FIRST DISTRICT COURT OF APPEAL

STATE OF FLORIDA

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No. 1D18-3601

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PIPELINE CONTRACTORS, INC., a 

Florida corporation, and THE 

HANOVER INSURANCE COMPANY,

a New Hampshire corporation,

Appellants,

v.

KEYSTONE AIRPARK AUTHORITY,

a political subdivision of the City 

of Keystone Heights, and

PASSERO ASSOCIATES, L.L.C., a 

Florida limited liability 

company,

Appellees.

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On appeal from the Circuit Court for Clay County.

Don H. Lester, Judge.

July 10, 2019

PER CURIAM.

Pipeline Contractors, Inc., (Pipeline) and The Hanover 

Insurance Company (Hanover) challenge the trial court’s 

determination that Keystone Airpark Authority (KAA) had 

capacity to contract, to sue, and to be sued. We agree with the trial 
2

court that estoppel applies to preclude this argument and affirm

the final judgment in favor of KAA.

In 2008, Pipeline and KAA entered into a contract for the 

construction of new airport facilities at the Keystone Airpark. 

Pipeline’s performance was guaranteed by a bond issued by 

Hanover. KAA did not pay everything that Pipeline asserted it 

was entitled to under the construction contract, and in 2010, 

Pipeline sued KAA for breach of contract. KAA counterclaimed for 

breach of contract based on defects in the work, and KAA filed a 

third-party complaint against Hanover seeking relief under the 

performance bond.

Little happened in the litigation for some six years. Then

Pipeline and Hanover amended their answer and moved for 

summary judgment on KAA’s claims, asserting for the first time 

that KAA’s lawsuit should be dismissed because KAA was not a 

legal entity and did not have the capacity to contract, sue, or be 

sued. In short, the argument was that under the Uniform Special 

District Accountability Act of 1989 (Chapter 189, Fla. Stat. (1991)), 

any special district comprising more than one county required the 

Legislature’s authorization. All of the KAA district was within the 

city limits of Keystone Heights, but the KAA district extended from 

Clay County west into Bradford County.1 Nonetheless, when the 

KAA was formed in 1991, only the City of Keystone Heights, and 

not the Legislature, acted in establishing it. 

 1 This geographic peculiarity is the result of history. The 

airport was originally part of Camp Blanding when it was 

constructed during World War II. See The 42J Story, 

http://keystoneairport.com/the-42j-story/ (last visited July 2, 

2019). In 1947, the airport property was acquired from the federal 

government. Id. In 1963, the Town of Keystone Heights was 

abolished, and the City of Keystone Heights established in its 

place. Ch. 63-1496, Art. I, Laws of Florida at 1698-1700. Title to 

the airport property remained vested in the City of Keystone 

Heights, and the City was given “all powers and duties, including 

police powers” over the property “as are exercised over those lands 

included in the corporate limits of the City.” Ch. 63-1496, Art. XII, 

Laws of Florida at 1736-37. 
3

In 1992, the Legislature amended the law to provide that 

legislative approval is not required for special districts comprising 

more than one county, so long as the entire district is within a 

single municipality. See § 189.403(3), Fla. Stat. (1992); cf. Forsythe 

v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455-

56 (Fla. 1992) (holding that the pre-amendment version’s plain 

text provided that a special district with territory in multiple 

counties was an independent special district requiring legislative 

authorization). Pipeline and Hanover contended that the 

legislative change did not cure the defect in KAA’s earlier 

formation.2

The trial court rejected the lack of capacity defense, 

concluding that the court could deny Pipeline and Hanover’s 

summary judgment motion without resolving whether KAA was 

validly created or whether it later had the right to contract, sue, or 

be sued. Instead, the court decided, because there was “no 

question that Pipeline and Hanover [had] received the benefits of 

the questioned contracts,” Pipeline and Hanover were estopped 

from “challenging KAA’s capacity to contract.” After a seven-day 

bench trial, the trial court entered a final judgment in favor of 

KAA.3

Pipeline and Hanover now appeal the trial court’s denial of 

summary judgment. Arguing that the trial court’s application of 

 2 Pipeline and Hanover acknowledge that if KAA lacks 

authority to contract, sue, or be sued, then Pipeline itself had no 

ability to initiate this litigation years ago, that it had no right to 

enforce its contract, and that Pipeline’s claims—like KAA’s—were 

due to be dismissed. Pipeline also argues that its entitlement to 

retain the hundreds of thousands of dollars received under the 

contract is not before this court.

3 The detailed thirty-four-page final judgment resolved the 

dispute about construction defects and Pipeline’s performance. 

The court ultimately awarded KAA a total of $3,217,661.81. 

Pipeline and Hanover do not contest the court’s findings or the 

amount of the award. The only issue on appeal is whether the 

court should have denied all relief based on KAA’s inability to 

contract, sue, or be sued. 
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estoppel was in error, Pipeline and Hanover contend that the court 

should have reached the merits of their argument regarding KAA’s 

capacity and ruled in their favor. Pipeline and Hanover ask us to 

reverse the trial court on the issue of estoppel and remand the case 

with directions to vacate the final judgment and dismiss all claims 

between the parties.

The trial court relied on Booske v. Gulf Ice Co., 5 So. 247 (Fla. 

1888), in determining that estoppel applied. At issue in Booske

was a contract between individuals and a corporation. Id. at 248. 

There was also a surety bond guaranteeing performance. Id. After 

litigation ensued, the principal and obligor on the bond cited Gulf 

Ice Company’s improper corporate creation in arguing that they 

should be immune from liability on the contract. Id. at 250-51. In 

rejecting this argument, the Florida Supreme Court held:

A person who has contracted with an association 

assuming to be incorporated and acting in a corporate 

capacity cannot, after having received the benefit of the 

contract, set up as a defense to an action brought by such 

company that the latter was not legally incorporated, or 

had no authority to enter into the contract in a corporate 

capacity.

Id. at 251.

Pipeline and Hanover argue that Booske and the principle 

underlying it is not applicable here because KAA purported to be 

a governmental special district, and the entities at issue in Booske

and other cases were business corporations. Our review thus turns 

on whether a contract between private entities and a political 

subdivision under these circumstances is subject to the same 

estoppel principles.

Estoppel is an equitable doctrine “based on principles of fair 

play and essential justice and arises when one party lulls another 

party into a disadvantageous legal position.” Florida Dep’t of 

Health & Rehab. Servs. v. S.A.P., 835 So. 2d 1091, 1096 (Fla. 2002). 

“‘Estoppel’ has been defined as ‘the preclusion of a person from 

asserting a fact by previous conduct inconsistent therewith, on his 

own part, or the part of those under whom he claims.’” Quality 
5

Shell Homes & Supply Co. v. Roley, 186 So. 2d 837, 840-41 (Fla. 

1st DCA 1966) (quoting Coogler v. Rogers, 7 So. 391 (Fla. 1889)).

Pipeline and Hanover argue that KAA’s improper 

organization as a political subdivision is the fact that makes 

estoppel inapplicable here, but we see no meaningful distinction. 

Just as estoppel can defeat a claim that a purported corporation 

was not validly created, so too can estoppel defeat a claim that a 

purported local special district was not validly created. In either

instance, the principle is that one cannot contract with an entity 

as if it were validly created, reap the benefits of that agreement, 

and later disavow the contract based on the invalid creation. In 

fact, the doctrine has previously been applied to the benefit of 

political subdivisions in contract disputes. See Billings v. City of 

Orlando, 287 So. 2d 316, 318 (Fla. 1973) (estopping an argument 

by former police officers of the City that certain provisions of a 

contract were unconstitutional while noting that “[o]ne who 

accepts the benefits of a contract cannot, having retained these 

benefits, question the validity of the contract”). 

Here, Pipeline and Hanover treated KAA as if it were a 

properly organized entity with no issues of capacity for most of the 

parties’ relationship. Pipeline performed (at least in part),

accepted payment on the contract, and engaged in years-long 

litigation with KAA. Only after all that did Pipeline and Hanover 

assert any issues of capacity. Because they accepted the benefits 

of the contract through payment from KAA, Pipeline and Hanover 

were properly estopped from raising the argument that the 

contract was void in an attempt to avoid the burdens of the 

contract embodied by KAA’s claims against them.

AFFIRMED.

RAY, C.J., and WETHERELL and BILBREY,4 JJ., concur.

 4 Judge Bilbrey was substituted for an original panel member 

in this proceeding after oral argument. He has viewed the digital 

recording of oral argument. 
6

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Not final until disposition of any timely and 

authorized motion under Fla. R. App. P. 9.330 or 

9.331.

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David L. Worthy, Donald A. Niesen, and Christopher W. Lewis of 

Niesen, Price, Worthy, Campo, P.A., Gainesville, for Appellants.

James J. Taylor Jr. and Katelyn T. Hardwick of the Taylor Law 

Firm, P.A., Keystone Heights, for Appellees.