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Fuchs v. Robbins dictum on property appraiser standing to challenge taxing statutes inconsistent with longstanding precedent set in Atlantic Coast Line.

Throughout Florida, individual property appraisers are challenging the constitutionality of taxing statutes enacted by the legislature, including laws that have been on the books for decades. (1) They are bringing these challenges despite a line of cases beginning with State ex rel. Atlantic Coast Line Ry. Co. v. State Bd. of Equalizers, 84 Fla. 592, 94 So. 681 (1922), which hold that they have no standing to do so. Instead, dictum in Fuchs v. Robbins, 818 So. 2d 460, 464 (Fla. 2002), has emboldened some appraisers to attack property tax laws of which they disapprove. (2)

In Fuchs, the Florida Supreme Court held that a property appraiser lacked standing to initiate an action to challenge the constitutionality of a property tax statute. However, the court then suggested in dictum that an appraiser may have standing to defensively challenge a statute in an action initiated by a taxpayer contesting a property assessment. Of course, such a defensive challenge generally would arise only after the appraiser first disobeyed the statutory command when assessing property, in effect forcing the taxpayer to initiate the litigation. By so acting, the Florida Supreme Court held long ago, the appraiser would be encroaching upon the exclusive power of the judiciary to determine the constitutionality of state statutes.

The dictum in Fuchs relies upon dictum in an earlier decision, but it does not square with the clear holdings of decisions in which the Florida Supreme Court settled this issue. For example:

* The Fuchs dictum directly contradicts the rationale articulated in Turner v. Hillsborough Aviation Authority, 739 So. 2d 175 (Fla. 2d DCA 1999), the opinion of the Second District Court of Appeal that was expressly adopted by the Fuchs court to address the issue of a property appraiser's standing to challenge Florida tax statutes.

* It directly conflicts with the holding in Atlantic Coast Line, a case that was relied upon by the Fuchs court, that involved just such a defensive challenge to a statute, and that has provided the rule of decision in other cases decided by the Florida Supreme Court.

* The Fuchs dictum conflicts with the general standing doctrine applicable to public officials enunciated in other decisions, and which is grounded upon sound public policy.

The Role of the Property Appraiser

Property appraisers in Florida are constitutional officers, but they have no inherent constitutional duties. Their duties are specified by statute. (3) They assess property for ad valorem tax purposes. (4) They are not responsible for enacting tax laws or prescribing tax policy; they do not impose or levy taxes, they do not collect taxes, and they do not refund taxes. (5)

Fuchs v. Robbins

Fuchs involved a challenge to Florida's "substantial completion" Statute. (6) This statute provides that real property shall be assessed on January 1 if it is substantially complete. (7) In Collier County v. State, 733 So. 2d 1012 (Fla. 1999), this law was described as a "timing statute." (8) Without this law, each year thousands of homeowners would be required to pay taxes on their partially constructed homes, even though they could not reside in them and thus could not claim entitlement to the homestead exemption. (9)

In Fuchs, the Dade County property appraiser refused to apply the statute to a partially constructed hotel building, and the taxpayer challenged the assessment. The value adjustment board (VAB) ruled for the taxpayer, and the property appraiser initiated a lawsuit challenging the VAB's decision and the validity of the statute. A panel of the Third District Court of Appeal initially ruled that the property appraiser had standing, and that the statute was constitutional. On rehearing en banc, the Third District reversed itself and ruled that the statute was unconstitutional. (10) The majority opinion on rehearing did not address the standing issue, but it was discussed in a concurring opinion. The court concluded that the appraiser was in a defensive posture because he was reacting to a decision of the VAB, and that in any event the appraiser was entitled to pursue his claim because he was involved in collection of public funds, which could be equated to disbursement of public funds, for which there exists an exception to the general rule which denies public officials standing to challenge state laws.

Meanwhile, the Second District Court of Appeal was considering the Turner case. In that dispute, the Hillsborough County property appraiser refused to recognize an ad valorem tax exemption for governmental property authorized by F.S. [section] 196.012(6). The exemption was claimed for property owned by the Hillsborough Aviation Authority and leased to the Tampa Sports Authority for use as a baseball facility. The aviation authority petitioned the VAB, challenging the appraiser's denial of the exemption, and prevailed.

The property appraiser then brought suit in circuit court, challenging the VAB's decision to grant the exemption. The aviation authority moved to dismiss the property appraiser's complaint, alleging that he lacked standing to challenge the constitutionality of a statute. The property appraiser argued that he was not challenging the statute, only the decision of the VAB to apply it, and that--in any event--he fell within exceptions to the general rule that otherwise precludes a public official from challenging the constitutionality of a statute.

The Second District ruled that the property appraiser's claim effectively challenged the constitutionality of the statute, and that he lacked standing to do so. In rejecting the appraiser's argument that he was entitled to challenge a statute defensively, the Second District explained:

[I]f the property appraiser had followed the law initially, as State ex rel. Atlantic Coast Line Railway Co. dictates he is obligated to do, the taxpayer would not have been forced to petition the VAB and set the litigation in motion. It both defies logic and violates the rule of State ex rel. Atlantic Coast Line Railway Co. to suggest that Turner can ignore the law by denying an exemption based on his belief that it is unconstitutional and then be allowed to ask the court to approve his disobedience by upholding his denial.

Turner, 739 So. 2d at 178.

The Turner court declined to decide whether a "disbursement of public funds" exception to the standing rule applied to property appraisers in this situation, ruling that such an exemption was expressly precluded by F.S. [section] 194.036(1)(a). That statute provides that nothing in the law permitting a property appraiser to challenge a decision of a VAB is intended to permit the appraiser to institute a suit to challenge the constitutionality of a statute. The court also rejected the appraiser's argument that application of the statute would cause him to violate his oath of office, explaining that this excuse for disobeying the law was "no longer viable, if indeed it ever was." Id. at 178. The Second District acknowledged conflict with the Third District's decision in Fuchs, and certified the case to the Florida Supreme Court.

In a unanimous per curiam decision, the Florida Supreme Court held that "we approve the decision in Turner, and reverse the decision in Fuchs." Fuchs, 818 So. 2d at 464. The court ruled that the property appraiser lacked standing to challenge F.S. [section] 192.042(1), explaining:

Historically, it has been recognized that an appraiser acting in his or her official capacity cannot ordinarily initiate an independent action challenging the validity of a taxing statute which allegedly provides for an ad valorem tax exemption (express or de facto) which is contrary to limitations imposed by the Florida Constitution. See Markham v. Yankee Clipper Hotel, Inc., 427 So. 2d 383 (Fla. 4th DCA) (holding that a property appraiser who is dissatisfied with the wisdom of a taxation statute cannot challenge the validity of the statute in an action for declaratory relief), review denied, 434 So. 2d 888 (Fla. 1983).

Fuchs, 818 So. 2d at 463-464.

Notwithstanding the Florida Supreme. Court's holding in Fuchs, its adoption of the Second District's decision in Turner, and its reliance upon Atlantic Coast Line, elsewhere in Fuchs the court gratuitously states that "[t]he appraiser may also raise such a constitutional defense in an action initiated by the taxpayer challenging a property assessment." Id. In support of this statement, the court quotes dictum from Department of Education v. Lewis, 416 So. 2d 455,458 (Fla. 1982), that "[I]f, on the other hand, the operation of a statute is brought into issue in litigation brought by another against a state agency or officer, the agency or officer may defensively raise the question of the law's constitutionality." Id. at 458. Yet neither the circumstances in Lewis nor the cases cited by Lewis support perpetuation of such a sweeping exception to settled standing doctrine. More importantly, the Fuchs dictum is directly at odds with Atlantic Coast Line, where the agency was defending against an action initiated by a taxpayer contesting an assessment.

Public Officers Must Presume Laws to be Valid

Florida follows a longstanding rule, based upon Atlantic Coast Line, that "[s]tate officers and agencies must presume legislation affecting their duties to be valid, and do not have standing to initiate litigation for the purpose of determining otherwise." Lewis, 416 So. 2d at 458. Lewis involved a challenge by the State Department of Education to the constitutionality of appropriations proviso language. Lewis did not involve a defensive challenge; thus, any statement by the Lewis court regarding defensive challenges is necessarily dictum. (12) The holding in Lewis was that the Department of Education lacked standing to initiate a challenge to the statute because "the agency [did] not have a sufficiently substantial interest or special injury to allow the court to hear the challenge." Id.

This standing doctrine has been applied expressly to property appraisers challenging tax statutes. In Department of Revenue v. Markham, 396 So. 2d 1120 (Fla. 1981), the Florida Supreme Court held that a property appraiser who disapproved of a statute on taxation of household goods and personal effects lacked standing to challenge the law. As the Markham court explained, it is "[f]or important policy reasons, [that] courts have developed special rules concerning the standing of governmental officials to bring a declaratory judgment action questioning a law those officials are duty-bound to apply." Id. at 1121. (13) One such important policy consideration is the state's separation of powers doctrine. (14)

The separation of powers doctrine grounded the court's decision in the Atlantic Coast Line case cited by the Florida Supreme Court in both Lewis and Fuchs. Atlantic Coast Line is the first in the line of cases cited by Lewis in support of the general standing rule, and it is the principal case cited by the Second District in the Turner opinion adopted by the Florida Supreme Court in Fuchs. It is the polestar decision on the issue of whether a public official may challenge--whether offensively or defensively--the constitutionality of a statute the official is obligated to administer.

In Atlantic Coast Line, a taxpayer challenged the comptroller's assessment and valuation of its railroad property and appealed to the state board of equalizers (the governor, attorney general, and treasurer). The board refused to accept the appeal and defended by challenging the constitutionality of the statute that vested appeals jurisdiction in the board. The Florida Supreme Court explained that the board's defensive challenge to the statute "involves the right of a branch of the government, other than the judiciary, to declare an act of the Legislature to be unconstitutional." Atlantic Coast Line, 94 So. at 682. The court refused to allow the board to raise the constitutionality of the statute as a defense. Instead, the court issued a writ of mandamus requiring the board to perform its duties, holding:

The contention that the oath of a public official requiring him to obey the Constitution places upon him the duty or obligation to determine whether an act is constitutional before he will obey it is, I think, without merit. The fallacy in it is that every act of the Legislature is presumptively constitutional until judicially declared otherwise, and the oath of office "to obey the Constitution" means to obey the Constitution, not as the officer decides, but as judicially determined.

Id. at 682-683 (emphasis supplied).

Atlantic Coast Line emphasized the board's lack of "any material interest, personal or pecuniary, that would be injuriously affected or prejudiced by the act in question, entitling [the Board] to question its constitutionality." Id. at 684. The court distinguished Board of Public Instruction for Santa Rosa County v. Croom, 57 Fla. 347, 48 So. 641 (1909), in which the treasurer's interest was directly affected because he was "under a heavy bond. If he paid money out of the treasury under the provisions of an unconstitutional act, he or his bondsmen would have had to bear the loss. His right to raise the question of the constitutionality of the act involved did not grow out of the obligation of his oath of office, nor out of his official position, but because he was liable to be injured pecuniarily." Id. Croom was the first in a series of cases that evolved into the "disbursement of public funds" exception to the general standing rule; however, the Florida Supreme Court held it was inapplicable when a public official sought to defensively challenge the statute in Atlantic Coast Line.

This doctrine precluding a defensive challenge to a statute has been applied by the Florida Supreme Court in other cases. In Barr v. Watts, 70 So. 2d 347 (Fla. 1953), the court disallowed a defensive challenge to a statute by the board of law examiners. In Barr, an applicant for admission to practice law in Florida brought a mandamus proceeding against the board of law examiners to allow her to take the examination pursuant to conditions specified by the legislature. The board defended its actions by challenging the constitutionality of the statute. The Florida Supreme Court held that the board lacked standing to challenge the law as a defense, and that any argument that adherence to such law would cause board members to violate their oath of office had been settled by Atlantic Coast Line.

Public Funds Exception to the General Rule

As previously noted, Lewis, while not involving a defensive challenge to a law, stated that "[i]f, on the other hand, the operation of a statute is brought into issue in litigation brought by another against a state agency or officer, the agency or officer may defensively raise the question of the law's constitutionality." Lewis, 416 So. 2d at 458. In support of this dictum, the Lewis court cited three cases: City of Pensacola v. King, 47 So. 2d 317 (Fla. 1950); State ex rel. Harrell v. Cone, 130 Fla. 158, 177 So. 854 (1937); and State ex rel. Florida Portland Cement Co. v. Hale, 129 Fla. 588, 176 So. 577 (1937), overruled in part sub. nom., Hale v. Bimco Trading, 306 U.S. 375 (1939). All three of these cases turned upon the fact that the public official questioning the constitutionality of a statute was required by the terms of the statute to disburse or expend public funds in furtherance of the statute. (15)

The earliest of these decisions, (16) Cone, involved a case in which the comptroller refused to disburse road funds to Washington County, was sued in mandamus, and defended by challenging the constitutionality of the law requiring disbursement of the funds. The Florida Supreme Court, after analyzing the comptroller's constitutional duties to "examine, audit, adjust, and settle the accounts of all officers of the state," concluded that he was constitutionally charged with "control and disbursement of public funds" to a degree that gave him an adequate personal interest in the matter, much as the treasurer had such a personal interest in Croom. Cone, 177 So. at 856-857.

Separation of powers issues do not arise in cases such as Cone, where a public official is attempting to exercise powers derived from the Florida Constitution and challenges the constitutionality of a statute that impinges upon those constitutionally derived powers. Later cases erroneously interpret Cone more broadly, suggesting that it permits any public official to challenge a statute if the statute requires disbursement or expenditure of public funds.

Portland Cement, decided within months of Cone, involved a case in which the state road department was sued in mandamus to coerce compliance with a statute requiring inspection of cement imported from outside Florida. In defense, the state road department challenged the validity of the inspection law. The Florida Supreme Court determined that there was "no material difference between the status of the state road department in the instant case and the status of Mr. Croom, as comptroller, and Mr. Knott, as state treasurer in that case" because both were required to expend public funds. 177 So. at 855. However, there was in fact a material difference in the status of the parties: Croom and Knott were exercising powers derived from the Florida Constitution; the state road department was not.

King involved a challenge by the railroad and public utilities commission to a statute authorizing the City of Pensacola to regulate taxicabs. The Florida Supreme Court allowed the commission to challenge the statute based upon the fact that the commission would have to expend public funds administering the law. However, this "exception" swallows the general rule because all public officials expend public funds to administer laws. That certainly was the case with the board of equalizers in Atlantic Coast Line. Thus, the courts should acknowledge that King simply went too far and now lacks any legal or policy validity. As explained by the Turner court,

Shortly after King was decided, the Supreme Court rejected this same argument, distinguished the dictum in King and reaffirmed the rule of Atlantic Coast Line Railway Co. v. State Board of Equalizers, 84 Fla. 592, 94 So. 681 (1922), that the "right to declare an act unconstitutional ... cannot be exercised by the officers of the executive department under the guise of the observance of their oath of office to support the Constitution."

Turner, 739 So. 2d at 178, citing Barr.

Conclusion

Eighty years ago, the Florida Supreme Court held in Atlantic Coast Line that a public official may not defensively challenge the constitutionality of a statute because "[t]he oath of office to `obey the Constitution' means to obey the Constitution, not as the officer decides, but as judicially determined." Atlantic Coast Line, 94 So. at 683. As the court explained, the gubernatorial veto power--and the legislative override function--would be meaningless otherwise because a governor could simply refuse to enforce laws with which he disagreed. In the ensuing years, this decision guided the court to decisions which denied standing to public officials who wished to challenge statutes both offensively and defensively.

The dictum in Fuchs, based as it is on the slender reed of the dictum in Lewis, provides no legitimate footing for property appraisers to continue their selective assault on statutes governing ad valorem taxation. These challenges to Florida's property tax laws by property appraisers--relying on the dictum in Fuchs for the standing they need to enter the courthouse door--are a vivid example of the mischief that can arise from dictum. Certainly, these challenges demonstrate disrespect for the very laws these officials are sworn to enforce.

The Atlantic Coast Line court addressed that circumstance as well. With the words of Abraham Lincoln in his first inaugural address, the court summoned Florida's public officials to a "higher sense of duty" to respect the laws handed down by elected lawgivers: "I do suggest that it will be much safer for all, both in official and private stations, to conform to and abide by all those acts which stand unrepealed than to violate any of them trusting to find impunity in having them held to be unconstitutional."

Despite the dictum-based-upon-dictum in Fuchs, the rule of Atlantic Coast Line remains good law. Its vitality should be judicially confirmed in order to curtail the unseemly spectacle of public officials--whether in an original action or in the guise of an affirmative defense--seeking to invalidate the very laws they are sworn to enforce.

(1) Property appraisers have challenged the constitutionality of the following Florida Statutes: Sections 189.403(1) (providing that special district property used for special district purposes shall be treated in the same manner as municipal property used for municipal put poses; 192.042(1) (providing that real property will not be assessed until substantially completed); 192.042(2) (providing that construction work in progress will not be assessed until substantially completed); 193.621 (providing that pollution control devices shall be deemed to have value no greater than salvage value); and 196.1978 (providing an exemption for affordable housing serving low income residents).

(2) While property appraisers are challenging the above-described statutes and arguing that these run afoul of the constitutional fair market value standard, they do not appear to be challenging similar statutes that may be more politically sensitive, such as [section] 193.623 (salvage value treatment for building renovations to provide access to physically handicapped persons); [section] 196.081 (exemption for permanently and totally disabled veterans and surviving spouses).

(3) See FLA. CONST. art. VIII, [section] 1(d) (providing for establishment of the office of the property appraiser, but assigning no specific duties); and Burns v. Butscher, 187 So. 2d 594, 595 (Fla. 1966) (holding that although property appraisers--then referred to as "tax assessors" were constitutional officers, their duties were "prescribed by law," and that "we cannot stop there and infer that because the assessors are created in the constitution their duties as constitutional officers as they are `known at the common law cannot be taken away by the legislature' as the attorney general suggests.")

(4) See FLA. STAT. [section] 192.001(3) (providing in relevant part that "'county property appraiser' means the county officer charged with determining the value of all property within the county, with maintaining certain records connected therewith, and with determining the tax on taxable property after taxes have been levied."

(5) See FLA. STAT. [section] 200.065(2) (providing that no millage shall be levied until a resolution or ordinance has been approved by the governing board of the taxing authority); FLA. STAT. [section] 192.001(4), (defining the role of the tax collectors); and FLA. STAT. [section] 197.182 (prescribing the process for payment of refunds).

(6) See FLA. STAT. [section] 192.042(1).

(7) See FLA. STAT. [section] 192.042.

(8) Collier County v. State, 733 So. 2d 1012 (Fla. 1999).

(9) See FLA. STAT. [section] 196.031.

(10) 738 So. 2d 338 (Fla. 3d D.C.A. 1998).

(11) While the Fuchs court cited Markham v. Yankee Clipper, it would appear that the intended citation may have been to Department of Revenue v. Markham, 396 So. 2d 1120 (Fla. 1981). In Department of Revenue v. Markham, the Florida Supreme Court held that a property appraiser who disapproved of a statute on taxation of household goods and personal effects lacked standing to challenge the law. In contrast, in Yankee Clipper, the Fourth District cited dictum from Department of Education v. Lewis, 416 So. 2d 455 (Fla. 1982), to find that the property appraiser had standing to challenge the "substantial completion" law, and that it was valid. Notwithstanding Yankee Clipper, the Fourth District later ruled in Brazilian Court Hotel v. Walker, 584 So. 2d 609 (Fla. 4th D.C.A. 1991), that the property appraiser lacked standing to challenge a statute.

(12) See Coastal Petroleum Co. v. American Cyanamide Co., 492 So. 2d 339 (Fla. 1986), cert. denied, Mobil Oil Corp. v Board of Trustees of Internal Improvement Trust Fund of Florida, 479 U.S. 1065.

(13) The policy considerations at play in Department of Revenue v. Markham are no less important in a case in which a property appraiser disobeys a statute; forces the taxpayer to initiate an action compelling obedience to the statute; and then requests a declaration on the statute's validity via a motion on the appraiser's counterclaim or affirmative defense which itself complains that the statute is unconstitutional. Other instances in which Florida courts have declined to permit property appraisers to challenge statutes include: Brazilian Court Hotel v. Walker, 584 So. 2d 609 (Fla. 4th D.C.A. 1991); Jones v. Department of Revenue, 523 So. 2d 1211 (Fla. 1st D.C.A. 1988); and Miller v. Higgs, 468 So. 2d 371 (Fla. 1st D.C.A. 1985).

(14) See FLA. CONST. art. III, [section] 3.

(15) The concurring opinion in the Third District's decision in Fuchs argued that "[a]lthough I have been unable to find a case which specifically equates the `disbursement' of public funds with the `collection' of same for purposes of establishing standing in the present context, it is absurd to conclude that standing would exist for one and not the other." Fuchs v. Robbins, 738 So. 2d at 349-350. Assuming, arguendo, that disbursement of public funds did equate to collection of public funds, it should be recognized that property appraisers do not collect taxes; that is the role of the tax collectors. Property appraisers value property.

(16) While Cone is treated as later than Portland Cement because rehearing was granted, Cone was the earlier decision on standing, and it informed the court's standing analysis in Portland Cement.

Vicki Weber is a shareholder with Hopping, Green & Sams, P.A., Tallahassee, practicing in the area of state and local taxation. She is a former general counsel for the Florida Department of Revenue and began her career 25 years ago as an attorney for the House Tax Committee.

This column is submitted on behalf of the Tax Section, Richard Josepher, chair, and Michael D. Miller, Benjamin A. Jablow, and Normaria Segurola, editors.
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Title Annotation:Florida
Author:Weber, Vicki
Publication:Florida Bar Journal
Date:May 1, 2003
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