Legal Report, July 2021

General Counsel: Davis & Associates, P.A.

1. Margate Cmty. Redevelopment Agency v. New Urban Cmtys., LLC, 2021 Fla. App. LEXIS 5773 (Fla. 4th DCA 2021). Sovereign immunity; land use plan amendments.
This case concerns the Margate Community Redevelopment Agency (“CRA”), a dependent special district created by the City Commission of the City of Margate (“City”). The CRA and City are closely-related entities, as the CRA Board and the City Commission are made up of the same people. In 2015, the CRA issued a Request for Proposal for the development of a publicly-held property into a mixed use sector. The CRA awarded the project to New Urban Communities, LLC (“New Urban”), and the project was effectuated by a development agreement and preliminary project schedule. As part of the project schedule, the City was required to submit a Land Use Plan Amendment (“LUPA”) request to Broward County to increase the number of residential units available for development. Broward County granted the City’s LUPA request, but in an unanticipated change of events the City Commission ultimately declined to adopt the LUPA request as granted by the County. New Urban sued both the CRA and the City for anticipatory breach of the project’s development agreement. Specifically, New Urban alleged tortious interference on the part of the City and conspiracy to tortiously interfere on the part of both the City and CRA. In response, the CRA moved to dismiss, arguing that New Urban’s economic tort claims were barred by sovereign immunity.

The trial court denied the CRA’s motion to dismiss, but the denial was reversed by the Fourth District Court of Appeal (“DCA”) on appeal. In its holding, the Fourth DCA agreed that New Urban’s two economic tort claims were barred by sovereign immunity because they were “premised on the denial of a land use plan amendment, which is a discretionary governmental function.” Despite the executed development agreement, the City’s ultimate rejection of the LUPA request to increase residential units available for development was a discretionary decision within the City’s governmental scope of authority. Therefore, sovereign immunity barred New Urban from recovering monetary damages from the CRA and City based on claims of tortious interference and conspiracy to tortiously interfere. This opinion affirms existing precedent that sovereign immunity will bar recovery of economic damages against local government entities for land use denials that also qualify as discretionary governmental functions.

2. Yacht Club by Luxcom, LLC v. Village of Palmetto Bay Council, 2021 Fla. App. LEXIS 3484 (Fla. 3d DCA 2021). Second-tier certiorari; reverse spot zoning.
In 2018, Yacht Club by Luxcom, LLC (“Yacht Club”) purchased a 71-acre parcel in the Village of Palmetto Bay ("Village") to develop a large-scale hospital campus. The Village opposed the development and sought to avert it by rezoning the property and surrounding area’s zoning designation from "Interim" to "Estate Single Family" (residential). Yacht Club challenged the rezoning by filing a certiorari petition, which was denied by the circuit court. Yacht Club subsequently sought second-tier certiorari review with the Third DCA, where the Third DCA applied the two-prong test: 1) whether the circuit court applied the correct law; and 2) whether the circuit court afforded procedural due process.

On appeal, Yacht Club first argued that the circuit court failed to apply the correct law when it determined that the Village’s rezoning action did not constitute impermissible “reverse spot zoning,” which occurs when a zoning ordinance is targeted in such a way to create a “veritable zoning island or . . . peninsula in a surrounding sea of contrary zoning classification.” The Third DCA rejected this argument, however, finding that the circuit court correctly upheld the Village’s rezoning action because of competent, substantial evidence within the administrative record to support the rezoning, including the fact that Yacht Club itself owned surrounding property with the same residential designation as its rezoned 71-acre parcel. Yacht Club also argued that the Third DCA should not give deference to the circuit court’s decision because of Yacht Club’s important “property rights” interests. The Third DCA also rejected this argument, asserting that second-tier certiorari should only be granted for situations “when there has been a violation of a clearly established principle of law resulting in a miscarriage of justice." This opinion affirms the limited scope of second-tier certiorari review for local land use decisions, but also provides a notable example of a landowner raising a “reverse spot zoning” claim against a municipality.