it is assumed -hat those who have elected
to be part of the class have accepted it and the acceptance
or the acceptance on their behalf by the class representative
for the purpose of this litigation is effective.
6.. The defendants were the State of Florida, the
Division of Florida Land Sales and Condominiums ("Division")
its director, the Department of Pollution Control ("DPC"), later
to become the Department of Environmental Regulation ("DER"),
St." John's River Water Management District ("St. John's"), and
Volusia County. DBR and DER are departments and agencies of
the State of Florida. The Division is a division of DBR. St.
John's is an agency of the State of Florida with certain
statutory responsibilities and certain responsibilities delegated
from DER. Volusia County is a political subdivision of the
State of Florida.
7. In 1975, Atlantic sued the Division of Land Sales,
Volusia County, and DER alleging that the Division had instituted
an administrative action to revoke Atlantic's registration under
_IIIIIL __ _~U--
--_ _~rC~~'YY------Y _~ II _~ ii~LI
the land sales law because the planned improvements had not
been installed at Cape Atlantic Estates by December 1973, while
at the same time, DPC had refused to permit the improvements.
It was also alleged that Volusia County, which had a contract
with Atlantic to use its best efforts to secure all necessary
permits, had, in fact, through the head of one of its
departments, actively opposed the improvements. The relief
sought included injunctive relief, compensation for the
possibility that these inconsistent actions had resulted in
a taking of Atlantic's property or its contracts with its
purchasers, and, in a separate count, damages against Volusia
County for.breach of contract.
8. On motion to dissolve a temporary injunction, Judge
Cawthon of this court, recognizing t-e potential conflict between
the Court and the administrative tribunals which might be
associated with the permitting process (the denial of the permit
had by then been made a subject of an administrative appeal
under the old administrative procedures act), ruled that the
parties should exhaust the administrative permitting proceeding,
but that he would retain jurisdiction over the "taking" claims
and other constitutional issues raised by the pleadings. In
so ruling,' Judge Cawthon warned: -
the agencies can increase the ultimate
liability of the State vastly by a mishandling
of the administrative proceedings. That is
going to be the damages and the value of the
compensation of the taking, if it turns out
to be that. It is going to depend a great
deal on the way that the administrative
agencies handle their jobs. [Transcript of
SHearing of March 11, 1975, at 823.
Volusia County appealed that ruling (as an interlocutor order
in equity) arguing particularly that the case should have been
dismissed because of a failure to exhaust administrative remedies
and that the circuit court lacked jurisdiction. The District
Court of Appeal affirmed Judge Cawthon's actions, ruling: "We
find no reversible error."
. ; ; *- : ': .: .. .
9. The administrative proceedings lasted, with appeals,
until 1977, when a permit was issued. Thereafter, having
determined that the improvements could -nst '-e installed because
of financial considerations, Atlantic demanded that the proceeds
of a certain improvement trust account under the control of
the Division of Florida Land Sales be released to it to
distribute to its purchasers. The Division refused and Atlantic
instituted an action to require the trust fund to be released.
Almost simultaneously with the filing of that action, the
Division of Florida Land Sales issued an order to show cause
why Atlantic should not turn over all Of its assets (including
its remaining lots) to the Division for the purpose of
distribution to the purchasers. Atlantic amended its recently
Tiled complaint concerning the trust fund to seek to enjoin
the Division's action as an attempted taking of its property.
That case and the pending 1975 action were consolidated. Amended
and supplemented complaints were subsequently filed.
10. Since the consolidation of these actions, many
of the issues have been resolved: (1) the Division dismissed
its 1974 order to show cause why Atlantic's registration should
not be revoked in 1975;_ (2) the issues concerning the trust .
account were resolved in part by stipulation, then transferring
by stipulation the remaining trust account issues to a companion
case which has been resolved; and (3) the 1979 adminstrative
order to show cause from the Division was dismissed as part
of the settlement of the trust account issues, thus eliminating
most 'of the claims specifically against the Division.
11. Five defendants in the subject case have been
dismissed. The court ruled that Volusia County was not a
necessary party to Count I (the "taking" count) and dismissed
it, as it did the St. John's River Water management District
which had been added as a party in connection with the
consolidation with the 1979 action, ruling, however, that the
actions of all state subdivisions and agencies (specifically
including Volusia County and St. Johns) would be relevant on
the issue whether the combined acts of the various state agencies
involved in this case might have resulted in a taking. On April
29, 1982, at the close of the plaintiff's evidence in this case,
which involved only the question whether the various state
agencies resulted in a taking, the Court dismissed DBR, the
Division and its directors. Once again, DBR's and the Division's
acts, including the circumstances of the laws which Atlantic
was required to follow, are relevant, in the particular
circumstances of this case, in determining if the combined
actions and inactions of the various state actors have resulted
i a taking. Thus, the court Thas ru'lea that the only necessary
party to this case is the State of Florida. Volusia County's
actions were in some instances accidental and others may have
been unauthorized, but without the State's approval of the
Volusia charter provision abolishing the SCDD and without DER's
unreasonable position insisting on jurisdiction but refusing
to discuss the project, ignoring the practical problems such
a position created, and ignoring the fact that the ownership
of the lots dictat-ed both a speedy resolution and a geographical
limitation on the design, the taking would not have occurred.
Although St. John's actions in late 1977 and 1978 clearly were
designed to delay or frustrate the project, and as state actions
are relevant as to matters of intent, public benefit, and
arbitrary and capricious actions, the realities faced by Atlantic
when forced to abandon the project were in place by the date
of taking which the court finds to be September 1, 1977, and
St. John's actions before that date were not extensive. DER,
however, is another matter. Although the Court finds that the
cumulative actions of all the state actions amounts to a taking,
the court is also of the opinion that the actions of DER alone,
in the particular circumstances of this case, also would have
effected a taking.
Cape Atlantic Estates
12. In 1967 and 1968, Atlantic acquired, at a cost
in excess of $7 million, some 12,000 acres in Volusia County
and 2,000 acres in Brevard County which it planned to sell as
two and one-half and one and one-quarter acre lots as Cape
Atlantic Estates. (Pretrial Stipulation III.3; Trella at 15,
73; Lipman at 27; Intervenors' Exhibit 118 at 1). The lands
were divided into sections A through K. [Plaintiff's Exhibit
13. Approximately 7,400 acres of the property are
located west of Interstate 95, are generally high, but are
generally wet because they are flat and shallow "hardpan"
underlies the surface soils, precluding rainwater from
percolating below the surface. [Garcia at 15, 18-20; Plaintiff's
Exhibits 11, 12, 27, 28 at page 1-3). The surface wetness is
"ponded surface waters" or a "perched water table" and does
not represent the true groundwater table which is generally
between four and eight feet below the surface. [Garcia at 21-
23; Plaintiff's Exhibit 27 at page 48, 28 at page 11-63. The
lands east of Interstate 95 slope to the Turnbull Hammock, the
"reserved" area on the maps of Cape Atlantic Estates. [Garcia
at 15; Plaintiff's Exhibits 1, 23. Because of their slope,
waters from those lands drain into Turnbull Hammock. [Garcia
at 23)'. Generally, those lands are drier than the lands west
of Interstate 95, but the lands immediately adjacent to the
Turnbull Hammock are often wet.
14. In order to sell the lands in Cape Atlantic Estates,
the lands had to be improved with access roads and drainage.
The access roads and drainage were designed in a gridwork
fashion, a common and acceptable design in the late 1960s.
[Trella at 42, 76; McLouth at 783. Once almost all lots in
Cape Atlantic Estates sold, it would have been an "insurmountable
problem" to redesign the project tao change e te grid design which
followed the borders of the lots. [Trella at 42].
15. In order to improve the lands, the Florida
Legislature, by special act in 1967 (Chapter 67-1022), created
the SCDD "Ef]or the purpose of draining and conserving the lands
[at Cape Atlantic Estates], and protecting [those lands from
the effects of water, for controlling the water [in Cape Atlantic
Estates] and for the public health, convenience, welfare,
utility, and benefit, and for the purpose of making the lands
[within Cape Atlantic Estates] available for agricultural,
settlement, orban and subdivision -rposes by drainage,
reclamation, and improvement. ." The SCDD also had the power
to levy taxes. [Pretrial Stipulation IZI.7; Plaintiff's Exhibits
6 and 91]. The special act provided that the general drainage
district statute (Chapter 298, Florida Statutes), providing
for circuit court supervision and control, would otherwise apply
to SCDD. [Plaintiff's Exhibit 63.
16. On May 2, 1967, a petition to form the SCDD was
filed in Circuit Court for Volusia County. [Plaintiff's Exhibit
14 at pages 1-2]. On September 13, 1967, the court entered
a judgment creating and incorporating the South County Drainage
District. [Plaintiff's Exhibit 14 at pages 24-263. Thereafter
the SCDD boundaries were occasionally extended. [Plaintiff's
Improvement Plans and Lmorovements
17. 'The South County Drainage District (SCDD), using
funds advanced by Atlantic, was to install the improvements
in accordance with improvement plans. [Pretrial Stipulation
III.6, II.9). In November 1967, John S. Bristol and Associates,
Inc., prepared a plan for reclamation for the SCDD and Cape
Atlantic Estates, which was then 10,184 acres. The plan included
canals, roads and swales in a gridwork design, which at least
through the 1960's was a very common design. [Trella at 42,
76; McLouth at 783. Surface water would be drained into Turnbull
Hammock. [Garcia at 233. The estimated costs for the
improvements were $82 per acre. [Plaintiff's Exhibit 11; Trella
18. On June 20, 1968, Atlantic and the SCDD agreed
that Atlantic would finance the improvements for the SCDD.
Atlantic would receive interest-bearing SCDD bonds in the amount
of its advances. [Pretrial Stipulation -.9; Trella at 25;
Plaintiff's Exhibit 103. SCDD was to retire the bonds from
the collection of assessments against Cape Atlantic Estates
lands over ten years beginning in 1980. [Pretrial Stipulation
1.9; Lipman at 8-93.
19. In December 1968, John S. Bristol and Associates,
Inc., supplemented the plan of reclamation to include
approximately 1700 acres in section K-I at an estimated increased
cost of between $153,000 and $337,000 bringing the overall
estimated costs to between $980,000 and $1.163 million. [Exhibit
20. In May 1969, J. J. Garcia and Associates, Inc.,
supplemented the plan of reclamation to include all of Cape
Atlanjtic Estates by including selling areas K-2, K-3 and K-4.
Total costs were then estimated to be $1.7 million, or
approximately $110 per acre. [Lipman at 8; Plaintiff's Exhibit
21. In June 1971, J. J. Garcia and Associates, Inc.,
published a revised plan of reclamation for the South County
Drainage District to preserve certain ecological elements to
the extent possible. [Plaintiff's Exhibit 12].
22. Work on the improvements ccrmenced in 1967
and, by 1970, Atlantic had expended in excess of $560,000 in
connection with the improvements, incLhi tlhe completed main
outfall canal (variously described as be-ing 12, 13 or 14 miles
long) just west of and parallel to Interstate 95 and was
proceeding with detailed plans for other improvements. [Pretrial
Stipulation 111.15, III.16; Trella at 1_, 27, 31; Lipman at
10; Garcia at 24; Intervenors' Exhibit 118 at 1i. The
improvements were, at that time, on tie :an d within budget.
[Garcia at 24; Trella at 28-29].
23. As district engineer, Mr. Garcia, between January
1971 and September 1974, kept the Trustees of the Internal
Improvement Fund, the Central and Scatfer- Florida Flood Control
District, the Game and Fresh Water Fish Co~z--ission, the
Department of Natural Resources, DPC, anr Volusia County, as
well as other state agencies and instrumentalities, informed
concerning the drainage plan and improvements. [Garcia at 25-
26, 34-353. DBR and the Division also were kept informed.
[Plaintiff's Exhibits 97, 101, 102, 106, 107, 109, 112, 114-
24. With the exception of DPC, none of these agencies
asserted jurisdiction or had any proble-s with the improvements.
The Central and Southern Florida Flood Control District, for
example, indicated that it had no problems with the improvements,
but asked Mr. Garcia to "continue to keep us advised as your
work progresses." [Plaintiff's Exhibit 16-3). The Department
of Natural Resources, as another exa-.le, indicated that, while
it "would prefer to see subdivisions of -eandering streets which
protect water detention areas, we realize that much of the work
in this area has been completed." Thus, D'R recommended only
that "that every reasonable effort be made to preserve natural
patterns and wetlands." [Plaintiff's Exhibit 18-d].
25. The State has argued that the land at Cape Atlantic
Estates would not be usable even with the installation of the
drainage plan. It should be obvious, and is specifically set
forth in the public offering statements, that additional
improvements would be needed to make the land ready to build
on or to use for certain other purposes. That fact does not
make the land useless.
26. Implementing the improvement plans would have
provided access and drainage to the lots. Cape Atlantic
Estates, particularly west of Interstate 95, contains ponded
surface water which remains on the ground after rainfall for
relatively long periods of time. The drainage plan was
designed to remove that water by a two-fold action, first
breaking the hard pan which prevents the rainwaters from
percolating down into the groundwater table, and secondly by
allowing the water to flow off through the drainage ditches
into the main canal and thence on through to the discharge point
at Turnbull Hammock. [Plaintiff's Exhibits 11, 12, 27]. As
the Brevard Engineering report clearly indicated, the ponded
surface water was some four to seven feet above the true
groundwater table on the west side of 1-95. [Plaintiff's Exhibit
27 at 47-48]. Mr. Garcia designed the plan for improvements
at Cape Atlantic Estates, supervised construction of the main
canal, and is very, very familiar with the property over the
years. Mr. Garcia's testimony, which termed the ponded surface
water tas the "perched water table" as compared to the "true
water table," is clear and unambiguous. [Garcia at 19, 20,
21, 22, 23]. He had no doubt that the improvements would be
effective, and the court so finds that they would be effective.
That portion of the property which was subject to flooding
did flood mostly because it was flat and because the
hardpan prevented percolation. Thus, the canal system would
give the water a place to go, and would also break up the shallow
hard pan to allow the water to percolate deeper to the true
27. The only contradiction to this evidence is Mr.
Nevin Smith's testimony for the State. Much of Mr. Smith's
testimony about usability had to do with waste disposal
considerations [Smith at 88] and his concerns about that depended
on his interpretation of the effect on the water table. [Smith
at 893. Mr. Smith's testimony, however, is substantially based
on a misinterpretation of certain language in the Harris report -
(1) that there will be only a minimal lowering of the ground
water table, and (2) that there will be no effect on the existing
"ground water regime." [Smith at 373. The Harris report
specifically does state that surface water will be removed.
Mr. Smith's interpretation that the surface will remain wet
because the ground water table will not be significantly affected
is a strained interpretation of the Harris report. As the State
admits in its brief, the Harris report relied on the Brevard
Engineering report (which Mr. Smith had not closely examined)
for its information on ground water, and the Brevard Engineering
report specifically states on pages.47-4S that the ground water
is some 4-8 feet below the surface of the pounded surface water.
Finally, Mr. Smith had not been shown the testimony of the man
who made Harris report along with Mr. Garcia concerning his
definition of ground water regime, although Mr. Smith admitted
that ,"you can certainly take that to mean a series of water
tables." [Smith at 83, 86, 87]. "If he says that he only meant
the lower tables, as a competent engineer myself, I would have
to say that this report is not -- certainly not clear, and it
could be misleading."
Moreover, Mr. Smith agreed that in some areas that
rainfall would dissipate into the soil, but that in other areas
there was hard pan which would prevent percolation. In response
to hypothetical type questions, Mr. Smith agreed that there
could be several water tables. [Smith at 77-783.
Registration and Sales
28. The lands comprising Cape Atlantic Estates (and
.SCDD) were registered, by section, with the then Florida Lands
,Sales Board.(the Division's predecessor) in 1967, 1968 and 1969
for sale under Chapter 478 (now renumbered Chapter 498), Florida
Statutes. [Pretrial Stipulation III.4; Plaintiff's Exhibit
7; Trella at 15-16; Lipman at 26].
29. Upon :approval of the registration statements, it
is stipulated that it was a requirement of the Department of
Business Regulation that the lands offered for sale be drained
of surface water and that graded dirt roads be provided before
December 31, 1973, in accordance with the registration
statements, the public offering statements, and the approved
form of contract to be used. [Pretrial Stipulation III.8]..
30. The public offering statements and agreements for
deed disclosed that lots in Cape Atlantic Estate needed drainage
and were not physically accessible, but that the SCDD would
improve them with graded dirt roads and drainage by December
31, 1973. [Plaintiff's Exhibit 8; Trella at 23]. The offering
statements acknowledged that, until the improvements were
installed, the lands would not be useable. [Plaintiff's Exhibit
83. As reflected in the offering statements and agreements
for deed, Atlantic was to advance the costs of the improvements
against the property for ten years beginning in 1980. [Pretrial
Stipulation III.5; Trella at 23; Plaintiff's Exhibits 8, 9,
103. Costs for installing the drainage and roads were estimated
in the late 1960s as $110 per acre. [Trella at 25; Plaintiff's
31. Between 1967 (after the initial registration became
effective) and mid-1972, the lands in Cape Atlantic Estates
were sold to purchasers in one and one-quarter acre and two
and one-half acre parcels under agreements for deed. [Trella
at 16, 18; Lipman at 26; Plaintiff's Exhibit 8]. Atlantic,
which originally sold the two and one-half acres lots, eventually
converted its sales to one and one-cuarter acre lots. Prices
for the lots also increased from 1967 to mid-1972, from $1,990
for a two and one-half acre lot in 1967 to $5,990 for a one
and one-quarter acre lot in 1972. [Lipman, Volume II at 483.
By mid-1972, Atlantic had sold, in two and one-half and one
.an one-quarter acre parcels to approximately 5,000 purchasers,
over 95 percent of the lots in Cape Atlantic Estates. [Pretrial
Stipulation III.12, III.13; Trella ae 41-42; Lipnan at 20].
32. In mid-1972, Atlantic ceased sales (temporarily,
it thought and intended) because "it got a little cloudy in
terms of what we could say in the offering statement" in light
of, inter alia, the Florida Legislature abolishing the SCDD,
Volusia County's reluctance and refusal to assume the SCDD's
obligations, and the DPC asserting permit jurisdiction over
the improvements at Cape Atlantic Estates. [Trella at 26-27;
Lipman, Volume I, at 29-32].
33. After sales were suspended in mid-1972, DBR wrote
Atlantic that, "it is important that you do not re-open sales
without prior notice and approval of this Division." [Lipman,
Volume I, at 21; Lipman, Volume II at 4, 6-7; Plaintiff's
Exhibits 96, 99). As long as there was uncertainty concerning
whether the improvements could be installed, the Division would
not have approved the resale of lots in Cape Atlantic Estates
which the Division described as "useless" without the
improvements. [See Trella at 26, 49, 60; Plaintiff's Exhibits
96-99].. It was also made clear that the Division did not agree
to any extension of time for completion of the improvements.
[Plaintiff's Exhibit 96, 993.
34. Of some 6,000 lots in Cape Atlantic Estates, 3,000
lots have been deeded to purchasers; between 850 and 900 lots
are still subject to agreements for deed; and Atlantic owns
2,079 lots. [Lipman, Volume I at 223. Atlartic's lots include
those which it never sold, but are primarily composed of lots
which were returned to inventory when purchasers would cancel
their agreements for deed or Atlantic would cancel those
agreements for prolonged nonpayment. Because of the problems
in installing improvements, there was an extraordinarily high
percentage of cancellations. [Trella at 60-61, P.2; Lipman,
Volume I, at 20-22; Plaintiff's Exhibit 33.
35. Only 153 lots in all (117 which the intervenors
either own or are purchasing through an agreement for deed and
36 which Atlantic controls) have physical access. [Lipman, Volume
I, at 253.
36. Between 1970 and 1977, a series of unforeseeable
events arose which precluded the improvements from being made
and, given the fact that most lands had been sold in two and
one-half and one and one-quarter acre parcels, foreclosed any
reasonable use of Atlantic's unsold and returned lots which
are ch'eckerboarded throughout the subdivision.
37. First, the Florida Legislature passed a home rule
charter for Volusia County in 1970, which was adopted by
referendum on June 30, 1970, to be effective January 1, 1971.
[Pretrial Stipulation III.17; Trella at 31; Plaintiff's Exhibit
24]. Section 1409 of the charter provided that "[t]he functions,
responsibilities, duties, and obligations of the South County
Drainage District as provided in Chapter 67-1022, Laws of
Florida, are hereby transferred and vested in the Charter
government and said District shall cease to exist on the
effective date of the Charter and said act is hereby repealed."
IPlaintiff's Exhibit 24).
38. Neither Atlantic nor the SCDD was notified or
consulted about the proposed abolition of SCDD and, in fact,
they learned of the abolition only ia September 1971. [Lipman
at 45; Dakan depo.). Volusia County also was "surprised" that
the SCDD was actively operating [Bakan depo. at 30-31; Exhibit
2 to Dakan depo. at pages 3-32]. As late as July 1971, the
Circuit Court for Volusia County noticed an annual meeting of
the owners of land within SCDD for Sep--ember 8, 1971.
[Plaintiff's Exhibit 14 at 12].
39. Abolishing the SCDD apparently was inadvertent
because the charter was intended only to abolish non-active
"paper" organizations and because Volusia County was not
interested in assuming real obligations of drainage districts.
[Trella at 27-28, 31-33; Dakan depo. at 13; Plaintiff's Exhibit
40. The legal effect of the home rule charter was to
abolish the SCDD within Volusia County and to cause the county
to assume the obligations of the SCDD. The practical effect
of the abolition of SCDD, combined with DPC's conduct, however,
was to delay the improvements well over two years. Volusia
County did not wish to take up the project where the SCDD left
off, saw no urgency to complete the project on time, and wished
to avoid spending general funds (even though it clearly
recognized that the County Charter could impose a general
obligation upon the County). [Dakan. depo. at 13, 16, 17, 19,
22; Plaintiff's Exhibit 913.
41. Because of Volusia County's unwillingness to
complete the improvements and because of Atlantic's desire to
have the improvements installed, Atlantic attempted to convince
the circuit court that the SCDD remained viable. On June 4,
1982, however, the Circuit Court for Volusia County found that
*section 1409, chapter 70-966, had abolished the South County
Drainage District and transferred its powers and functions to
Volusia County Charter government. [Exhibit 14 at 58-60).
The First District Court of Appeal -affirmed the circuit court's
ruling, and the Supreme Court of Florida denied a petition for
writ of certiorari. [Exhibit 143.
42. On September 20, 1973, the Volusia County Council
passed ordinance No. 73-13, which, inter alia, established a
special Volusia County improvement district, to be known as
the SCDD, as the governing body of the South County Drainage
District with powers and duties to implement the drainage system.
43. Thereafter, continued negotiations finally resulted
in December 1973, in an agreement between Volusia County on
behalf of itself, Volusia County on behalf of the SCDD, and
Atlantic, which "basically place[d3 the entire matter
in status just prior to adoption of the Charter ." Atlantic
agreed to advance, without accruing any interest, monies to.
the SCDD for the improvements in exchange for bonds which would
be retired over ten years beginning in 1980. [Lipman at 29;
Plaintiff's Exhibit 26). It was noted in no fewer than three
places in the agreement that the bonds, "will not be general
obligation bonds to the county, but will be secured only by
the obligation of the owners of land within the special
improvement district to pay assessments relating to the
implementation of the drainage plan ." [Plaintiff's Exhibit
26]. Volusia County specifically acknowledged in the agreement
that its best efforts would be necesseay to secure all necessary
governmental and private approvals for the improvements and
Volusia County agreed to use its best efforts to facilitate
the installation of the improvements at Cape Atlantic Estates.
Notwithstanding that agreement, Volu-sia Ccn--ty actively opposed
the application for a DER permit for the improvements.
[Pretrial Stipulation III.17, III.18; Lipman at 29; Plaintiff's
Exhibits 26, 30, 38 at page 10-11, 91 at pages 9-10, 93].
44. The Department of Pollution Cc-trol (DPC), DER's
predecessor, imposed significant and unwarranted delays on
Atlantic's obtaining a State permit pursuant to Florida Statutes
408.087 and 403.088 which had not been required when the
,improvements were begun. The Florida Legislature passed sections
403.87 and 403.088, in 1971, as Chapter 71-203, to become
effective January 1, 1972.
45. As of 1971, DPC had not adopted dredge and fill
regulations [Pretrial Stipulation III.203 and had not imposed
any requirements upon Atlantic or the SCDD [Trella at 30-39),
but (with almost all lots sold, improvement plans completed,
and in excess of $560,000 spent on completing the main canal
and engineering the remaining improvements at Cape Atlantic
Estates) indicated in late October 1971 that it had jurisdiction
and permitting authority over the improvements at Cape Atlantic
Estates. [Pretrial Stipulation III.21; Trella at 39; Plaintiff's
46. Soon thereafter, Atlantic contacted, by meeting
or letter, DPC, the Department of Natural Resources, the Trustees
of the Internal Improvement Fund, the Department of
Transportation, the Department of State Planning, the Central
and Southern Florida Flood Central District, and the Florida
-Game and Freshwater Fish Commission. [Trella at 40-41; Garcia
at 25-26, 34-35; Plaintiff's Exhibits 15-233.
47. But, while litigation with Volusia County continued
concerning the SCDD, DPC refused to process a permit application
taking the position that review and processing of the permit
application for the improvements was then inappropriate. [Trella
at 43; Garcia at 36-37; Pretrial Stipulation III.22]. Mr.
Garcia's testimony is unrebutted that DPC even refused to discuss
technical or other requirements and to hold "workshop" sessions
rwith Atlantic to discuss the improvements and permitting.
[Trella at 43, 83, 85]. DPC refused even though the State
Attorney General :*ho handled -DPC's intervention in the SCDD
litigation noted on June 9, 1972 (one and one-half years prior
to the litigation being completed), that DPC will "require a
permit for excavation whether the district continues to exist
as a legal entity or whether it is incorporated within the
Charter government of Volusia County. In this regard, the
Department's technical personnel should be able to give you
some valuable advice about the district's proposed drainage."
[Plaintiff's Exhibit 953. Mr. Garcia testified without
contradiction that he made requests for assistance almost weekly
and was always turned down. [Garcia at 37-383. Trying to
anticipate concerns which might be expressed, Atlantic
commissioned an expensive and detailed environmental study
[Plaintiff's Exhibit 27) by an independent environmental
engineer, and filed it with DPC and other agencies [McLouth
at 56 et seq.; Garcia at 29, 36-37; Plaintiff's Exhibits 110,
1113. Still, DPC would give no guidance until the SCDD problem
48. With the SCDD litigation complete, DPC's Tallahassee
personnel with whom contact had been made, referred Atlantic
to its Central Region in Orlando, where Atlantic had to "start
fresh." [Garcia at 38]. Permitting proposals were discussed
with DPC, and modifications to the i-provement plans were made.
[Garcia at 39, 41). DPC officials told Atlantic to "go ahead
and file" the application. [Garcia at 413. Atlantic and Volusia
County jointly filed a permit application for the improvements
in September 1974, the application specifically noting that
it would "control flooding and permit the construction
of rough graded dirt roads to the individual tracts which were
sold in the late 1960's and early 1970's." [Trella at 42, 45;
Plaintiff's Exhibits 26, 29 at page 7].
49. The permit application was denied, by form letter,
in November 1974. [Pretrial Stipulatio- III.25; Trella at 45,
49; Plaintiff's Exhibit 313. Between the submission of the
application and its denial., Atlantic received no notice of any
deficiencies, procedural or substantive, fr=- the DPC,
notwithstanding DPC,rules then in effect. [Trella at 46, Garcia
50. The denial of the permit was not on statutory
grounds, but was done for individual reasons of the four state
employees charged with the decision. [Plaintiff's Exhibit 36).
Four DER employees participated in the decision to deny the
permit. [Pretrial Stipulation 26). Gene Medley, a biologist
just out of school and the person assigned to the project,
opposed the project because it drained wetlands, and in his
opinion, wetlands ought to stay as they are. (DER had finally
had told Atlantic it must apply for a permit to operate a
potential pollution source the canal discharge point not
a permit to drain wetlands). Mr. Medley also said there was
no way he would vote for a permit for a grid design of canals
even though he knew that the ownership dictated the grid design.
James Hulbert admitted that because Volusia County opposed the
project and Brevard County opposed the project, he would in
no circumstances grant the permit. It was his policy to deny
the permit in such circumstances so the applicant would be
required to go before a hearing officer and there would be a
public hearing. He admitted that Brevard County's opposition
.was unsupported by data. Volusia Coun-y 's opposition was
contrary to its agreement with the SCDD and Atlantic and contrary
to the fact that Volusia County was one of the applicants.
Mr. Hulbert also said he was concerned about future maintenance,
'and although it was clear from the application Volusia County
had agreed to do the maintenance, he said he rejected that
because he was not sure Volusia County realized what it was
getting into. Thomas Hunnicutt, the new district engineer,
woted to deny the project in part because he was under the
misimpression that a state hydrologist disagreed with the
hydrologist's conclusions submitted with the application (the
,Harris report, Plaintiff's Exhibit 28). In fact, no state
hydrologist had reviewed the project and the DNR hydrologist
who subsequently reviewed it agreed with it. He was also
concerned with maintenance. Although he admitted there were
things that Atlantic could have done to get a permit, he did
not communicate those things to Atlantic, even though the
department rules at that time contemplated a pre-filing review
of an application to assure there were no deficiencies and notice
of any problems to give the applicant a opportunity to resolve
them. Alex Senkevich, the District Marager, had been of the
impression, as Mr. Garcia testified, that the matter had been
worked out prior to the filing of the application. He, too,
admitted that the opposition from Volusia County influenced
the decision, and he voted to deny the project because the other
three members of his staff opposed it.
51. Atlantic promptly commenced an administrative
proceeding to challenge the denial of the permit, which
ultimately resulted in the hearing officer recommending that
the permit be granted.2/ [Pretrial Stipulation III.28;
Plaintiff's Exhibit 38]./ Notwithstanding the hearing officer's
order, DER issued a final order denying the permit on May 4,
1976. [Pretrial Stipulation III.29; Plaintiff's Exhibit 39).
Although Atlantic argues that the final -orer ignored substantial
competent evidence on which the hearing officer based his
findings, the court declines to review the order in those terms,
although it does appear that the order required Atlantic to
anticipate all further use that might be made of the property
after Atlantic sold it.
52. Atlantic filed simultaneous appeals of the DER
final order to the First District Court of Appeal and the
Environmental Regulation Commission. [Pretrial Stipulation
III.30]. DER, however, moved to dismiss both the administrative
appeal to the Environmental Regulation Cc-r-ssion and the appeal
to the district court on the clearly inconsistent grounds that
the other had exclusive jurisdiction. [Pretrial Stipulation
53. On June 27, 1977, after oral argument in the
district court, but prior to decision, DER and Atlantic entered
into a stipulation which constituted a permit. [Pretrial
Stipulation III.30; Trella at 54j.
St. John's Assertion of Jurisdiction
54. In August 1977, approximately one month after
obtaining approval from DER, Atlantic received notice from St.
2/ The hearing officer, originally assigned to the case by
DPC, resigned, significantly delaying the hearing. [Trella
3/ The administrative hearing was held under the old
administrative procedures act, and evidence was limited by rule
to the situation at the time of denial of the permit.
John's that it also was considering asserting permitting
jurisdiction over Cape Atlantic Estates. [Pretrial Stipulation
III.31; Trella at 54]. St. John's asserted jurisdiction despite
-the fact that St. John's permitting authori-y did not
geographically include Volusia County.
Effects of Governmental Actions
55. Faced with the additional requirements, Atlantic
re-evaluated the cost of installing the modified improvements
in view of the delays, uncertainties, and new requirements
[Trella at 55], determined that they could not be installed,
and notified DBR and Atlantic's purchasers. [Trella at 56-57,
59-60; Pretrial Stipulation III.333].
56. The combination of the delays and the increased
complexity of the improvements had a number of effects on
Atlantic and resulted in rendering it economically impossible
to install the improvements necessary to make the lots usable
for any practical purpose.
A. Increased Costs of Improvements
57. Inflation. The effects of inflation are illustrated .
by Exhibit 45 and Mr. McLouth's testimony both of which are
uncontradicted. For example, the cost of doing a project in
mid 1977 was 240% of the cost of the same work in 1967 when
this project began. Mr. McLouth estimated and the court finds
that the project constructed according to the DER permit actually
issued would cost approximately $17 million at September 1,
4/ By stipulation of December 11, 1982, in the subject cases,
DBR acknowledged that the improvements will never be installed
and that it had moved for interpleader to distribute the monies
in the improvement trust account. If the improvements could
be installed, DBR, given its past actions, would not favor the
distribution of the improvement trust account which was designed
to ensure that the improvements were made.
1977, plus inflation during construction. That same work would
have cost $7 million in 1969-70. Atlantic could have constructed
the improvements at a $7 million cost if that requirement had
been imposed in 1969-70 and still trade a profit of almost $10
million. [Lipman Volume I at 35-423.
58. Complexity of the improvements. Mr. Garcia
testified without contradiction that the major portion of the
increased cost of the improvements (not counting inflation)
was not the result of modifying the. drainage system itself,
but in the method of doing the work and in such extras as
requiring stabilized roads throughout the subdivision. [Garcia
49-563. Taking Mr. McLouth's $17 million estimate at 1977
prices, Mr. Garcia eliminated those extras such as stabilized
roads and the extra handling of materials and testified that
the cost of doing the work as originally contemplated would
have been $5.5 to $6 million at the 1977 prices. [Garcia 513.
Working backwards to eliminate inflation, that figure
approximated the estimates Mr. Garcia had under the late 60's
and through the $2.7 million estimate in the January 1973
improvement trust agreement. [Plaintiff's exhibit 25; Garcia
at 53). As Mr. Lipman testified without contradiction, if
Atlantic or the SCDD had been allkced to proceed without delay
to construct the original plan, it would have been a profit
of $12 million.
B. Decreased Income
59. Cessation of Sales and Cancellations. A significant
effect of the delay and the uncertainty created thereby was
the cessation of sales. As a registered subdivision under the
Land Sales-Law, Atlantic was required to make accurate
disclosures in order to make sales. 3y mid 1972 it ceased sales
because of the uncertain situation. [Trella at 26-27; Lipman,
Volume I at 293. Atlantic thought -t the ti-. that the situation
rejects the argument that as a practical matter that a request
to permit sales would be a viable alternative to Atlantic.
61. Improvement trust monies =-.available. An additional
$1.7 million (plus several hundred thousand dollars of interest)
was lost to Atlantic through the improrve.ent trust account which
would have been used to reimburse improvement expenditures or
advances. [Lipman Volume I at 28-31]. Although the disposition
of the improvement trust is no longer a part of this case, the
fact that those monies would have been available to Atlantic
is relevant to the financial realities and economic effect of
the delays and other state actions.
C. Increased Expenses
62. On the expense side, general and administrative
expenses, which Mr. Lipman testified wo-ld have averaged 10%
of sales value, instead amounted to some 28% of sales value
at Cape Atlantic Estates. The higher percentage of general
and administrative expenses is caused by both the decrease of
income (which would increase the percentage of the absolute
amount), the increased costs of executive time in dealing with
problems and the additional personnel required to handle customer
inquiries and customer relations. Additionally, of course,
increased legal fees were experienced in handling the Volusia
County litigation, the permitting appeals, and other matters
attendant on the delay, and additional engineering fees in
connection with the Volusia County agree-aent, the Brevard
Engineering report, the Harris report, the revisions, and other
items were all likewise involved. [Liprman Volume I at 44-463.
D. Combined Result of Increased Expense/Decreased Income
63. The net result on Atlantic's financial picture
is that if the delays had not occurred, even if DER had increased
the cost of the improvements by imposinr the requirements which
were set forth in the permit, could have handled the installation
of the improvements, made its property accessible, and would
have sold or retained accessible, sellable and useable property.
On the other hand, if it had been only the delay and there had
been no increase in the complexity in improvements, probably
the same is true. The combination, however, of tripling the
cost of the improvements and delaying while inflation more than
doubled the cost again at a time when the income from the project
was fixed, cancellations multiplied, and sales could not
continue, has virtually rendered Atlantic bankrupt, even without
the improvements (refer to details under "investment-backed
E. Inability To Borrow And Secure Improvements After Date Of Taking
64. As both Mr. Lipman and Mr. Trella testified,
Atlantic could not have borrowed the money in 1977 to install
the improvements. In the first place, Atlantic did not have
assets exceeding the $17 million cost of improvement, and would
be unable to give any collateral except that dependent upon
the collection of assessments against the land beginning in
1980 by Volusia County's newly formed South County Drainage
District. Because those assessments were not yet in existence,
and there had been no experience with them, the reliability
of that sort of method of repayment could not be reasonably
evaluated by a potential lender. The accounts receivable at
that time were in the neighborhood of $7 million [Plaintiff's
Exhibit 53], and they were at that time pledged to cover
Atlantic's other borrowings used to finance such things as the
initial land purchase and selling expenses. Selling expenses
in the land sales business, Mr. Lipman and Mr. Trella testified,
are high, and, of course, must be paid at the time they are
incurred. Thus Atlantic was required to borrow money "up front"
in order to cover those initial expenses, and was in the process
of paying those back out of the receivables. CLipman Volume.
I at 17-19; Trella at 103].
65. The receivables would ordinarily "have been much
higher, but the increased cancellations and suspended sales,
both resulting from state action, -caused less than anticipated
receivables. The combination of the decreased cash flow, the
increased costs, the delays, including the uncertainty with
St.. John's, and the uncertain future sales, made it apparent,
as both Mr. Lipman and Mr. Trella testified without
contradiction, that no commercial lender would lend money in
the necessary amounts to finance the imprrovements.
66. Under the circumstances, then, the improvements
cannot be completed. Atlantic is left -wit h 2,079 scattered,
landlocked lots which are inaccessible and unsellable. Atlantic
cannot use the lots because there is no practical access, it
cannot sell the lots because the land sales law cannot be
complied with and a purchaser would likewise have no access,
and, as stated in the registered offering statement, most of
the land is not usable without drainage. The lots are unusable
for any reasonable purpose as a result of the actions of the
State in these particular circumstances and there has been a
taking of the individual lots in the subdivision.
Applying Estuary Properties
67. As noted in conclusion of law 9, at least six
factors should be considered in determining whether there has
been a taking. Graham v. Estuary Prooerties, Inc., 399 So.2d
1374 (Fla. 1981).
Diminution in Value
68. Had the roads and the drainage been put in,
Atlantic's remaining lots of one arn one quarter acres could
have been sold at a realistic "but probably conservative" average
value of at least $6,990 as of September 1, 1977. [Knight at
11-12; Trella at 61, 93-94[.3. Mr. Knight's testimony of an
average value of $6,990 was based on a number of factors, but
one of the primary considerations in determining the market
value was the fact that 5,000 purchases of lots in Cape Atlantic
Estates had been made between 1967 and r.id-1972, with one and
one-quarter acre lots selling at $5,990 when Atlantic suspended
sales in mid-1972. [Knight at 11-22, 28-29; Lipman at 483.
Moreover, his testimony of an average value of $6,990 is
unrebutted on the record. Indeed, the state's appraiser was
not asked a valuation of the lots if improved, and did not answer
when asked if he agreed with Mr. Knight's evaluation of the
.,000 actual sales as a primary factor in determining the fair
market value for the Cape Atlantic lots. [Anderson at 76-77).
69. The State argues that, because only minimal
improvements were offered at Cape Atlantic Estates, the lots
have no value in any event. The State ignores the fa9t that
it was fully disclosed that this property was sold with only
minimal development-graded dirt roads and surface water drainage.
Having only minimal improvements doesn't mean that the lots
would have no value; it merely means that if additional
improvements had been put in, the land would be worth more than
it would be with the minimal initial improvements.
70. Without the roads and drainage, and as a result
of the State's delay and inconsistent actions, the average value
of Atlantic's and the Simon class's properties, checkerboarded
across Cape Atlantic Estates, would be only "nominal" ($100
to $200 per lot) since, as the offering statement disclosed,
there is no access, no drainage, and the lots could not be
readily located on the ground. [Knight at 10, 15-17, 183. Even
DBR's attorney has admitted that, without the improvements,
the land at Cape Atlantic Estates "is absolutely valueless."
[Transcript of Hearing of March 11, 1975, eat 7, 123, and it
was on that basis that the State (through DBR) instituted
proceedings in 1974 to revoke Atlantic's registration.
71. There has been no physical invasion by the state
of Cape Atlantic Estates. However, the practical effect of
governmental action has been to eliminate physical access to
the individual lots, a factor many courts virtually equate with
Public Harm/Public Benefit
72. The delays and conflicting de-7nds of the State
have not prevented a public harm. In fact, DER, at last, agreed
to grant a permit to Atlantic, thereby evidencing that the
improvements could be made consistently with the public health,
safety, welfare and morals.
73. On the other hand, the delays and the resulting
inability to install the improvements have presumably created
a public benefit. The Cape Atlantic lands surround Turnbull .
Hammock which St. John's, using public monies, acquired for
preservation presumably to benefit the public. One of the
justifications given for the purchase of Turnbull Hammock was
to prevent or control development of Cape Atlantic Estates.
Cape Atlantic Estates also borders the Farmton Wildlife
Management Area which the state controls,- borders and is
5/ The Game and Fresh Water Fish Commission has established
Farmton as a Type I Wildlife Management Area. Section 372.121,
Florida Statutes, authorizes the Ga-e and Fresh Water Fish
Commission to make reasonable rules to protect, control, operate,
manage, and develop lands which the co.-mission owns, leases,
or otherwise controls with permission of the owner. As a Type
I Wildlife Management Area, Farmton is subject to the Game and
Fresh Water Fish Commission opening it to hunting, trapping,
or fishing, as the commission deems appropriate. Fla. Adm.
-~~~~ -- - -- -.._~~_
included in the Brevard County Game Refuge [Plaintiff's Exhibit
27 at page 463, and is approximately 12 miles from the 28,000
acre Seminole Ranch which St. John's also acquired for
preservation, again purportedly for a public benefit.-- The
difficulties encountered by Atlantic have arisen in large part
from the desire of State agencies or state officials to preserve
Cape Atlantic Estates in its natural state. That was the express
desire of some of the DPC personnel (Medley) charged with the
permit decision; the final order [Exhibit 393 denying the permit
did so to prevent development and the future problems development
would cause; St. John's director Dr. Knapp submitted to St.
-John's the report of the Environmental Task Force calling for
opposition to the project [Plaintiff's 'Exhibit 66; see also
Exhibit 673; Volusia County opposed the project it had agreed
to support because of a desire to preserve the land from being
developed. [Plaintiff's Exhibit 30).
Public Health, Safety, Welfare and Morals.
74. This is not a case where a permit has been
justifiably denied in order to prevent environmental harm and
where the property owner then attempts to claim that the State
has taken the property. As previously noted, this is a case
where as DER recognized at last, the improvements could be made
consistently with the public health, safety, welfare and morals.
Continued from prev. page
Code 39-15.03(3). The commission has, in fact, established
specific regulations governing hunting and fishing in Farmton.
The commission has established check stations around Farmton
in order to monitor the number of deer, turkeys, and hogs being
taken from Farmton. Fla. Admin. Code 15-06(5)(c).
6/ St. John's acquired Seminole Ranch (14,500 acres in fee,
the remainder with the Nature Conservancy) in order to provide
non-structural flood protection, to preserve a vegetated marsh
eco-system, to retain water quality enhancement characteristics,
and for fish, wildlife, and outdoor recreation benefits. [Auth
depo. of September 11, 1981, at 27-29].
As the DER attorney admitted at the hearing of February 3, 1981,
a permit. They can take graders and draglines
out there tomorrow as far as our Department
is concerned and in due time be in the position
of saying that the purchasers of these lots
will, in fact, have what they bargained for,
a piece of property that is suitably drained.
S. t's very important in our view to
distinguish this case from those in which --
for a variety of valid purposes the Department
may have found the basis for denying the permit
of this nature. That is -- that is essentially
your position, Your Honor. [Transcript of
Hearing of February 3, 1981, at 55-573.
Therefore, it has not been established that the granting of
the permit would materially and adversely affect the public
health, safety, welfare and morals.
75. Various State agencies and instrumentalities have
acted arbitrarily and capriciously toward Atlantic. There have
been abuses of power and conflicts of interest. For example,
DPC refused to process the permit application for the
improvements for three years, denied the permit for the
individual reasons of certain DER employees (rather than
statutory reasons), and, when the hearing officer recommended
that the permit be granted, DER overruled the hearing officer's
order, clearly ignoring substantial competent evidence which
supported it. See findings of Fact 49, above.
76. Volusia County's actions also produced an unfair
result on Atlantic and the purchasers. As early as May 1970,
Volusia County indicated that "no action will be required at
this time" concerning the improvements. [Plaintiff's Exhibit
153. After-the Volusia County Charter transferred the SCDD's
obligation to Volusia County, Volusia County refused to accept
its statutory obligation to assume those obligations. After
Volusia County ultimately agreed in December 1973 to facilitate
the improvements and to use its best efforts to obtain necessary
permits, Volusia County opposed the permits and, as shown above,
its opposition was a significant factor in the permit being
77. St. John's also dealt unfairly with Atlantic.
One of the leaders of the Volusia County Environmental Task
Force, which opposed the permitting at Cape Atlantic Estates,
was a member of the Board of Governors of St. John's. [Auth
depo. of April 7, 1981, at 29; Exhibit 11 to Auth depo. of April
7, 1981]. In 1975, he demanded that St. John's oppose the
project as it did. A St. John's employee, John Merriam, also
a member of the Task Force, testified in opposition to the
project [Plaintiff's Exhibit 36 at pp. 68 et seq3, even though
St. John's exercised no jurisdiction whatever over the project
at that time. [Auth depo. at page 20). Later, after Atlantic
finally obtained permits from DER for the i-provements to be
completed (over St. John's objections) [Trella at 313, St.
John's, having lost before the DER, mobilized to stop those
improvements from being completed. Frank X. Friedmann, Jr.,
was a member of the Board of the St. John's River Water
Management District in August, 1977. [Auth depo. of April 7,
1981, at 14; Exhibit 9 to Auth depo. of April 7, 1981]. On
August 3, 1977, Mr. Friedmann's law firm, acting for a client,
demanded that St. John's notify Atlantic of the need to apply
to St. John's for a permit for construction in accordance with
Chapter 373, Florida Statutes. Six days later, St. John's
notified Atlantic that the Brevard County portion of improvements
at Cape Atlantic Estates was within the District's permitting
jurisdiction and that appropriate applications for a management
and storage of surplus waters (MSSW) permit must be filed and
processed prior to any additional construction of improvements
at Cape Atlantic Estates. [Auth depo. of April 7, 1981, at
14, 153. St. John's specifically recognized that its regulations
did not permit it to exercise permit jurisdiction over the major
portions of Cape Atlantic Estates which were in Volusia County.
[Auth depo. of April 7, 1981, at 12, 133.7/ Nonetheless, on
:September 14, 1977, St. John's notifie- Atlantic that the entire
Cape Atlantic Estates area would be technically reviewed and
subject to permitting [Exhibit 9 to Auth depo. of April 7,
1981), even though the rule implementing that ad hoc decision
was not adopted until later (after October 19, 1977). [Auth
depo. of April 7, 1981, at 24; Exhibit 13 to Auth depo. of April
7, 1981; Auth depo. of September 11, 1991, at 7, 83.
78. St. John's also expended fu-ds to acquire the
portion of Turnbull Hammock lying between the east and west
portions of Cape Atlantic Estates as "a managementt tool not
otherwise available" to control development of Cape Atlantic
Estates [Auth depo. of April 7, 1981, at 41, 42, 45, 46, 53,
54, 56; Exhibits 19, 24, 25 to Auth ez-?. of April 7, 1981;
Auth depo. of September 11, 1981, at 15, 17-18, 21-23, 26-273,
and in order "to assume a more authoritative posture in reviewing
the permit applications involved with the drainage plan" for
Cape Atlantic Estates. [Exhibit 84). Mr. Auth noted that
acquiring Turnbull Hammock would "be especially effective as
a regulatory tool to prevent adverse water quality and water
quantity impacts from Cape Atlantic Estates." [Plaintiff's
Exhibit 85, 883.
7/ Exhibit 3 to Auth deposition (July 27, 1977 memo: "One
difficulty with issuance of a permit would be that so much of
Cape Atlantic Estates falls outside our permittable area");
Exhibit 6 to Auth deposition (August 9, 1977 memo; "An additional
section is needed in the dealing with projects which straddle
a district boundary . A case in point is the Cape
Atlantic Estates project ."); Copposite Exhibit 7 to Auth
deposition page 9 (August 9, 1977 letter to Atlantic: "In
processing your permit the District will consider the .
entire project in both Brevard and Voiusia Counties); Exhibit
9 to Auth deposition (September 14, 1977 -.e.o: "The entire
project would be treated in the review.")
79. St. John's actions were particularly arbitrary
because, as noted above, its predecessor, the Central and
Southern Florida Tlood Control District, ihad in September 1971
found no problem with the improvements. [Garcia at 27;
Plaintiff's Exhibit 16-B].
Reasonable Investment-Back Expectations
80. Atlantic acquired the property specifically in
order to sell it at a profit. CLipman, Volume I, at 303. Its
expectations have been frustrated. It planned to sell all of
the lots in Cape Atlantic Estates. It has been left, however,
with approximately 20 percent of the lots, which are landlocked
and checkerboarded throughout Cape Atlantic Estates. [Trella
at 61]. Those lands are in effect unusable without the
improvements which will never be installed because of State
81. Atlantic will lose over $300,000 on Cape Atlantic
Estates. [Lipman, Volume I, at 30,35]. Had the improvements
been installed and Atlantic sold the remaining land, and any
returned lots, it would have made a profit of approximately
$12 million on Cape Atlantic Estates. [Lipman, Volume I, at
82. Purchasers of lands at Cape Atlantic Estates also
had reasonable investment-backed expectations. They purchased
their lands, expecting that those lands would be improved with
access roads and drainage. They had the reasonable expectation
that their lands, once improved, would have substantial value,
and that their lands could be used or sold. Without the
improvements, however, their lands have no more than nominal
value, and cannot be used or sold at more than the nominal value.
Thus, their reasonable investment-backed expectations also have
'been frustrated and thwarted.
Summary of Findings of Fact
83. The evidence shows tibae: *(a) the improvements
cannot be built because of economic realities; the inflation
factor in the increased costs is significant; late 1977 prices
were approximately 240% of 1967 prices; inflation became
particularly significant beginning in 1973. Even at the
increased costs, if it had not been for the continued delays,
Atlantic could have financed the irprovements;
(b) The combination of increased costs and
inflation, after the ownership wa-s ivid-;d a-nd income set at
1967-72 prices, rendered the land unimprovable for all practical
purposes and therefore worth aon1ey e mamv~ial amount;
(c) There has been a deprivation of all reasonable
use of the property as a result of the S-ate action and there
has, therefore, been a taking of the lots in Cape Atlantic
CONCLUSIONS OF LAW
1. Because more than $5,000 is in dispute, this Court
has subject matter jurisdiction.
2. The Florida Constitution always has prohibited the
State from "taking" private property without paying "just" or
"full" compensation to its owner. Presently, section 6(a) of
Article X of the Florida Constitution provides that "En]o private
property shall be taken except for public purpose and with full
compensation therefore paid ." Section 6(a) is self-
executing; it does not require enabling legislation to be
effective. Flatt v. City of Brooksville, 368 So.2d 638 (Fla.
2d DCA 1979), citing Jacksonville Expressway Authority v. Henry
G. DuPree Co., 108 So.2d 289, 294 (Fla. 1958); Division of
Administration v. Grant Motor Co., 345 So.2d 843, 845 (Fla.
2nd DCA 1977). Similarly, the prohibition in the Fifth Amendment
of the United States Constitution against-the United States
"taking" property without "just compensation" applies to the
states through the due process clause of the Fourteenth
Amendment. Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449
U.S. 155, 101 S.Ct. 446, 450 (1980); Chicaco B. & Q. R. Co.
v. Chicago, 166 U.S. 226, 241 (1897).
3. Florida courts have recognized section 6(a) and
its predecessors as "fundamental" and "universal" law basic
to American democracy. In State Road Department v. Tharp, 146
Fla. 745, 1 So.2d 868, 870 (Fla. 1941), -Justice Terrell wrote:
American democracy is a distinct departure
from other democracies in that we place the
emphasis on the individual and protect him
in his personal property rights against the
State and all other assailants. The State
may condemn the property for public use and
pay a just compensation for it, but it will
not be permitted to grab or take it by force
and the doctrine of nonsuability shall not
be so construed .
4. Whether there has been a taking is determined on
a case by case basis, depending upon the facts of the particular
case. Penn Central Transportation Co. v. New York City, 438
U.S. 104, 124, (1978); Pennsylvania Coal Co. v. Mahon, 260
U.S. 393, 413 (1922); Graham v. Estuary Properties, Inc., 399
So.2d 1374 (Fla. 1981); South Dade Farms, Inc. v. B&L Farms
Co., 62 So.2d 350, 357 (Fla. 1952).
5. The constitutional prohibitions are concerned with
the effect of governmental action or inaction. San Diego Gas
& Electric Co. v. City of San Diego, 450 U.S. 621 (1981);-.
Pete v. United States, 531 F.2d 1018, 1032 (Ct. Cl. 1976);
Lincoln Loan Co. v. State, 274 Ore. 49, 545 P.2d 105 (1976);
8/ See footnote supra.
Harris, Environmental Regulations, Zoning and withheld Municipal
Services: Takings of Property by Multi-Governnent Action, 25
Fla. L. Rev. 635, 682-685 (1973).
6. Government inaction and delay --y give rise to a
taking under section 6(a) and the Unitei States Constitution.
San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621,
101 S.Ct. 1287 (1981); Askew v. Gables by the Sea, Inc., 333
.So.2d 56, 61 (Fla. 1st DCA 1976), cert. denied, 345 So.2d 420
(1977); City of Shreveport v. Bernstein, 391 Sc.2d 1331 (La.
App. 1980); Charles v. Diamond, 41 N.Y.2d 318, 360 N.E.2d 1285,
382 N.Y.S.2d 594 (1977).
7. The cumulative effects of the various governmental
actions must be considered in determini-ns w-hether there has
been a "taking." E.g., Askew v. Gables-bv-the-Sea, Inc., 333
So.2d 56, 59 (Fla. 1st DCA 1976), cert. denied, 343 So.2d 420
(Fla. 1977); Board of Commissioners of S-ate Institutions v.
Tallahassee Trust Co., 108 S2d 74 (Fla. 1st DCA 1958), cert.
quashed, 116 So.2d 762 (Fla. 1949); Benerson v. United States,
548 F.2d 939, 948, 212 Ct. Cl. 375 (1977); Amen v. City of
Dearborn, 363 F. Supp. 1267, 1278 (E.D. Mich. 1973), rev'd on
other grounds, 532 F.2d 554 (6th Cir. 1974); Peacock v. County
of Sacramento, 271 Cal. App. 2d 845 Cal.Rptr. 391, 399, 403
(1969); Metropolitan Board of Zoning Appeals of Marion County
v. Gateway Corp., 256 Ind. 326, 268 N.E.2d 736 (1971); Ventures
in Property I v. City of Wichita, 225 Kan. 693, 594 P.2d 671
(1979). Browne v. Town of Hamptonburgh, 76 A.D.2d 848, 428
N.Y.S.2d 526 (1980); Charles v. Diamond, 47 A.D.2d 426, 366
N.Y.S.2d 921 (1975), modified, 41 N.Y.2d 318, 360 N.E.2d 1285,
382 N.Y.S.2d 534 (1977); Lincoln Loan Co. v. State, 274 Ore.
49, 545 p.2d 105, 109 (1976); Harris, Environmnental Regulations,
Zoning, and Withheld Municipal Services: Takings of Property
by Multi-Government Action, 25 Fla. L. ev.- 635 (1973). Actions
-* - -, -
was temporary and that delays would be resolved shortly. [Trella
at 26-27]. When that did not occur, cancellations rose sharply.
[Lipman, Volume I, at 20-22]. As a result, Atlantic ended up
with 2,079 unsold lots which it was unable to resell. Those
lots had been selling at $5,990 when -sales stopped, and therefore
they represented a significant portion of the economic viability
of the project. As Mr. Lipman testified without contradiction,
the normal land sales project would have had approximately 100
unsold lots by this time. [Lipman, Volu.e I at 22; See Trella
60. Defendants have argued that sales could have been
recommended if the company had merely applied to the Division
of Land Sales for permission to reco-uence sales. Defendant
adduced no evidence to support this contention; however, from
the testimony of Mr. Trella and from the record of this case,
the court finds as a fact that that was not a viable solution.
In the first place, in mid-1974, the Departnent of Business
Regulation instituted an administrative proceeding designed
to revoke the Atlantic's registration for failure to install
the improvements as promised in the offering statement by 1973.
Secondly, a request to extend that deadline was denied.
[Plaintiff's exhibit 96-99]. Third, when, caught between the
administrative proceeding to revoke its license for failure
to install the improvements and refusal of DER to permit the
improvements, Atlantic filed suit in this court in early 1975,
the position of the Divison clearly was that not only should
sales be stopped, and the registration be revoked, but also
that existing contracts be cancelled! [Transcript of March
11, 19753. That, plus the fact that the Division requested
no further sales be made under the existing registration
statements without its permission [Plaintiff's exhibit 97, 98,
99], supports Mr. Trella's testimony, which the court finds
credible, that sales could not be recon-enced, and the court
.and inactions of the Florida Legislature, the Department of
Environmental Regulation (and its predecessor, the Department
-of Pollution Control), the Department of Business Regulation,
the Divison of Florida Land Sales and Condcminiums, Volusia
County, and the St. John's River Water Management District are
to be considered actions of the State of Florida for purposes
of the "taking" clauses of the Florida and United States
8. There may be a taking of lands even though there
is no legal prohibition on using or developing lands, if as
a result of state action the land owner would be economically
or physically precluded from using or developing his lands.
Pennsylvania Coal Company v. Mahon, 260 U.S. 393, 414, 415
(1922); Arastra Limited Partnership v. City of Palo Alto, 401
F. Supp. 962 (N.D. Calif. 1975), vacated per stipulation, 417
F. Supp. 425 (N.D. Calif. 1976); Richmond Elks Hall Ass'n
v. Richmond Redevelopment Agency, 561 F.2d 1327 (9th Cir. 1977);
Hernandez v. City of Lafayette, 643 F.2d 1188, 1197, N.17 (5th
Cir. 1981); Virginia Surface Mining and Reclamation Ass'n, Inc.
v. Andrus,483 F.Supp. 425, 441 (D. W.Va. 1980), rev'd on other
grounds, U.S. 101 S.Ct. 2352 (1981); Sixth Camden
Corp. v. Township of Eyesham, 420 F.Supp. 709 (D.N.J. 1976);
Benenson v. United States, 548 F.2d 939, 947 (Ct. Cl. 1977);
Pete v. United States, 531 F.2d 1018, 209 Ct. Cl. 270 (1976);
Cardon Oil Co. v. City of Phoenix, 122 Ariz. 102, 593, P.2d
656 (1979); Kasparek v. Johnson County Board of Health, 288
N.W.2d 511, 516 (Iowa 1980); Ventures in Property I v. City
of Wichita, 225 Kan. 698, 594 P.2d 671, 682 (1978); Broadview
Apartments Co. v. Commission for Historical & Architectural
Preservation, 49 Md. App. 538, 433 A.2d 1214 (1981); Ed Zaagman,
Inc. v. City of Kentwood, 406 Mich. 137, 277 N.W.2d 475 (1979).
9. Six non-exclusive factors are to be considered in
determining whether governmental action effects a taking. Those
." '* / \ '-_. *
factors are: (1) the degree to which there is a diminution
in the value of the property; (2) whether there has been a
physical invasion of the property; (3) whether the state action
confers a public benefit or prevents a public harm; (4) whether
the state action promotes the public health, safety, welfare
or morals; (5) whether the state act-ion is arbitrary or
capricious; and (6) whether the state action curtails investment
backed expectations. Graham v. Estuary Properties, Inc., 399
So.2d 1374 (Fla. 1981).
10. Even if the lots could be sold for the nominal price
of $100 or $200 per acre as the price "the market will bear,"
that would not preclude a taking. Cardon Oil Co. v. City of
Phoenix, 122 Ariz. 102, 593 P.2d 656, 559 (1979).
11. There may be a taking even in the absence of a
physical encoachment or invasion. Gran--= v. Estuary Properties,
Inc., 399 So.2d 1374 (Fla. 1981); United States v. General Motors
Corp., 323 U.S. 373 377-378 (1945); Benitez v. Hillsborough
County Aviation Authority, 26 Fla. Supp. 53, aff'd, 200 So.2d
194 (Fla. 2d DCA), cert. denied. 204 So.2d 328 (Fla. 1967);
Thomas W. Garland, Inc. v. City of St. Louis, 586 F.2d 784,
787 (8th Cir.), cert. denied, 444 U.S. 899 (1979); Richmond
Elks Hall Ass'n v. Richmond Redevelopment Agency, 561 F.2d 13.27,
1330 (9th Cir. 1977); Benenson v. United States, 548 F.2d 539,
212 Ct. Cl. 375 (1977); Eldridge v. City of Palo Alto, 51 Cal.
App. 3rd 726, 124 Cal.Rptr. 547, 554-55 (1975); Duffield v.
DeKalb County, 242 Ga. 432, 249 S.E.2d 235 (Ga. 1978); Burrows
v. City of Keene, N.H. 432 A.2d 15, 19 (1981); Lutheran
Church in America v. City of New York, 35 N.Y.2d 121, 359
N.Y.S.2d 7, 15, 316 N.E.2d 305 (1974): Spears v. Berle, 63 A.D.2d
372, 407 N.Y.S.2d 590 (1978), rev'd and re.-anded for an
evidentiary hearing, 48 N.Y.2d 254, 422 N.Y.S.2d 636, 387 N.E.2d
1304 (1978); Metzger v. Brentwood, 117 ":.H.497, 374 A.2d 954,
*- .... -* W . .. -_i -" '- : "F ,
957-958 (1977); Ventures in Property I v. City of Wichita, 225
Kan. 698, 594 P.2d 671, 679-682 (1979) and cases cited therein;
Lincoln Loan Co. v. State, 274 Ore. 49, 545 P.2d 105, 106 (1976);
Snyder v. Railroad Borough, Pa. Corru-w. 430 A.2d 339
(1981); City of Austin v. Teague, 570 S.W.2d 389 (Tex. 1978);
San Antonio River Authority v. Garrett Bros., 528 SW.2d 266,
273 (Tex. Civ. 1975); Highline School District No. 401 v. Port
of Seattle, 87 Wash. 2d 6, 548 P.2d 1085, 1088-1089 (1976);
Harris, Environmental Regulations, Zoning, and Withheld Municipal
Services: Taking of Property by Multi-Government Action, 25
Fla. L. Rev. 635, 640-652 (1973).
12. The taking of property rights, rather than any
resulting benefit to the State, is crucial in inverse
condemnation. Altantic and the intervenors do not necessarily
have to prove that the taking of their lands benefitted the
State. Lincoln Loan Co. v. State, 274 Cre. 49, 545 p.2d 105,
108 (1976). In any event, the State's actions have resulted
in a public benefit. As a majority of the Untied States Supreme
Court has recognized, public benefits flow from actions such
as the State's in connection with Cape Atlantic Estates. See
San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621
(1981); Lutheran Church in America v. City of New York, 35 N.Y.2d
121, 359 N.Y.Sd 7 (1974); Spears v. Berle, 63 A.D. 372, 407
N.Y.S.2d 590, 593-594,.rev'd and remanded for an evidentiary
hearing, 48 N.Y.2d 254, 422 N.Y.S.25 35, 387 N.E.2d 1304 (1978).
13. The taking clause is specifically "meant to prevent
the arbitrary use of governmental power." Webb's Fabulous
Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 101 S.Ct. 446, 452
(1980); Estuary Properties; Burrows v. City of Keene,._ N.H.
432 A.2d 15, 20 (1981). [See transcript of Hearing of March
11, 1975, at 43]. It is unreasonable and arbitrary for St.
John's to obtain property in order to regulate what it could
. 'h. A
not regulate directly. See Cardon Oil Co. v. City of Phoenix,
122 Ariz. 102, 593 P.2d 656 (1979).
14. Even the valid exercise of t`-ne police power may
result in a taking. Graham v. Estuary Properties, Inc., 399
So.2d 1374, 1381 (Fla. 1981), citing Pennsylvania Coal Co. v.
Mahon, 260 U.S. 393 (1922). Accord, San Diego Gas & Elec. Co.
v. City of San Diego, 450 U.S. 621, 101 S.Ct. 1287 (1981);9/
Moviematic Industries Corp. v. Board of County Commissioners,
349 So.2d 667, 670-671 (Fla. 3rd DCA 1977); Kaiser Aetna v.
United States, 444 U.S. 164, 100 S.Ct. 383 (1979); Berman v.
Parker 348 U.S. 26 (1951); Devines v. Maier, 665 F.2d 138, 141-
142 (7th Cir. 1981); Hernandez v. City of Lafayette, 643 F.2d
1188, 1198 (5th Cir. 1981) Richmond Elks Hall Ass'n v. Richmond
Redevelopment Agency, 561 F.2d 1327, 1332 (9th Cir. 1977);
Benenson v. United States, 548 F.2d 939, 949, 212 Ct. Cl. 375
(1977); Bydion v. United States, 146 Ct. Cl. 764. 175 F.Supp.
891, 899 (1959); Ocean Acres Limited Partnership v. Dare County
Board of Health, 514 F. Supp. 1117, 1119-1120 (E.D.N.C. 1981);
State of Utah v. Andrus, 486 F.Supp. 995, 1011 (D. Utah 1979);
Arastra Limited Partnership v. City of Palo Alto, 401 F.Supp.
962 (N.D. Calif. 1975), vacated per stipulation, 417 F. Supp.
1125 (N.D. Calif. 1976); Eldridge v. City of Palo Alto, 51 Cal.
App. 3rd 726, 124 Cal.Rptr. 547, 556 (1975); Bartlett v. Zoning
Comm'n, 161 Conn. 24, 282 A.2d 907 (1971); Kasparek v. Johnson
County Board of Health, 288 N.W.2d 511, 517 (Iowa 1980);
Commissioner of Natural Resources v. V. S. Volpe Co., 206 N.E.2d
9/ The Supreme Court in San Diego Gas dismissed the appeal
because five justices held that the Supreme Court lacked
jurisdiction. The four dissenters, who would have held that
the Supreme Court had jurisdiction, went on to address the merits
of the appeal and, in doing so, approved Mahon. Justice
Rehnquist, who voted with the four justices that there was no
jurisdiction, indicated that if he had found jurisdiction he
"would have little difficulty in agreeing" with the dissenters.
Thus, five of the five justices who expressed an opinion on
the merits approved Mahon.
666 (Mass. 1965); Charles v. Diamond, 47 A.D.2d 426, 366 N.Y.S.2d
920, 925 (1975), modified, 41 N.Y.2d 312, 360 N.E.2d 1285, 382
N.Y.S.2d 594 (1977); Lutheran Church in America v. City of New
York, 35 N.Y.2d 121, 359 N.Y.S.2d 7, 15-16 (1974); Burrows v.
City of Keene, N.H. 432 A.2d 15, 19 (1981); Mattoon
v. City of Norman, 617 F.2d 1347, 1341 :4kDa. 1980); Steele
v. City of Houston, Tex. 603 S.W.2d 786, 789 (1980);
City of Austin v. Teague, Tex. 570 S.W.2d 389, 391-
392 (1978); San Antonio River Authority v. Garrett Bros., 528
S.W.2d 266, 273 (Tex. Civ. 1975); Harris, Environmental
Regulations, Zoning, and Withheld Municipal Services; Takings
of Property by Multi-Government Action, 25 ?la. L. Rev. 635,
691 (1973); Nichols, Eminent Domait, Vol. II, Section 6.35111.
15. There may be a taking even ir. the absence of
negligence, fault or wrongdoing by the State because the right
to compensation for taking is based upon the constitutional
prohibitions against takings without just compensation, not
on a tort theory. Holtz v. San Francisco Bay Area Rapid Transit
District, 131 Cal. Rptr. 646, 552 P.2d 430, 436 n.8 (1976);
Marin v. City of San Rafael, 111 Cal. App. 3d 591, 168 Cal.
Rptr. 750 (1980); Wireman v. City of Greenuo, 582 S.W.2d 48,
50 (Ky. 1979); B&W Const. Co., Inc. v. City of Lacey, 19 Wash.
App. 220, 577 P.2d 583, 585 (1978).
16. This Court may not, and will not, review the validity
of the permit denial, but the general background of the denial
of the permit, the delay, the grounds therefore, and the
subsequent granting thereof are relevant in determining, in
accordance with Estuary Properties, whether government action
has precluded a public harm, conferred a public benefit, advanced
the public health, safety, welfare an-d morals, or been arbitrary
and capricious. Zabel v. Pinellas County Water & Navigation
Control Auth., 171 So.2d 376 (Fla. 1965); City of Austin v.
Teague, 570 S.W.2d 389 (Tex. 1968); Charles v. Diamond, 47 A.D.2d
426, 366 N.Y.S.2d 920 (1975), modified, 41 N.Y.2d 318, 360 N.E.2d
1285, 382 N.Y.S.2d 594 (1977).
WHEREFORE, based upon the foregoing findings of fact
and conclusions of law, it shall be, and it hereby is,
ORDERED and ADJUDGED that:
1. The cumulative effects of the actions of the various
agencies of the State have rendered the lots of Cape Atlantic
Estates, described in Plaintiff's Exhibit 4, of no reasonable
use, the State has "taken" the lots, and Atlantic is
constitutionally entitled to compensation therefore.
2. The State shall institute eminent domain proceedings
against the lots described in Plaintiff's Exhibit 4 within 30
days of the date of this order. In determining just
compensation, there should be no diminution of value because
of the effects of the acts of the State or its agencies, which
have contributed to the taking, and the lots should be valued
as if they had been improved with graded dirt roads and surface
*water drainage as of the date of taking. The date of taking
is determined to be September 1, 1977.
3. The cumulative effects of the actions of the various
agencies of the State has rendered the lots in Cape Atlantic
Estates, owned by or under agreements for deed to the members
of the Simon class and Harold Housewart, of no reasonable use,
the State has "taken" those lots, and the members of the Simon
class and Mr. Housewart are constitutionally entitled to
4. The State shall institute eminent domain proceedings
against the lots owned or under current contract by the members
, >. *'-'1<^
of the Simon class and Harold Housewart, described in Exhibit
4, within 30 days of the date of this order. In determining
just compensation, there should be no diminution of value because
of the effects of the acts of the State or its agencies, which
have contributed to the taking, and the lots should be valued
as if they had been improved with graded dirt roads and surface
water drainage as of the date of taking. The date of taking
is determined to be September 1, 1977.
5. Jurisdiction is retained to determine reasonable
attorneys' fees for this portion of the case.
6. The motions for rehearing as to the dismissal of
the Department of Business Regulation and Volusia County are
DONE and ORDERED at Tallahassee, Florida, this 7 day
of May, 1982.
COPIES FURNISHED TO:
Daniel C. Brown, Esquire
Peter J. Winders, Esquire
Louis F. Hubener, Esquire
Charles G. Stephens, Esquire
Daniel D. Eckert, Esquire
John C. Briggs, Esquire
Cynthia S. Tunnicliff, Esquire