MITCHELL V. HIGGS & DEPT. OF REVENUE
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Third District Court of Appeal
State of Florida, January Term, A.D. 2011
Opinion filed April 13, 2011.
Not final until disposition of timely filed motion for rehearing.
________________
Nos. 3D10-979 and 3D09-1924
Lower Tribunal No. 08-110-K
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Paul Mitchell,
Appellant,
vs.
Ervin Higgs, as Property Appraiser of
Monroe County, Florida, and
Lisa Echeverri, as Executive Director of the
Florida Department of Revenue,
Appellees.
Appeals from the Circuit Court for Monroe County, Luis M. Garcia, Judge.
Wayne LaRue Smith and Christian J. Cruz (Key West), for appellant.
Dent & Johnson, and Sherri L. Johnson (Sarasota), for appellee Ervin Higgs,
Joseph C. Mellichamp, III (Tallahassee), Chief Assistant Attorney General, for the
Department of Revenue.
Before GERSTEN, WELLS, and SALTER, JJ.
SALTER, J.
These are two consolidated appeals from Monroe County Circuit Court
judgments regarding Paul Mitchell’s entitlement to homestead property tax
exemptions for 1999 through 2006 (our Case No. 3D09-1924) and for 2007 (our
Case No. 3D10-979). We reverse a final summary judgment in Mitchell’s favor
reinstating his homestead exemption for tax years 1999 through 2006 and remand
it for further proceedings. We affirm the final judgment after trial regarding the
revocation of the exemption for tax year 2007.
Background
Mitchell’s family has owned the Key West residential property at the center
of these cases since 1928. In 1991, Mitchell moved to the property. He applied
for, and was granted, the property tax homestead exemption for the residence in
1996.
In 1999, Mitchell bought property on Sugarloaf Key, about 18 miles away
from the Key West residence. In 2005, in an effort to help family members,
Mitchell changed his Florida driver’s license and voter’s registration to the
Sugarloaf Key address.1 On the change of address card for voter registration,
Mitchell listed his Key West residence as the “address of homestead exemption
property.” In 2007, Mitchell changed his driver’s license and voter registration
1
The trial testimony established that Mitchell and his wife hoped to register two
minor children of a relative in the school on Sugarloaf Key, and to provide a more
suitable atmosphere for those children than in the “honky-tonk atmosphere of bars
and other adult oriented establishments” near Mitchell’s Key West residence. To
facilitate that, he followed advice that he should change the address on his driver’s
license and voter’s registration card to the address of his Sugarloaf Key home.
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addresses back to that of the Key West residence.
In mid-2007, the Monroe County property appraiser received an anonymous
complaint that the Key West property was vacant and the property had been
receiving the homestead exemption. Upon investigation of the properties, the
public records, utility bills, and other information, the appraiser notified Mitchell
that the homestead exemption was revoked for 2007. A later notice advised
Mitchell that the appraiser had determined that Mitchell was not entitled to the
homestead exemption for any of the years 1999 (the year he bought the Sugarloaf
residence) through 2006. In 2008, Mitchell filed a lawsuit seeking a declaratory
judgment that he was entitled to the homestead exemption for tax years 1999
through 2007. The lawsuit also sought the removal of a tax lien filed against him
by the appraiser under section 196.161, Florida Statutes (2006), for the unpaid
property tax, penalties, and interest (totaling approximately $28,000) over the eight
years, 1999 through 2006.
The trial court granted a final summary judgment in favor of Mitchell as to
those eight years, and revoked the recorded tax lien as sought in the complaint.
After a non-jury trial, the court concluded that the appraiser had proven that
Mitchell was not entitled to the homestead exemption on the Key West property
for tax year 2007. These appeals followed.
Analysis—2007 Tax Year (Case No. 3D10-979)
The intention to establish a permanent residence in Florida “is a factual
3
determination to be made, in the first instance, by the property appraiser.”2 The
property appraiser determined, after a diligent investigation, that the residence on
Sugarloaf Key was Mitchell’s primary and permanent residence as of January 1,
2007, such that Mitchell was not eligible for the homestead exemption for 2007.
At trial, the court heard evidence regarding the Mitchells’ occupancy and
use of the Sugarloaf Key property, the indicia of vacancy and low utility usage at
the Key West address, intention as expressed in the driver’s license and voter
registration records, and other objective criteria. The court applied the correct law
and entered extensive findings of fact. As the findings are based on substantial and
competent evidence, we affirm the final judgment regarding Mitchell’s lack of
qualification for the homestead exemption on the Key West property for 2007.
CFI Sales & Mktg, Ltd. v. Florida Marlins Baseball, Ltd., 837 So. 2d 423 (Fla. 3d
DCA 2002).
Analysis—1999-2006 Tax Years (Case No. 3D09-1924)
The trial court entered a final summary judgment in favor of Mitchell
regarding the property appraiser’s revocation of Mitchell’s homestead exemption
for years 1999 through 2006.
“[Mitchell’s]
claim
that
The final summary judgment did not address
sections
196.011,
196.161,
and
193.155
are
unconstitutional,” though Mitchell has attempted to renew that argument here.
2
§ 196.015, Fla. Stat. (2007).
4
Rather, the final summary judgment concluded that the appraiser’s revocation of
the homestead exemption is a “change in judgment” that may not be retroactively
applied following the close of a tax year, relying principally on Underhill v.
Edwards, 400 So. 2d 129 (Fla. 5th DCA 1981), and Korash v. Mills, 263 So. 2d
579 (Fla. 1972).
Korash distinguished a permissible basis for a “back assessment” by the
property appraiser (the erroneous omission of an oceanfront motel from taxation
altogether) from an impermissible basis (a “change in judgment” such as a change
in valuation after the certification of the tax roll for the year). Underhill applied
this principle to the retroactive denial of an exemption from property tax:
The determination that a parcel of property is exempt is as much a
part of the assessment process as is the determination of its taxable
value, and the judgment of the assessor must be applied in reaching
that conclusion. We hold, therefore, that a determination in 1977 that
the property should not have been exempted in 1976 is a change in
judgment and is prohibited under the cited cases.
Underhill, 400 So. 2d at 132.
The exemption at issue in Underhill was a charitable-use exemption, not the
homestead property tax exemption.
Retroactive revocation of the homestead
exemption (for up to ten prior years) is the subject of an express legislative
enactment, section 196.161, and that provision is not subject to the “change in
judgment” rule. Were it otherwise, section 196.161 could never be given effect for
any prior year, much less ten prior years, after a tax roll has been certified.
5
The legislature has imposed a series of requirements for eligibility for the
homestead tax exemption and a mechanism for recovering the tax savings (plus
interest and a penalty) realized by a property owner not actually entitled to claim
the exemption.
The constitutionality of such a mechanism (as applied) was
thoroughly addressed in Haddock v. Zingale, 1 So. 3d 1133 (Fla. 1st DCA 2009).
In that case, a property owner claimed and received the homestead tax exemption
for a condominium that was subject to a rental program. Under section 196.061,
Florida Statutes (2005), the rental of an entire dwelling claimed to be a homestead
“shall constitute the abandonment of said dwelling as a homestead.” On that basis,
the property tax appraiser notified the owner that the exemptions for three prior
years were revoked.
The
First
District
reversed
the
trial
court’s
determination
of
unconstitutionality as applied, holding that the Florida Constitution expressly
conditions eligibility for the exemption “upon establishment of the right in
accordance with the manner prescribed by law.” Id. at 1136 (citation omitted).
The court noted at the outset that “statutes involving tax exemptions are strictly
construed against the taxpayer.” Id. at 1137. For the same reasons, we find
section 196.161 constitutional and enforceable as applied in this case.3
3
Mitchell’s “Tipsy Coachman” and due process arguments are also unavailing.
The Tipsy Coachman doctrine does not apply to grounds not raised in a motion for
summary judgment, and the circuit court afforded Mitchell a de novo opportunity
to seek a remedy and to be heard.
6
That said, the trial court correctly observed that the revocation statute seems
unfair: (a) it is not reciprocal, and (b) Mitchell is thus unable to receive the benefit
of an exemption (the homestead tax exemption on the Sugarloaf Key property) to
which he concededly would have been entitled had he not claimed the exemption
on the Key West home.4 This is so because a taxpayer is barred by sections
194.171(2) and (6), Florida Statutes (2010), from claiming the homestead tax
exemption for prior years sixty days after certification of the tax roll or rendition of
a value adjustment board decision. If a property owner inadvertently fails to claim
a homestead tax exemption for prior years for which he or she is demonstrably
entitled to claim the exemption, after that deadline the property owner has no
remedy. But if the property appraiser delays in contesting a claim of exemption,
there is no equivalent bar. The property appraiser has a ten-year clawback right
even after the sixty-day deadline has elapsed.
Nowhere is it written, however, that the legislature must enact reciprocal
rules as they relate to exemptions. The remedy for the lack of reciprocity lies with
4
However, one benefit of keeping the homestead exemption on the Key West
home (rather than claiming it on the Sugarloaf Key residence) is in the record. The
“Save Our Homes” assessed value cap, Art. VII, § 4(d)(1), Fla. Const., provided a
greater value differential and savings on the Key West home. The cautionary
lessons in this case are that (1) a property tax savings is not a factor affecting
“intention to establish a permanent residence” under section 196.015, and (2) if the
assessor prevails in a proceeding to revoke the exemption for past years, the
property tax exemption cannot then be claimed retroactively for a different Florida
residence that actually may have been the taxpayer’s primary residence during
those prior years.
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the legislature, not the courts. For these reasons, the final summary judgment in
favor of Mitchell for tax years 1999-2006 is reversed, and the case is remanded to
the trial court for fact-finding regarding Mitchell’s eligibility for the exemption
during those years.
Conclusion
In Case No. 3D10-979, the final judgment in favor of the Monroe County
property appraiser and director of the Florida Department of Revenue regarding
tax year 2007 is affirmed. In Case No. 3D09-1924, the summary final judgment in
favor of Mr. Mitchell regarding tax years 1999 through 2006 is reversed and
remanded to the trial court for further proceedings consistent with this opinion.
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