Title: Vicki Thomas v. Clean Energy Coastal Corridor, etc.

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
 
____________ 
 
No. SC14-1282 
____________ 
 
VICKI THOMAS, et al.,  
Appellants, 
 
vs. 
 
CLEAN ENERGY COASTAL CORRIDOR, etc., et al.,  
Appellees. 
 
[October 1, 2015] 
 
POLSTON, J. 
 
This case is before the Court on appeal from a circuit court judgment 
validating a proposed bond issue by Clean Energy Coastal Corridor (Clean 
Energy).1  We affirm the circuit court’s decision to validate the bonds, but remand 
for the circuit court to require Clean Energy to amend the financing agreement as 
described herein. 
 
 
                                          
 
 
1.  We have jurisdiction.  See art. V, § 3(b)(2), Fla. Const. 
 
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BACKGROUND 
Clean Energy was created pursuant to section 163.01(7), Florida Statutes, by 
interlocal agreement between three municipalities located in Miami-Dade County, 
Florida.2  Clean Energy is a separate legal entity from the municipalities that 
created it, and its purpose is to finance through the issuance of bonds certain 
qualifying improvements to real property authorized by section 163.08, Florida 
Statutes, commonly referred to as the Property Assessed Clean Energy (PACE) 
Act.   
Participation in Clean Energy’s PACE Program by property owners within 
the area covered by the interlocal agreement is voluntary, and in exchange for 
receiving financing for qualifying improvements, including those related to 
renewable energy, energy efficiency and conservation, and wind resistance, 
property owners agree to the imposition of non-ad valorem assessments on the 
benefitted property.  The PACE Act requires these non-ad valorem assessments to 
be collected on the tax bill pursuant to the uniform method of collection authorized 
by section 197.3632, Florida Statutes.  See § 163.08(4), Fla. Stat.  
 
After Clean Energy’s creation, its governing board adopted a bond 
resolution authorizing the issuance of revenue bonds in an amount not to exceed 
                                          
 
 
2.  The three municipalities are the Town of Bay Harbor Islands, the Village 
of Biscayne Park, and the Town of Surfside.   
 
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$500,000,000 for the purpose of financing qualifying improvements.  Clean 
Energy then filed a complaint to validate those bonds and the non-ad valorem 
assessments securing them in the Circuit Court for Leon County, Florida, as 
specified in section 163.01(7)(d), Florida Statutes.  The circuit court issued an 
order to show cause why the bonds should not be validated, and Clean Energy 
published the order as required by law.  See § 75.06, Fla. Stat. 
 
When it filed its complaint, Clean Energy contemplated that local 
governments in both Miami-Dade and Broward Counties would join in the 
interlocal agreement and participate in Clean Energy’s PACE Program.  
Accordingly, Clean Energy named the property owners, taxpayers, and citizens of 
both Miami-Dade and Broward Counties among the defendants.  However, when 
Broward County did not adopt a resolution joining in the interlocal agreement, 
Clean Energy filed a notice of voluntary dismissal dropping the property owners, 
taxpayers, and citizens of Broward County from the case.  In light of the voluntary 
dismissal, Clean Energy argued that two residents of Broward County (Sidney 
Karabel and Christopher Trapani) who had appeared in the case and responded to 
the order to show cause, lacked standing and moved to strike their response.   
At both the initial and continued show-cause hearing, counsel for the 
Broward County residents, who also represents the only other property owner who 
appeared in the proceeding (Miami-Dade County resident Vicki Thomas), was 
 
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given the opportunity to present his clients’ arguments as to why the bonds should 
not be validated.  Counsel acknowledged that Clean Energy would eventually be 
able to validate its bonds, but raised several arguments regarding alleged errors that 
Clean Energy had made in developing its bond documents and argued those errors 
prevented the court from ruling that Clean Energy had the present authority to 
issue the bonds.   
The only argument regarding Clean Energy’s authority to issue the bonds 
raised below that is repeated in this appeal is that the bonds cannot be validated 
because the financing agreement to be signed by Clean Energy and property 
owners participating in the PACE Program purports to authorize a remedy for the 
collection of unpaid assessments that is not authorized by Florida law, namely 
judicial foreclosure.  Section 4 of the financing agreement provides: 
Section 4.  Collection of Assessment; Lien 
The Assessment, and the interest and charges thereon resulting from a 
delinquency in the payment of any installment of the Assessment, 
shall constitute a lien against the Property equal in dignity with county 
taxes and assessments, and when due shall be superior to all other 
liens, title and claims, including any mortgage, until paid.  The 
Assessment shall be paid and collected on the same bill as real 
property taxes using the uniform method of collection authorized by 
Chapter 197, Florida Statutes.  The Property Owner agrees and 
acknowledges that if any Assessment installment is not paid when 
due, the Authority [(Clean Energy)] shall have the right to seek all 
appropriate legal remedies to enforce payment and collect the 
Assessment or amounts due hereunder, including but not limited to 
foreclosure, and seek recovery of all costs, fees and expenses 
(including reasonable attorneys’ fees and costs and title search 
 
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expenses) in connection with the enforcement and foreclosure actions.  
The Property Owner acknowledges that, if bonds are sold or if the 
Authority enters into another financing relationship to finance the 
Final Improvements or an Abandonment Payment, the Authority may 
obligate itself, through a covenant with the owners of the bonds or the 
lender under such other financing relationship, to exercise its 
foreclosure rights with respect to delinquent Assessment installments 
under specified circumstances.[3] 
 
In addressing this argument, the circuit court stated that it read section 4 of 
the financing agreement to mean that “the collection [of assessments] has to be in 
accordance with Chapter 197, and that foreclosure can only be sought if it’s an 
appropriate legal remedy.”  Clean Energy conceded that judicial foreclosure is not 
currently an appropriate legal remedy and that it is limited to collecting 
assessments in accordance with chapter 197’s uniform method.  Accordingly, the 
circuit court ruled that it would include a statement in the final judgment that “the 
collection of the assessment, [a]s indicated in Section 4 of [the financing 
agreement], has to be using . . . only a method of collection authorized by Chapter 
197 of the Florida [S]tatutes, or otherwise authorized by Florida law.”  The final 
judgment includes this limitation and further provides that “[a]ny non-ad valorem 
assessments levied and imposed against affected real property must be collected 
                                          
 
 
3.  Section 17 of the financing agreement, which governs assignment of the 
agreement, also references Clean Energy’s “right to pursue judicial foreclosure of 
the Assessment lien.”   
 
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pursuant to the uniform collection method set forth in Section 197.3632, Florida 
Statutes.” 
The circuit court then ruled that the Broward County residents lacked 
standing because they had been voluntarily dismissed from the case.  Accordingly, 
the circuit court granted Clean Energy’s motion to strike their response to the order 
to show cause, and noted in the final judgment that the property owners, taxpayers, 
and citizens of Broward County had been removed from the case by a voluntary 
dismissal. 
ANALYSIS 
This Court has explained the standard of review for bond validation cases 
where the bond issuance is funded by special assessments: 
This Court performs expedited review in bond validation cases 
to “facilitate[ ] an adjudication as to the validity of bonds so as to 
provide assurance of the marketability of the bonds.”  City of Oldsmar 
v. State, 790 So. 2d 1042, 1050 (Fla. 2001).  Our review authority in 
these cases is “circumscribed in scope and purpose,” id. at 1049, and 
is generally limited to three issues:  (1) whether the public body has 
the authority to issue bonds; (2) whether the purpose of the obligation 
is legal; and (3) whether the bond issuance complies with the 
requirements of law.  See Keys Citizens for Responsible Gov’t, Inc. v. 
Fla. Keys Aqueduct Auth., 795 So. 2d 940, 944 (Fla. 2001); State v. 
Osceola County, 752 So. 2d 530, 533 (Fla. 1999).  However, where, 
as here, a bond issuance is funded by special assessments, we will 
apply an additional two-pronged test to evaluate whether those special 
assessments meet the requirements of the law.  The Court in City of 
Winter Springs v. State, 776 So. 2d 255[, 257] (Fla. 2001), explained: 
To comply with the requirements of the law, a special 
assessment funding a bond issuance must satisfy the 
 
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following two-prong test:  (1) the property burdened by 
the assessment must derive a special benefit from the 
service provided by the assessment; and (2) the 
assessment for the services must be properly apportioned 
among the properties receiving the benefit.  See Lake 
County v. Water Oak Management Corp., 695 So. 2d 
667, 668 (Fla. 1997) (citing City of Boca Raton v. State, 
595 So. 2d 25, 30 (Fla. 1992)). 
Citizens Advocating Responsible Envtl. Solutions, Inc. v. City of Marco Island, 
959 So. 2d 203, 206 (Fla. 2007). 
 
We have further explained that “[s]ubsumed within the inquiry as to whether 
the public body has the authority to issue the subject bond is the legality of the 
financing agreement upon which the bond is secured.”  State v. City of Port 
Orange, 650 So. 2d 1, 3 (Fla. 1994).    
 
In this case, the financing agreement’s references to judicial foreclosure are 
inconsistent with its requirement—and Florida law—that collection of non-ad 
valorem assessments must be accomplished pursuant to chapter 197’s uniform 
method.  See generally § 197.3632, Fla. Stat. (providing for the collection of 
assessments on the same bill as property taxes and for the issuance and sale of tax 
certificates and, ultimately, tax deeds if assessments are not paid); see also § 
163.08(4), Fla. Stat. (providing that financing costs for qualifying PACE program 
improvements “may be collected as a non-ad valorem assessment[, which] shall be 
collected pursuant to s. 197.3632”).  However, as the circuit court noted, the 
financing agreement limits Clean Energy to “appropriate legal remedies” for 
 
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collecting unpaid assessments, and as Clean Energy concedes, judicial foreclosure 
is not an appropriate legal remedy.  Moreover, the financing agreement contains a 
severability clause, which provides that “[i]f any provision of this Agreement is 
held invalid or unenforceable by any court of competent jurisdiction, such holding 
will not invalidate or render unenforceable any other provision of this Agreement.”   
Because judicial foreclosure is not an appropriate legal remedy for collecting 
the non-ad valorem assessments, we find no error in the circuit court’s decision to 
read the financing agreement in a manner that effectively severs this inappropriate 
remedy and limits Clean Energy to the appropriate legal remedy—also provided by 
the financing agreement—of collecting assessments pursuant to the uniform 
method.  See Fonte v. AT&T Wireless Servs., Inc., 903 So. 2d 1019, 1024 (Fla. 4th 
DCA 2005) (“As a general rule, contractual provisions are severable, where the 
illegal portion of the contract does not go to its essence, and, with the illegal 
portion eliminated, there remain valid legal obligations.”). 
Indeed, this Court’s precedent supports reading bond documents in a manner 
that complies with Florida law.  For example, in County of Palm Beach v. State, 
342 So. 2d 56, 58 (Fla. 1976), we reversed the trial court’s final judgment 
invalidating a bond issuance by Palm Beach County based on the trial court’s 
conclusion that, although the County’s bond resolution could have been read to 
provide for the proper use of bond proceeds for capital expenses, it could have also 
 
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been read to provide for the improper use of bond proceeds for operating expenses.  
In so holding, this Court found it important that the County had expressed its intent 
to only use the bond proceeds for proper projects.  Id.  We “accept[ed] the 
averments of the [County] Commission” and reversed, noting that “if any attempt 
is made to use bond proceeds in an improper manner an action for injunctive relief 
would lie.”  Id.; see also Gate City Garage, Inc. v. City of Jacksonville, 66 So. 2d 
653, 659 (Fla. 1953) (declining to read City’s ordinance authorizing a bond 
issuance in a manner that reserved to the City a power regarding the sale and lease 
of the benefitted property that was not authorized by law). 
While we agree with the circuit court that judicial foreclosure is not an 
appropriate remedy, we conclude that additional steps are required to implement 
the circuit court’s ruling since the financing agreement will serve as the form for 
all financing agreements between Clean Energy and the property owners who 
participate in its PACE Program.  Specifically, we remand with instructions for the 
circuit court to require Clean Energy to amend the financing agreement to remove 
all references to judicial foreclosure and to file the amended agreement in the 
circuit court following its approval by Clean Energy’s governing board.  Cf. State 
v. City of Venice, 2 So. 2d 365, 367-68 (Fla. 1941) (remanding to circuit court 
“with directions to require the amendment of the resolution and the bonds” to 
correct language regarding the pledged funds that was “too broad to be sustained” 
 
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and stating that “when the same are so amended the decree of validation . . . will 
stand affirmed”). 
Finally, we agree with the circuit court that the Broward County residents 
lack standing since Clean Energy’s voluntary dismissal of all Broward County 
property owners, taxpayers, and citizens divested them of any justiciable interest in 
the bond validation proceeding.  Rich v. State, 663 So. 2d 1321, 1324 (Fla. 1995) 
(holding that a “person interested” and therefore entitled to intervene in a bond 
validation proceeding pursuant to section 75.07, Florida Statutes, “is anyone who 
has a justiciable interest in a bond validation proceeding because he or she stands 
to gain or lose something as a direct result of the bond issuance”). 
CONCLUSION 
 
For the foregoing reasons, we affirm the circuit court’s final judgment 
validating Clean Energy’s bonds, but remand with instructions for the circuit court 
to require Clean Energy to amend the financing agreement as described herein. 
 
It is so ordered.  
LABARGA, C.J., and PARIENTE, LEWIS, QUINCE, CANADY, and PERRY, 
JJ., concur. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED.   
 
An Appeal from the Circuit Court in and for Leon County – Bond Validations  
John C. Cooper, Judge – Case No. 13-CA-3457 
 
 
 
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John Stephen Menton of Rutledge Ecenia, P.A., and James C. Dinkins of Mark G. 
Lawson, P.A., Tallahassee, Florida, 
 
 
for Appellants 
 
Edward George Guedes and Jeffrey Daniel De Carlo of Weiss Serota Helfman 
Cole & Bierman, P.L., Coral Gables, Florida, 
 
 
for Appellees