Harris Act Based on Equitable Estoppel Does Not Apply to Transactions Forbidden by Law or Public Policy
Town of Ponce Inlet v. Pacetta, LLC, Etc., Et Al., 38 Fla. L. Weekly D1481
Issues: Whether trial court erred in finding Ponce Inlet liable to Pacetta under the Harris Act?
Facts: Pacetta had assembled a piece of riverfront real property on the shores of the Halifax River in Poice Inlet, Florida, consisting of approximately 16 acres. The congruent waterfront property and two small adjoining residential parcels were acquired by Pacetta LLC, Down the Hatch, Inc., and Mar-Tim, Inc., between June 14, 2004 and May 10, 2006. A beneficial relationship with the Town, its counsel, its planning department and, for the most part, with its citizens developed. Approval for the project did require appropriate changes in the Comprehensive Land-Use Plan and land use development code regulations consistent with the discussions that the parties had over a long period of time. In November of 2008, when the Comprehensive Land-Use Plan was up for its final approval, the plan as originally expected by Pancetta was defeated based on a vote of the outgoing council. Suit followed.
Rule: The Bert J. Harris Private Property Rights Protection Act enables property owners to seek relief, which may include compensation for actual loss to the fair market value if its real property caused by government action, when a “specific action of a governmental entity has inordinately burdened…a vested right to a specific use of real property.” §70.001(2). The Act defines the term “action of a governmental entity” as meaning “a specific action of a governmental entity which affects real property.” §70.001(3)(d). The Act further defines the term “inordinate burden” as meaning, inter alia, government action that restricts or limits a vested right to a specific use of property. §70.001(3)(e). A vested right can be established through the application of the principle of equitable estoppel. §70.001(3)(a).
Analysis: To prevail based on the Harris Act, Pacetta was required to prove that an action by Ponce Inlet constituted an inordinate burden to a vested right regarding the use of its properties. The trial court concluded that Pacetta sustained its burden of proof because Pacetta’s vested right to develop its properties, as negotiated by the parties, was created by the application of the principle of equitable estoppel. The doctrine of equitable estoppel may be invoked against a governmental body when a property owner (1) relying in good faith (2) upon some act or omission of the government (3) has made such a substantial change in position or incurred such extensive obligations and expenses that it would be highly inequitable and unjust to destroy the rights that the owner has acquired. Verizon Wireless Pers. Commc’ns, L.P. v. Sanctuary at Wulfert Point Cmty. Ass’n, 916 So. 2d 850, 856 (Fla. 2d DCA 2005). However, estoppel should be invoked against the government only in exceptional circumstances. Watson Clinic, LLP v. Verzosa, 816 So. 2d 832, 834 (Fla. 2d DCA 2002). And, most importantly, the doctrine of estoppel does not generally apply to transactions that are forbidden by law or contrary to public policy. Montsdoca v. Highlands Bank & Trust Co., 85 Fla. 158, 95 So. 666, 668 (1923); Dade County v. Gayer, 388 So. 2d 1292 (Fla. 3d DCA 1980).
Holding: As explained in Citrus County v. Halls River Development, Inc., 8 So. 3d 413 (Fla. 5th DCA 2009), equitable estoppel can be invoked only when a property owner relies in good faith upon some government action. No such good faith reliance was established in this case. At the time Pacetta purchased its properties, Ponce Inlet’s Comprehensive Land-Use Plan expressly prohibited the type of development which Pacetta proposed for its properties. Any assurances by town officials that the Comprehensive Plan would be amended so as to authorize Pacetta’s development plans could not be relied upon in good faith by Pacetta, since town officials lacked the authority to unilaterally amend the Comprehensive Land-Use Plan. See §163.3184(4), (15), Fla. Stat. (2009) (requiring proposed change to Comprehensive Plans to be subject to approval by various government agencies). Recognition of a vested right based on assurances from town officials to amend the Comprehensive Land-Use Plan would also be in violation of public policy, in light of the public hearings and other government approvals required for Comprehensive Plan Amendments. Id.
Conclusion: Accordingly, the trial court’s order finding Ponce Inlet liable to Pacetta under the Harris Act is REVERSED.
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