Court Opinion

ID: 4401267
Source: CourtListenerOpinion
Date Created: 2019-05-29 15:03:39.350734+00
Date Added: 2024-06-11T14:24:16.721772
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

                      CITY OF PEMBROKE PINES,
                              Appellant,

                                    v.

         CORRECTIONS CORPORATION OF AMERICA, INC.,
                    n/k/a CoreCivic, Inc.,
                         Appellee.

                             No. 4D18-3168

                             [May 29, 2019]

   Appeal of nonfinal order from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Carol-Lisa Phillips, Judge; L.T. Case No.
12-007337 (25).

  E. Bruce Johnson and Hudson C. Gill of Johnson, Anselmo, Murdoch,
Burke, Piper & Hochman, P.A., Fort Lauderdale, for appellant.

   Leonard K. Samuels, Paul S. Figg and Ashley Dillman Bruce of Berger
Singerman, LLP, Fort Lauderdale, for appellee.

GERBER, C.J.

   The City of Pembroke Pines appeals from the circuit court’s order
denying its motion to dismiss, on sovereign immunity grounds,
Corrections Corporation of America’s counterclaim seeking non-
contractual economic damages alleged in counts for declaratory judgment,
promissory estoppel, tortious interference with contract, and tortious
interference with an advantageous business relationship. The City argues
that the sovereign immunity waiver codified in section 768.28, Florida
Statutes (2012), does not apply to these four counts.

   We agree with the City. We reverse and remand for entry of a final order
dismissing these four counts on sovereign immunity grounds.

   We present this opinion in three parts:
   1. Factual background;
   2. Procedural history; and
   3. This appeal.
                        1. Factual Background

   The factual background underlying these claims was set forth in
Corrections Corporation of America, Inc. v. City of Pembroke Pines, 230 So.
3d 477 (Fla. 4th DCA 2017) (“Pembroke Pines I”):

          CCA sought sewer and water services from Pembroke Pines
      for its property located in the Town of Southwest Ranches but
      adjacent to Pembroke Pines (“the CCA site”). Pembroke Pines
      operates potable water and sewer systems that service
      properties within its boundaries, as well as some properties
      outside of those boundaries. Those services provided outside
      of the boundaries extend to a limited number of residential
      and commercial properties. Southwest Ranches does not
      have potable water or sewer systems to service its residents,
      and Pembroke Pines is the only provider in the area. The CCA
      site is surrounded by four other properties, all of which are,
      or were at one time, serviced by Pembroke Pines’ water or
      sewer systems (or both). Only one of these properties is
      actually located within the boundaries of Pembroke Pines. At
      all times relevant to this dispute, Pembroke Pines admitted
      that it had the capacity and infrastructure in place to provide
      water and sewer services to the CCA site through its systems
      that abut the site.

         In 2005, CCA and Southwest Ranches entered into an
      agreement concerning the development of a correctional
      facility on the CCA site. The agreement provided that “all
      required water, sewer and other utility services are available”
      at the CCA site. CCA was advised that while a water and
      sewer agreement with Pembroke Pines would be required, it
      was unclear whether the Pembroke Pines City Commission
      would grant those services.      However, later in 2005,
      Southwest Ranches entered into an interlocal agreement with
      Pembroke Pines regarding local roadways and other matters
      (“Roadways ILA”), in which Pembroke Pines agreed not to
      interfere with the development or operation of CCA’s jail
      facility:

            Jail Facility. [Pembroke Pines] shall not interfere
         with [CCA’s], or its successors or assigns, development
         and/or operation of the jail facility, or with [Southwest

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  Ranches]’s   Agreement       with    [CCA]    concerning
  development of same.

   In 2011, Immigration and Customs Enforcement (“ICE”)
tentatively selected the CCA site to build a new detention
facility. A few days later, Pembroke Pines and Southwest
Ranches entered into another interlocal agreement
concerning emergency medical and fire services (the “EMS
ILA”) that provided in pertinent part:

     Jail Facility: [Pembroke Pines] acknowledges that it
  has sufficient capacity to deliver emergency medical
  protection and fire prevention services to [Southwest
  Ranches]’s future 2,500 bed detention/corrections
  facility, located on property currently owned by [CCA].
  [Pembroke Pines] agrees to timely provide Broward
  County, upon request, any documentation that
  Broward County may require to acknowledge that
  Pembroke Pines has the capacity, ability, and the
  willingness to service this facility under the terms and
  conditions contained herein . . . Further, [Pembroke
  Pines] agrees that it has sufficient capacity to provide
  water and sewer service to [Southwest Ranches]’s future
  2,500 bed detention/corrections facility (approximately
  500,000 gross square feet of floor area), and that it will
  expeditiously approve a water/waste water utility
  agreement to provide such service, at [Pembroke Pines]’s
  then prevailing rate, in accordance with state
  law ([Pembroke Pines]’s rate + surcharge).

(Emphasis added). In a special meeting on June 27, 2011, the
Pembroke Pines City Commission voted on and approved the
EMS ILA in Resolution No. 3312.

   Some five months later, in December 2011, the City
Commission passed yet another affirmative motion, that one
being “to approve direction that, should CCA come forward
with a request for Pembroke Pines to provide them water and
sewer service, that the water and sewer agreement stipulate
that it would be for not more than 1,500 beds based on the
Engineer’s report” (the “December 2011 Motion”). CCA then
submitted to Pembroke Pines a proposed Water and Sewer
Installation and Service Agreement (the “W & S Agreement”)
for a 1,500–bed facility, and requested that the matter be

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      finalized at the first available City Commission meeting.
      Pursuant to the EMS ILA, the Pembroke Pines city attorney
      and the Pembroke Pines city manager agreed on the
      contractual terms with CCA and the W & S Agreement was
      then submitted to the City Commission. In an abrupt
      departure from the numerous manifestations of intent
      expressed by the Pembroke Pines City Commission over the
      previous six years, the City Commission did not vote on the W
      & S Agreement and quite to the contrary, formally adopted a
      resolution expressing its opposition to erecting the ICE
      detention center on the CCA site. In a later meeting, the City
      Commission voted to . . . terminate the EMS ILA . . . .

Id. at 478-79 (internal footnote omitted).

                          2. Procedural History

   a. Pembroke Pines I

    The City filed an action for declaratory judgment, seeking a ruling that
it was not required to provide CCA with water and sewer services or, if it
was required to provide utility services, a determination of “whether there
[were] any limitations on the obligation to provide service.” Id. at 479.
Following a trial, the circuit court entered an order determining that the
City did not have a duty to provide water and sewer services to CCA. Id.
at 479-80.

   CCA appealed, arguing that the City assumed a legally enforceable duty
to provide the CCA site with those services by expressly manifesting a
desire or intent to provide the services. Id. at 480. CCA maintained the
evidence at trial established that the City’s conduct created a duty to
provide utilities.

   We agreed with CCA in Pembroke Pines I, reasoning in pertinent part:

         As a general rule, “a municipality has no duty to supply
      services to areas outside its boundaries.” Allen’s Creek Props.,
      Inc. v. City of Clearwater, 679 So. 2d 1172, 1174 (Fla. 1996).
      In Allen’s Creek, the Florida Supreme Court recognized
      exceptions to this general rule where (1) a municipality has
      agreed to extend its services by contract, and (2) where a
      municipality has assumed a duty to provide such services
      through its conduct. Id. at 1175–76.

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   ....

   Applying Allen’s Creek to the agreements at hand, we find
direct expressions of intent to provide services to the area at
issue in the EMS ILA:

   Jail Facility: . . . [Pembroke Pines] agrees to timely
   provide Broward County, upon request, any
   documentation that Broward County may require to
   acknowledge that Pembroke Pines has the capacity,
   ability, and the willingness to service this facility . . . .
   Further, [Pembroke Pines] agrees that it has sufficient
   capacity to provide water and sewer service to
   [Southwest        Ranches]’s    future     2,500        bed
   detention/corrections facility (approximately 500,000
   gross square feet of floor area), and that it will
   expeditiously approve a water/waste water utility
   agreement to provide such service, at [Pembroke Pines]’s
   then prevailing rate, in accordance with state
   law ([Pembroke Pines]’s rate + surcharge).

(Emphasis added). By including a statement that it would
“approve a water/waste water agreement to provide such
service,” Pembroke Pines affirmatively and expressly
manifested its desire and intent to assume that duty.

    Further, although they may not constitute affirmative
expressions of intent to provide water and sewer service, other
actions of the City of Pembroke Pines indicated its willingness
to provide services to the CCA site. Pembroke Pines provided
these services to all surrounding sites. Also, knowing that it
was the only water and sewer service provider in the area,
Pembroke Pines agreed in the Roadways ILA that it “shall not
interfere with [CCA’s] . . . development and/or operation of the
jail facility.” Finally, Pembroke Pines indicated its willingness
to provide these services by the City Commission’s passage of
the December 2011 motion to direct CCA to limit its request
for water and sewer services to a 1,500-bed facility.

    . . . While the Commission did not vote on CCA’s proposed
W & S Agreement, which provided the negotiated terms and
conditions of utility services, it did vote on and approve the
EMS ILA in Resolution No. 3312, in which the City agreed that
it would approve a water/wastewater utility agreement. As a

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      consequence of the City Commission’s approval of the EMS
      ILA, CCA may have reasonably expected that Pembroke
      Pines’s agreement to provide utility services was valid and
      binding.

         ....

          Consequently, we find that the conduct exception to the
      general rule that a municipality has no duty to supply services
      to areas outside its boundaries applies in the instant case. We
      reverse the trial court’s determination to the contrary.

Id. at 480-82.

   b. The Instant Case

  While the appeal in Pembroke Pines I was occurring, ICE notified
Southwest Ranches that ICE would not build a detention center on the
CCA site. With no detention center to build, CCA sold the CCA site to
Southwest Ranches.

   CCA then filed its second amended counterclaim against the City. CCA
generally alleged that in reliance on the City’s representations that the City
would provide water and sewer service to the CCA site, CCA incurred
substantial costs, including the purchase price and carrying costs of the
CCA site, payments to Southwest Ranches under the CCA–Southwest
Ranches agreement, and payments of professional fees for development
work. CCA further alleged that the City’s ultimate refusal to provide water
and sewer service to the CCA site thwarted the development of the ICE
facility and deprived CCA of the economic viability of the CCA site.

   Based on those and other general allegations, CCA’s second amended
counterclaim specifically alleged six counts against the City, four of which
are relevant here: Count I for declaratory judgment; Count II for
promissory estoppel; Count V for tortious interference with contract; and
Count VI tortious interference with advantageous business relationship.

    In Count I, CCA alleged that because of the City’s refusal to provide
water and sewer service to the CCA site, CCA was entitled to supplemental
relief in the form of damages and costs.

  In Count II, CCA alleged that its reliance on the City’s representations
was reasonable, for which it sought damages and costs, including
damages for the purchase price and carrying costs of the CCA site,

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payments to Southwest Ranches under the CCA–Southwest Ranches
agreement, and payments of professional fees for development work.

   In Count V, CCA alleged that the City’s refusal to provide water and
sewer service to the CCA site interfered with the CCA–Southwest Ranches
Agreement to develop a correctional facility on the CCA site, for which CCA
had suffered damages, including lost profits and costs.

   In Count VI, CCA alleged that the City’s refusal to provide water and
sewer service to the CCA site interfered with CCA’s advantageous business
relationship with ICE to develop a correctional facility on the CCA site, for
which CCA had suffered damages, including lost profits and costs.

    The City moved to dismiss CCA’s second amended counterclaim. The
City argued, among other grounds, that sovereign immunity barred CCA’s
state law claims for declaratory relief, promissory estoppel, tortious
interference with contract, and tortious interference with advantageous
business relationship, because those claims sought only economic
damages not based on express contracts between the City and CCA, and
were not based on personal injury, wrongful death, or physical property
damages. According to the City, the dismissal of those four claims would
be in line with Florida cases finding that, based on sovereign immunity,
(1) property owners cannot recover for the harm caused by the decision-
making process, and (2) no state tort liability exists for allegedly wrongful
denials of development-related applications.

   The circuit court ultimately entered an order denying the City’s motion
to dismiss, expressly finding that the City “is not entitled to its defense
and assertion of sovereign immunity for the state law claims that have
been set forth in Counts I, II, [V] and VI of the Second Amended Counter-
claim (Declaratory Judgment, Promissory Estoppel, Tortuous [sic]
Interference with Contract, and Tortuous [sic] Interference with an
Advantageous Business Relationship), which requests economic
damages.”

                              3. This Appeal

   This appeal followed. The City argues that the circuit court erred in
finding, as a matter of law, that the City was not entitled to sovereign
immunity for: (1) CCA’s state law tort claims which do not seek damages
for injury or loss of property, personal injury, or death, but instead seek
damages for economic losses in the form of lost profits; and (2) CCA’s state
law declaratory judgment claim seeking supplemental relief in the form of
economic damages.

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   CCA’s answer brief raises three arguments, including sub-arguments
as specified:

   (1) the order is not reviewable under Florida Rule of Appellate Procedure
       9.130(a)(3)(C)(xi) (providing jurisdiction over nonfinal orders which
       determine that, “as a matter of law, a party is not entitled to
       sovereign immunity”), because
       (a) the City’s underlying conduct was not a discretionary function,
           which is fundamental to sovereign immunity, and
       (b) this court already concluded in Pembroke Pines I that CCA’s
           claims are based on the City’s operational decision not to perform
           its obligation to provide water and sewer service to the CCA site;
   (2) if CCA’s claims do not fall within section 768.28’s statutory waiver
       of sovereign immunity because the claims seek economic damages,
       then the City still is liable at common law for actions in its propriety
       capacity as a municipal corporation; and
   (3) section 768.28 does not distinguish between torts on the basis of
       the type of damages sought or the specific causes of action.

    The parties agree that our review is de novo. See Town of Gulf Stream
v. Palm Beach Cty., 206 So. 3d 721, 725 (Fla. 4th DCA 2016) (“The issue
of sovereign immunity is a legal issue subject to the de novo standard of
review.”).

   We conclude that the City is entitled to sovereign immunity on CCA’s
state law tort claims and state law declaratory judgment claim. We base
our conclusion on five grounds.

   First, we conclude the order is reviewable under Florida Rule of
Appellate Procedure 9.130(a)(3)(C)(xi). The rule’s plain language provides
appellate jurisdiction over nonfinal orders which determine that, “as a
matter of law, a party is not entitled to sovereign immunity,” which is
exactly the type of nonfinal order on review in this appeal.

    Second, contrary to CCA’s answer brief, the City’s underlying conduct
was discretionary in nature. Discretionary or planning level functions “are
generally interpreted to be those requiring basic policy decisions, while
operational level functions are those that implement policy.” Com. Carrier
Corp. v. Indian River Cty., 371 So. 2d 1010, 1021 (Fla. 1979). Here, the
City Commission’s ultimate adoption of a resolution opposing the
construction of an ICE detention center on the CCA site, followed by a vote
to terminate the EMS ILA, were clearly basic policy decisions made at the
City’s highest level.

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    Third, contrary to CCA’s answer brief, we did not conclude in Pembroke
Pines I that CCA’s claims are based on the City’s operational decision not
to perform on its obligation to provide water and sewer service to the CCA
site. Pembroke Pines I did not involve any determination of sovereign
immunity or, more specifically, whether the City’s ultimate decision not to
provide water and sewer service to the CCA site was discretionary or
operational in nature. Pembroke Pines I merely decided whether the
conduct exception to the general rule that a municipality has no duty to
supply services to areas outside its boundaries applied in the underlying
case. 230 So. 3d at 482. Now presented in this appeal is the question of
whether the City’s ultimate decision not to provide water and sewer service
to the CCA site was discretionary or operational in nature. As stated
above, we conclude that the decision was clearly discretionary in nature.

   Fourth, contrary to CCA’s answer brief, the City, as a municipal
corporation, is equally situated with all other constitutionally authorized
governmental entities as to when sovereign immunity applies. See Com.
Carrier, 371 So. 2d at 1016 (municipalities are “unequivocally included
within the definition of ‘state agencies or subdivisions’” as used in section
768.28); Cauley v. City of Jacksonville, 403 So. 2d 379, 385-86 (Fla. 1981)
(“We note that section 768.28 also furthers the philosophy of Florida’s
present constitution that all local governmental entities be treated equally.
. . . Municipalities can no longer be identified as partial outcasts as
opposed to other constitutionally authorized local governmental entities.”).

   Fifth, the plain language of section 768.28’s limited waiver of sovereign
immunity does not apply to CCA’s state law tort claims which are not
based on “injury or loss of property, personal injury, or death caused by
the negligent or wrongful act or omission of any employee of the agency or
subdivision while acting within the scope of the employee’s office or
employment . . . .” Section 768.28(1) states, in pertinent part:

      [T]he state, for itself and for its agencies or subdivisions,
      hereby waives sovereign immunity for liability for torts, but
      only to the extent specified in this act. Actions at law against
      the state or any of its agencies or subdivisions to recover
      damages in tort for money damages against the state or its
      agencies or subdivisions for injury or loss of property, personal
      injury, or death caused by the negligent or wrongful act or
      omission of any employee of the agency or subdivision while
      acting within the scope of the employee's office or employment
      under circumstances in which the state or such agency or
      subdivision, if a private person, would be liable to the

                                     9
      claimant, in accordance with the general laws of this state,
      may be prosecuted subject to the limitations specified in this
      act.

(emphasis added).

   Persuasive authority for our conclusion is derived from the Fifth
District’s decision in County of Brevard v. Miorelli Engineering, Inc., 677 So.
2d 32 (Fla. 5th DCA 1996), quashed on other grounds, 703 So. 2d 1049
(Fla. 1997). In Miorelli, an engineering firm contracted with Brevard
County to construct a spring training facility. Id. at 33. The firm began
developing the facility. Id. However, a dispute arose between the county
and the firm. Id. The county ultimately terminated the firm and withheld
the remaining amounts due under the contract. Id. The firm filed suit
against the county seeking to recover those withheld amounts, as well as
payment for extra work, under claims for breach of contract, quantum
meruit, fraudulent inducement, and common law fraud. Id.

   The county filed a motion for summary judgment, asserting sovereign
immunity. Id. The circuit court granted the county’s motion as to the
quantum meruit and common law fraud claims, but concluded that
sovereign immunity did not bar either the breach of contract or fraudulent
inducement claims. Id.

   On appeal, the Fifth District affirmed that portion of the circuit court’s
order denying summary judgment on the breach of contract claim, but
reversed that portion of the order denying summary judgment on the
fraudulent inducement claim. Id. at 34-35.

   On the breach of contract claim, the Fifth District found that although
no explicit legislative waiver of sovereign immunity exists for breach of
contract, our supreme court has recognized an implied waiver of sovereign
immunity exists for breach of contract. Id. at 33 (citing Pan–Am Tobacco
Corp. v. Dep’t of Corrs., 471 So. 2d 4 (Fla. 1984), for the proposition that
because the Legislature authorizes state entities to enter into contracts,
the Legislature clearly intended that such contracts be valid and binding
on both parties).

   However, on the fraudulent inducement claim, the Fifth District found
no implied waiver of sovereign immunity, reasoning, in pertinent part:

      The legislature has waived sovereign immunity in tort for
      personal injury, wrongful death, and injury or loss of property.
      See § 768.28, Fla. Stat. (1995). Fraud in the inducement

                                      10
      causing only economic loss does not fit within any of those
      categories of injury or loss enumerated in the statute. Section
      768.28 states that sovereign immunity for liability in tort is
      waived, but only to the extent specified in the statute.
      Moreover, fraud in the inducement is a tort independent of
      breach of contract. Pan–Am recognized the waiver of sovereign
      immunity to breach of contract actions, and its holding has
      not been extended to include the tort of fraudulent
      inducement causing only economic loss. Sovereign immunity
      has not been waived as to this type of tort, so the trial court
      erred in not granting the county’s motion for summary
      judgment as to that count.

Id. at 34.

    Miorelli’s reasoning applies equally here. CCA lacks an express contract
with the City, and lacks a claim for personal injury, wrongful death, or
injury or loss of property against the City. The waiver of sovereign
immunity has not been extended to include the claim upon which CCA
relies here – economic damages framed in counts for declaratory relief,
promissory estoppel, tortious interference with contract, and tortious
interference with advantageous business relationship. Thus, the circuit
court erred in denying the City’s motion to dismiss those counts on
sovereign immunity grounds.

    This conclusion is not only consistent with Miorelli, but with other cases
applying sovereign immunity to bar recovery of economic damages against
a municipality for the denial of a development application. See Akin v. City
of Miami, 65 So. 2d 54, 55-56 (Fla. 1953) (the granting or withholding of a
building permit by a municipality exercises a purely governmental
function, and thus the municipality could not be held liable in a tort action
for damages for the wrongful refusal to issue such a permit); Paedae v.
Escambia Cty., 709 So. 2d 575, 578 (Fla. 1st DCA 1998) (county’s
interpretation of its comprehensive plan and refusal to issue a permit
based on that interpretation is a governmental function which is protected
by sovereign immunity); City of Cape Coral v. Landahl, Brown & Weed
Assocs., Inc., 470 So. 2d 25, 27 (Fla. 2d DCA 1985) (no cause of action
exists for the manner in which a municipality exercises its governmental
function of issuing or refusing to issue permits, thus those actions are
immune from an action for damages); City of Live Oak v. Arnold, 468 So.
2d 410, 412 (Fla. 1st DCA 1985) (“[I]nsofar as the city’s defense of
sovereign immunity is focused on its actions in denying issuance of the
permit based upon its reading of its own code of ordinances, the defense
is viable.”).

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                               Conclusion

   Based on the foregoing, we reverse and remand for entry of a final order
dismissing, on sovereign immunity grounds, Count I for declaratory
judgment, Count II for promissory estoppel, Count V for tortious
interference with contract, and Count VI tortious interference with
advantageous business relationship.

   Reversed and remanded.

CONNER, J., and METZGER, ELIZABETH, Associate Judge, concur.

                           *         *        *

   Not final until disposition of timely filed motion for rehearing.

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