1stDCA Totally Screws Up the Analysis in a Bert Harris Case – [but Probably Reaches the Right Result]
Well, the headline’s not totally fair. The Court properly got that a successor landowner could maintain the suit – and they got the right result. But in the process, the Court totally screwed up the analysis.
The case involves the City of Jacksonville abandoning a public street to a private homeowner’s association- a process that is not the same as vacating the street. When the street was abandoned, the private HOA refused to allow and adjoining landowner access to it. The result of the HOA’s refusal to permit access was that the landowner was unable to proceed with an 8 lot subdivision of the adjoining land.
The landowner sued the City under the Bert Harris Act, claiming that the street abandonment inordinately burdened its “existing use” in the subdivision. Under the definitions in the Act, the subdivision would be an existing use if it was a “reasonably foreseeable, non-speculative land use, suitable for the real property, compatible with adjacent uses and that had raised the fair market value” of the land. Under one of the two tests for an inordinate burden under the Act, the land would be inordinately burdened if the owner was permanently unable to attain reasonable investment backed expectations. However, the Act applies only where the “specific action of a governmental entity” results in an in ordinate burden.
The problem here is that the Court totally confused the issues. It did not deal at all with the simple fact that the ultimate action that prevented the subdivision was not the abandonment of the street, but the HOA’s subsequent refusal to permit access. The court then got hung up on the fact that the abandonment was pending when the transaction was finalized , and held that the landowner could not have reasonable investment backed expectations where the action was known. Problem: this violates the US Supreme Court decision in Pallazzolo v. Rhode Island, where the Court held that a property owner’s RIBE are NOT automatically frustrated by the existence of a regulation when the property is acquired. See also the Florida case of Vatalaro v. DEP.
Further, the Court mixed up the impact of the reasonable investment backed expectation analysis, which applies only to one prong of the “inordinate burden” test, with the “reasonably foreseeable” analysis – which applies to whether the landowner could reasonably expect the use without the government action . The whole definition of a “reasonably foreseeable use” goes to the question of whether, immediately before the government act, the value of a particular use would be part of the valuation of the property – that is, whether the use would be included if the property were valued for eminent domain.
Practitioners need to focus on the clear distinguishing characteristic here: that the ultimate action was private, not governmental, and that the uses were not protected against that action.