& SC14-1618 Florida Bankers Association v. Florida Development Finance Corporation, etc. & Robert Reynolds v. Florida Development Finance Corporation, etc.

Supreme Court of Florida
____________

No. SC14-1603
____________

FLORIDA BANKERS ASSOCIATION, etc.,
Appellant,

vs.

FLORIDA DEVELOPMENT FINANCE CORPORATION, etc., et al.,
Appellees.

____________

No. SC14-1618
____________

ROBERT REYNOLDS,
Appellant,

vs.

FLORIDA DEVELOPMENT FINANCE CORPORATION, etc., et al.,
Appellees.

[October 15, 2015]

LABARGA, C.J.

In these consolidated cases, the Florida Bankers Association (FBA) and

Robert Reynolds appeal the judgment of the Circuit Court of the Second Judicial

Circuit, in and for Leon County, validating bonds proposed to be issued by the
Florida Development Finance Corporation (FDFC), a public body corporate and

politic in the State of Florida. We have jurisdiction. See art. V, § 3(b)(2), Fla.

Const. The purpose of the bonds is to finance qualifying improvements pursuant

to the Property Assessed Clean Energy Act (PACE Act), established by the

Legislature in section 163.08, Florida Statutes (2014).1

The PACE Act provides for issuance of bonds to finance the retrofitting of

existing improved properties with qualifying improvements for energy

conservation, renewable energy, clean energy, and hurricane protection. Under the

program, FDFC and participating local governments enter into interlocal

agreements that will provide the PACE program benefits in those localities.

Participation in the program by local governments and by property owners is

completely voluntary. Participating property owners enter into financing

agreements to provide for repayment of the cost of the improvements by way of

voluntary non-ad valorem assessments imposed upon the benefitted property. As

we explain below, we affirm the amended final judgment of the circuit court, but

1. Although section 163.08, Florida Statutes, does not use the terms
“PACE” or “Property Assessed Clean Energy,” these terms are commonly used to
refer to programs providing for retrofitting improved properties with energy and
wind protection improvements, such as Florida’s program. See FHFA Statement
on Certain Energy Retrofit Loan Programs, Federal Housing Finance Agency,
July 6, 2010; see also Victor M. Hanna, Stop, Think, Build, Repeat: Using
Behavioral Economics to Better Design Energy Efficiency Policies for Our Cities’
Buildings, 69 (U. of Miami L. Rev.) 241, 283 (2014).

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remand with directions to the circuit court to require FDFC to amend and approve

the amended bond documents and submit the amended documents to the circuit

court as directed herein. We turn first to discuss the appeal by FBA.

I. FLORIDA BANKERS ASSOCIATION

Appellant FBA, an association of Florida banks, did not intervene or appear

in the circuit court proceedings below. Only after the circuit court entered its

amended final judgment on July 18, 2014, did FBA file an appeal, arguing that the

PACE Act is an unconstitutional impairment of contracts. FDFC has challenged

the standing of FBA to appear in this appeal. To support its claim of standing

notwithstanding its failure to appear in the bond validation proceeding below, FBA

relies on Meyers v. City of St. Cloud, 78 So. 2d 402 (Fla. 1955), in which this

Court allowed citizens, taxpayers, and property owners who had not appeared in

the trial court to appear for the first time on appeal in a bond validation proceeding.

Id. at 404.

We recently receded from Meyers in Reynolds v. Leon County Energy

Improvement District, SC14-710, slip op. at 4 (Fla. Oct. 1, 2015), because its

reasoning was not in accord with the statutory scheme governing bond validation

proceedings. However, even our decision in Meyers would not have conferred

standing upon FBA. Meyers “dealt with the right of property owners and

taxpayers.” Rich v. State, 663 So. 2d 1321, 1324 (Fla. 1995). As FDFC correctly

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argues, FBA has never shown that it is a citizen, taxpayer, or property owner in

any jurisdiction where the FDFC bonds will support PACE improvements.

Moreover, FBA presented no evidence that it suffered any specific injury or has a

stake in the matter sufficient for standing. That showing had to occur in the circuit

court. Accordingly, the appeal brought by FBA is dismissed. We turn next to the

claims of Robert Reynolds in this appeal.

II. REYNOLDS’ CLAIMS

Appellant Reynolds, a property owner in Leon County, appeared in the

circuit court and raised several objections to the bond validation proceeding. In

this appeal, he raises three claims which he contends require reversal of the

amended final judgment of validation entered by the circuit court. Reynolds

contends in his first claim that the circuit court erred in allowing an amended

financing agreement to be submitted by FDFC, and that the matter was not ripe for

determination. Second, he contends that the judgment must be reversed because

some of the bond documents approved by FDFC and submitted with the complaint

for validation refer to judicial foreclosure as a remedy in violation of the PACE

Act. Third, he contends that the judgment must be reversed because some of the

bond documents would authorize FDFC to levy the special non-ad valorem

assessments when those assessments should be levied by the participating local

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government, and because there is no executed interlocal agreement in place calling

for that procedure, the bond validation should have been denied.

Before discussing Reynolds’ claims in detail, we set forth the facts and

procedural background against which Reynolds filed his objections to the bond

validation and the standard of review in this appeal. We then discuss each of

Reynolds’ claims in turn.

III. FACTUAL AND PROCEDURAL BACKGROUND

FDFC is a corporate and political entity created by the Florida Development

Finance Corporation Act of 1993 initially to engage in activities conducive to

economic development in Florida. See § 288.9604, Fla. Stat. (1993);

§ 288.9604(1), Fla. Stat. (2010). In addition to activities enhancing economic

development, FDFC has express statutory authority to issue bonds for programs

authorized under the PACE Act, as set forth in section 163.08, Florida Statutes

(2014). See § 288.9606(7)(c), Fla. Stat. (2014). On February 27, 2014, the FDFC

filed its complaint in the circuit court of the Second Judicial Circuit in Leon

County seeking to determine the validity of a series of bonds proposed to be issued

under the PACE Act. The bond funds are to be used to pay for qualifying

improvements under section 163.08, Florida Statutes, which improvements are

carried out by approved private contractors. The repayment obligations for the

bonds are tied to the properties and not to the individuals, and repayment is

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collected through voluntary special non-ad valorem assessments placed on the

property. The special non-ad valorem assessments are to be collected by the tax

collector, similar to the method for collecting taxes and other non-ad valorem

assessments.

The Complaint sought validation of bonds not exceeding $2 billion in

aggregate principal at any one time of “Florida Development Corporation Special

Assessment Revenue Bonds (Florida HERO Program), in various series.”2 The

bond validation complaint also sought determination of the validity of the pledge

of revenues for the repayment of the bonds, the validity of the non-ad valorem

assessments that would constitute all or part of the revenues pledged, the lien

priority of the assessments, and other proceedings related to the issuance of bonds.

Attached to the complaint was a master bond resolution approved by the governing

board of FDFC, a form master indenture agreement, a list of local governments

that have executed prior but unrelated interlocal agreements with FDFC, a form

interlocal agreement for this PACE Act bond issue, and a form financing

2. “HERO” stands for “Home Energy Renovation Opportunity.” See Smart
Growth and Green Buildings, 2012 ABA Environment, Energy, and Resources
Law: The Year in Review 371, 375 (noting that a Home Energy Renovation
Opportunity program “provides low-cost financing to homeowners” for
retrofitting).

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agreement to be executed by the property owners for the PACE improvements and

assessments.

The master bond resolution states that FDFC’s HERO Program bonds shall

serve the public purposes described in the Florida PACE Act, section 163.08(1),

Florida Statutes, and promote economic development in the state, thereby

benefitting the citizens. The resolution further states that the proceeds of the bonds

shall be used for purposes of funding qualifying improvements pursuant to the

PACE Act, as well as capitalized interest, costs of issuance, fund reserves,

administrative expenses, and recurring costs relating to the program and the

issuance of the bonds.

A. Reynolds’ Response to the Bond Validation Complaint

An order to show cause was issued by the circuit court and published as

required by section 75.06, Florida Statutes (2014). The order directed the State

Attorneys of any circuit in which an interlocal agreement had been entered, as well

as taxpayers, property owners and citizens of Leon County, and any other persons

having or claiming an interest in the bonds to appear at a hearing on June 11, 2014,

to show cause why the validation judgment should not be granted. Reynolds filed

a response to the order to show cause alleging that he is a property owner in Leon

County, Florida, and thus a party-defendant to the action who may intervene

pursuant to section 75.07, Florida Statutes (2014).

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 Reynolds further alleged that although chapter 288, Florida Statutes, which

created FDFC as a public instrumentality, provides certain enumerated powers to

FDFC which relate to bond financing for PACE programs, the statute does not

provide FDFC with the power to levy non-ad valorem assessments on real

property, and that only local governments possess the power to impose such

assessments. He further contended that a local government cannot delegate to

FDFC the power to assess real property. The impetus for this objection was the

fact that the model financing agreement attached to the complaint, as well as

certain other bond documents, provided that the local government will delegate to

FDFC the right to impose the non-ad valorem assessments on the real property that

is improved with PACE improvements.

As a second objection to the validation, Reynolds claimed in his response to

the order to show cause that the assessment scheme in the bond documents

includes an unlawful remedy, in that the financing agreement includes language

allowing for judicial foreclosure as a remedy for nonpayment of the special non-ad

valorem assessments. Section 163.08, Florida Statutes, under which FDFC seeks

to pledge the assessments for repayment, sets forth specific requirements for

collection of assessments limited to the “uniform method” of collection in section

197.3632, Florida Statutes. That statute prescribes a method for collection of non-

ad valorem assessments on the same bill as taxes and in the same manner in which

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delinquent taxes are collected, and does not allow for the assessment to be

collected through a judicial foreclosure action.

B. The Bond Validation Hearing

A show cause hearing was held on the bond validation complaint of FDFC

in the circuit court of the Second Judicial Circuit on the date set forth in the order

to show cause. FDFC presented FDFC Executive Director William Spivey, who

explained that FDFC is governed by a five-member board of directors appointed

by the Governor. Spivey identified a form interlocal agreement and explained that

FDFC has authority under section 288.9605(2), Florida Statutes (2014), to enter

into such interlocal agreements and that it would be the local government and not

FDFC that would impose the non-ad valorem assessments on the property

improved under the PACE program. At the show cause hearing, counsel for FDFC

also stipulated that FDFC does not have authority to—and does not intend to—

impose the non-ad valorem assessments. However, no amended documents were

submitted reflecting this fact.

Spivey also identified a form financing agreement, which he explained

differed from the form financing agreement approved by the FDFC board and

attached to the complaint. The amended form financing agreement had been

modified to provide that the assessments would be collected in conformity with the

“uniform method” for the levy, collection, and enforcement of non-ad valorem

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assessments under chapter 197, Florida Statutes, as the PACE Act itself requires.

The modification removed reference to the remedy of judicial foreclosure from

section 4 of the agreement, and Spivey testified that FDFC is “willing to use” this

modified language in the financing agreements to be entered into during

implementation of the program under this bond issue. Reynolds’ attorney did not

object to admission of this document or testimony, but asked only to be allowed to

inquire into the document on cross-examination.

Even though an amended form financing agreement was submitted with a

change to section 4, Spivey agreed that section 14 of the amended financing

agreement continued to refer to judicial foreclosure by stating that no action by the

property owner will be competent “to impair in any way FDFC’s rights, including,

but not limited to, the right to pursue judicial foreclosure of the Assessment lien or

the right to enforce the collection of the Assessment or any installment thereof

against the property.” When questioned about this language in section 14, Spivey

testified that “we need to take that out as well, because we are going to do it per the

uniform collection.” He stated, “If there [are] any other changes in here that need

to be made to make that clear, then we can certainly make that since it is the form

of the document itself.” Spivey also explained that the FDFC board had not

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formally adopted the modified financing agreement form, and that “the exhibits to

that master bond resolution will have to come back to the board for final approval.”

The circuit court judge announced at the conclusion of the show cause

hearing that he would grant the relief requested in the complaint and validate the

bonds “under the proviso that assessment collection has to be in accordance with

law, which as I understand it, Chapter 197, and that there be no statement in the

documents that can be interpreted to mean that the Plaintiff can impose

assessments.” In addition, the court ruled that Reynolds would be granted

intervenor status.

On June 16, 2014, the circuit court issued a final judgment in the case

validating the PACE bonds. In the judgment, the court found that FDFC may

finance “qualifying improvements” under the PACE Act, which shall serve a

public purpose. The final judgment further stated that “[t]he form of the Financing

Agreement, as modified to clarify that the Program Special Assessments shall be

collected through the Uniform Collection method, was introduced into evidence as

Exhibit ‘5.’ ” Section Twenty-One of the final judgment reiterated that the

assessments must be collected pursuant to the “Uniform Collection method as set

forth in Sections 197.3632 and 197.3635, Florida Statutes,” and will be collected

annually on the same bill as property taxes.

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 As to the authority for imposition of assessments, the final judgment stated,

“The imposition of the Program Special Assessments shall be pursuant to the

authority of the local governments that are parties to the Interlocal Agreements”

and that FDFC “is authorized pursuant to the Interlocal Agreement to perform such

administrative and procedural acts as may be agreed to between the parties to assist

in [ ] facilitating the imposition of the Program Special Assessments.”

C. Motion for Rehearing and Amended Final Judgment

Reynolds filed a motion for rehearing alleging that the final judgment did

not comport with the judge’s rulings at the hearing in which the judge indicated

that the bonds would be validated if the supporting documentation reflected that

FDFC had no authority to impose non-ad valorem assessments, and that any such

assessments must be imposed by the local government that is the party to the

interlocal agreement. The motion for rehearing also alleged for the first time that

the circuit court’s admission of the amended financing agreement at the show

cause hearing violated due process. Finally, the motion alleged that the circuit

court lacked jurisdiction to validate the bonds because FDFC has not yet entered

into any interlocal agreements with entities that have the power to impose

assessments. Thus, the motion alleged, the complaint sought nothing more than an

advisory opinion on an issue that is unripe for review.

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 A hearing on the motion for rehearing was held on July 15, 2014, after

which the circuit court entered an amended final judgment. As to Reynolds’

objection that the final judgment did not make clear that it would be the local

government and not FDFC that has the power to, and will, impose the assessments,

the circuit court concluded that the language in Section 28 of the original final

judgment made that clear when it said, “The imposition of the Program Special

Assessments shall be pursuant to the authority of the local governments that are

parties to the Interlocal Agreements.” With this background in mind, we set forth

the standard of review in this bond validation appeal.

IV. ANALYSIS

Our review of this bond validation proceeding is limited to three issues:

(1) whether the public body has authority to issue the subject bonds; (2) whether

the purpose of the obligation is legal; and (3) whether bond issuance complies with

the requirements of law. See, e.g., Strand v. Escambia Cnty., 992 So. 2d 150, 154

(Fla. 2008) (citing City of Gainesville v. State, 863 So. 2d 138, 143 (Fla. 2003)).

We remain mindful that the circuit court’s order comes to the Court with a

presumption of correctness and, thus, “[t]he appellant has the burden of

demonstrating that the record and evidence [fail] to support the [bond issuer] and

the trial court’s conclusions.” Donovan v. Okaloosa Cnty., 82 So. 3d 801, 805

(Fla. 2012) (quoting State v. Osceola Cnty., 752 So. 2d 530, 533 (Fla. 1999)). We

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will review the trial court’s findings of fact for competent, substantial evidence and

review its conclusions of law de novo. Strand, 992 So. 2d at 154. “Subsumed

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.” Keys Citizens for Responsible Gov’t, Inc. v. Fla. Keys Aqueduct Auth.,

795 So. 2d 940, 946 (Fla. 2001) (quoting State v. City of Port Orange, 650 So. 2d

1, 3 (Fla. 1994)). We next discuss Reynolds’ claims in this appeal.

A. Due Process and Ripeness

In his first issue, Reynolds argues that he was denied due process when

FDFC offered and the court accepted an amended financing agreement that

removed language allowing judicial foreclosure as a remedy from section 4 of the

original form financing agreement that had been attached to the complaint. This

objection was not sufficiently preserved. At the bond validation hearing, when

FDFC offered the amended financing agreement during the testimony of FDFC

Executive Director William Spivey, Reynolds’ attorney did not object to admission

of this document or testimony about it, but asked only to be allowed to inquire into

the document on cross-examination. In the motion for rehearing filed by

Reynolds, he did object at that time to acceptance of the amended financing

agreement, primarily citing the rights of parties not before the court.

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 Even if this issue had been sufficiently preserved, it lacks merit. In Keys

Citizens, we held that constructive notice of the complaint was sufficient even

though it did not mention that the court would also consider the validity of the

mandatory sewer connection ordinance. 795 So. 2d at 949. We noted in Keys

Citizens that the bond notification statutes do not require the specificity in the

published notice that was urged by the citizens in that case. Id. Reynolds relies on

our decision in Ingram v. City of Palmetto, 112 So. 861 (Fla. 1927). However, in

Ingram, the City filed a petition for bond validation that “clearly did not comply

with the affirmative requirements of the statute” that set forth what facts and

allegations were to be in the petition. Id. at 862. The trial court permitted the

petition to be amended to meet the requirements of the statute, but on review this

Court found the procedure followed was improper. Id. We held, “If the

amendments made the petition sufficient in law, the intervener (sic) was given no

opportunity to take issue on the facts alleged. . . . Even if such proceeding may be

regarded as due process of law, it is not such as is contemplated by the statute.” Id.

In this case, the intervenor—Reynolds—did have an opportunity both at the show

cause hearing and at the hearing on his motion for rehearing to raise objections to

the amended financing agreement and bring those objections and arguments to the

court’s attention.

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 We have explained that “[t]he specific parameters of the notice and the

opportunity to be heard required by procedural due process are not evaluated by

fixed rules of law, but rather by the requirements of the particular proceeding.”

Sch. Bd. of Palm Beach Cnty. v. Survivors Charter Sch., Inc., 3 So. 3d 1220, 1236

(Fla. 2009) (quoting Keys Citizens, 795 So. 2d at 948). The notice and opportunity

to be heard given to Reynolds were sufficient for the requirements of this particular

proceeding, especially in light of his failure to object to the amended document at

the hearing. Further, the amendment to the model financing agreement was in

accord with the law argued by Reynolds concerning the issue of judicial

foreclosure, and provides no basis for this Court to reverse and require initiation of

an entirely new proceeding.

Reynolds also contends that the bond validation judgment must be reversed

because the issue was not ripe for determination due to the fact that FDFC had not

yet entered into any interlocal agreements under the program and did not, itself,

have the ability to impose the assessments required for repayment of the bonds.

We disagree that this case was not ripe for bond validation or that the court lacked

jurisdiction. Section 75.01, Florida Statutes (2014), confers jurisdiction on the

circuit courts to determine the validity of bonds and certificates of indebtedness.

Section 75.02, Florida Statutes, expressly states that the plaintiff in a bond

validation proceeding “may determine its authority by law to issue bonds.” This

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presupposes that the bonds will not be issued and specific payment provisions

enacted until after the validation proceeding. See also Boatright v. City of

Jacksonville, 158 So. 42, 55 (Fla. 1934) (Whitfield, J., concurring) (noting that a

bond validation proceeding allows the rights and immunities of the taxpayers and

citizens to be determined before the bonds are issued). FDFC has statutory

authority and a properly enacted resolution to issue the bonds and to seek a

determination of the validity of the bond issue before it does so. Moreover, the

record established that FDFC intends to execute interlocal agreements to provide

for implementation of the PACE program in localities that choose to participate,

and those local governments will levy and collect the non-ad valorem special

assessments at issue here. Section 163.08(3) specifically states that the local

government may impose the PACE assessments. Nowhere does the Legislature

require that, before a PACE bond issue may be validated, the documents show

specific, executed interlocal agreements or any specific assessments to be

reviewed. Accordingly, relief is denied on this claim.

B. Authority to Levy Non-ad Valorem Assessments

Reynolds next contends that the bond validation must be reversed because

the assessment scheme set forth in the bond documents, which provides in several

places that FDFC will impose the special assessments necessary to fund repayment

of the bonds, is illegal because FDFC was not given express statutory authority to

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levy the special assessments. Reynolds contends that FDFC’s attempt to remedy

this by stipulating at the hearing that it would not levy assessments, and that the

local governments that will be parties to the interlocal agreements will levy the

assessments, cannot support the validation of the bond issue. He further contends

that the trial court’s attempt to remedy this, by declaring that in any documents

used in the bond program, FDFC will delete references to FDFC imposing

assessments, does not eliminate the fatal flaw in the bond documents that were

approved by the FDFC board and attached to the complaint.

We agree with Reynolds, and with FDFC, that FDFC does not have

authority under the PACE Act to levy the special non-ad valorem assessments

called for under the Act. First, and foremost, section 163.08(3), Florida Statutes

(2014), specifically authorizes the local government to levy the non-ad valorem

assessments. Second, section 288.9605(2)(e) states that FDFC may enter into

interlocal agreements pursuant to section 163.01(7) with public agencies for the

exercise of “any power, privilege, or authority consistent with the purposes of this

act.” That statutory authority, although broad, does not expressly grant FDFC the

authority to levy the special non-ad valorem assessments. Third, collection of the

special assessments on a combined tax notice, and enforcement of payment for the

special assessments by sale of tax certificates and tax deeds, is performed by the

local government.

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 Although we agree with Reynolds that the PACE Act does not authorize

FDFC to levy the non-ad valorem assessments, we disagree that inclusion of that

language in the bond documents is a basis to reverse the trial court’s amended final

judgment. The trial court agreed that the assessments would be collected by the

local government and opined that section 28 of the amended final judgment made

that fact clear. We conclude, however, that the language of the amended final

judgment is subject to misinterpretation so long as any of the bond documents

continue to contain references to FDFC imposing the special assessments. For that

reason, we direct that on remand, the circuit court shall require FDFC to amend all

bond documents that refer to FDFC having, or being delegated, authority to levy

the non-ad valorem special assessments, in order to remove those references and to

make clear that it is the local government that will levy such assessments.3

3. The model interlocal agreement approved by the FDFC and attached to
the complaint states in section 4(A) that the public agency executing the interlocal
agreement with FDFC “hereby delegates to FDFC the power to impose the
Assessments . . . .” Section 4(B) refers to the power of FDFC to levy assessments.
Section 6 of the master bond resolution provides that the interlocal agreements
“shall provide the Corporation the authority to levy non-ad valorem assessments on
property owners . . . .” Section 2(H) of the master bond resolution states in
pertinent part that “[i]f required by law, it is the Corporation’s intention to enter
into interlocal agreements . . . pursuant to which such local governments shall
provide the Corporation the authority to levy non-ad valorem assessments . . . .”
The amended form financing agreement states in the “Recitals” section that the
local government has consented to “FDFC conducting assessment proceedings.”
Exhibit B to the amended form financing agreement, relating to the schedule of
annual assessment installments, states that the “program administrator will adjust

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 C. Judicial Foreclosure as a Remedy for Non-Payment

Finally, Reynolds contends correctly, and the circuit court agreed, that the

only collection method authorized by the Legislature for the special assessments is

the “uniform method” set forth in chapter 197, Florida Statutes. Although the

amended final judgment makes no express reference to removing the word

“foreclosure” from the documents, the circuit court did state in the amended final

judgment that “[t]he Program Special Assessments levied and imposed against

affected real property must be collected pursuant to the Uniform Collection method

as set forth in Sections 197.3632 and 197.3635, Florida Statutes, pursuant to which

non-ad valorem assessments are collected annually over a period of years on the

same bill as property taxes.” The master bond resolution also states that the

assessments shall be collected pursuant to the “Uniform Assessment Collection

Act.” Reference to the uniform method of collection also appears in the form

interlocal agreement.

Section 163.08(4), Florida Statutes, expressly provides in pertinent part that

“[c]osts incurred by the local government for such purpose may be collected as a

non-ad valorem assessment. A non-ad valorem assessment shall be collected

pursuant to s. 197.3632 . . . .” § 163.08(4), Fla. Stat. (2014) (emphasis added).

the assessment and estimated maximum annual assessment installments, if
necessary.”

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Thus, the assessments in this bond validation are mandated by statute to be

collected under the “uniform method” provided in chapter 197, Florida Statutes.

Section 197.3632(8)(a), Florida Statutes, does not provide for judicial

foreclosure as a remedy, but states that non-ad valorem assessments collected

pursuant to the section shall be subject to all collection provisions of the chapter,

“including . . . penalty for delinquent payment, and issuance and sale of tax

certificates and tax deeds for nonpayment.” § 197.3632(8)(a), Fla. Stat. (2014)

(emphasis added). Thus, there is no doubt that collection of the assessments is

required to be by the uniform method of collection set forth in chapter 197, and not

by judicial foreclosure.

The amended financing agreement removed one reference to foreclosure as a

remedy, but still refers to foreclosure in section 14, which states that a property

owner will not be competent to impair FDFC’s rights, including “the right to

pursue judicial foreclosure of the Assessment lien.” In addition, section 18 of the

amended financing agreement also refers to foreclosure; and the master indenture

refers to foreclosure in the definition of administrative expenses. All parties

agreed at the show cause hearing, and now in this appeal, that the special PACE

non-ad valorem assessments may not be collected by way of judicial foreclosure,

and the bonds were validated under the condition that the collection of the

assessments be pursuant to chapter 197. The circuit court anticipated that the bond

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documents would be corrected to remove the references to foreclosure. However,

to fully accomplish this, we direct that on remand, the circuit court shall require

amendment of the documents to remove all references to judicial foreclosure, and

that such amendments be approved by the governing board of FDFC.

V. CONCLUSION

For the foregoing reasons, we dismiss the appeal of Florida Bankers

Association for lack of standing. We affirm the circuit court’s amended final

judgment validating the Florida Development Finance Corporation special

assessment revenue bonds. However, because additional steps are required to

implement the circuit court’s rulings and the rulings of this Court, we remand to

the circuit court with instructions to require FDFC to amend the bond documents to

remove all references to judicial foreclosure as a remedy and remove all references

to the FDFC having, or being delegated, authority to levy the non-ad valorem

assessments. We direct that the amended documents be filed in the circuit court

following approval of the amendments by the governing board of the FDFC.

It is so ordered.

PARIENTE, QUINCE, CANADY, POLSTON, and PERRY, JJ., concur.
LEWIS, J., concurs in result only with an opinion.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.

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LEWIS, J., concurring in result only.

I recognize that the majority is correct in its determination as to what the

Legislature has the power and authority to accomplish. Nevertheless, due to the

limited review of the Court in bond validation proceedings, and because I have

great concern with regard to the far-reaching impact of today’s decision, I concur

in result only. This government plan utilizes bonds to obtain funds for the purpose

of providing what appears to be individual home improvement loans to private

property owners to finance certain qualifying improvements to their homes—

specifically, improvements that involve energy conservation and efficiency,

renewable energy, and wind resistance (i.e., hurricane mitigation). See §

163.08(2)(b), Fla. Stat. (2014). The loans are then to be repaid through the levy of

“special assessments” on the improved properties. I do not dispute that local

governments can impose special assessments upon properties that receive a

specific benefit from general improvements or services; however, there is no

precedent in Florida that expressly holds a special assessment can be levied upon

an individual property under circumstances such as these.

In Sarasota County v. Sarasota Church of Christ, 667 So. 2d 180 (Fla. 1995),

this Court explained that

special assessments must confer a specific benefit on the land
burdened by the assessment and are imposed under the theory that the
portion of the community that bears the cost of the assessment will

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 receive a special benefit from the improvement or service for which
the assessment is levied.
Although a special assessment is typically imposed for a
specific purpose designed to benefit a specific area or class of
property owners, this does not mean that the costs of services can
never be levied throughout a community as a whole. Rather, the
validity of a special assessment turns on the benefits received by the
recipients of the services and the appropriate apportionment of the
cost thereof. This is true regardless of whether the recipients of the
benefits are spread throughout an entire community or are merely
located in a limited, specified area within the community.

Id. at 183 (citation omitted). Consistent with this description, special assessments

have been historically and exclusively directed toward improvements or services

that benefit a general area of real property within communities or specific areas.

See, e.g., Morris v. City of Cape Coral, 163 So. 3d 1174, 1177 (Fla. 2015) (special

assessment for fire protection services levied on all real property); Donovan v.

Okaloosa Cnty., 82 So. 3d 801, 805 (Fla. 2012) (special assessment for beach

restoration and renourishment levied on properties within a Municipal Service

Benefit Unit); Citizens Advocating Responsible Envtl. Sols., Inc. v. City of Marco

Island, 959 So. 2d 203, 204-05 (Fla. 2007) (special assessment for expansion of

wastewater collection and treatment system imposed on users not served by the

current system); Sarasota Church of Christ, 667 So. 2d at 182 (special assessment

for stormwater improvements and services imposed on all developed property);

Workman Enters., Inc. v. Hernando Cnty., 790 So. 2d 598, 600 (Fla. 5th DCA

2001) (special assessment for fire and rescue services levied on the five categories

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of property within a county district);4 see also 70C Am. Jur. 2d Special or Local

Assessments § 1 (2011) (“Special or local assessments . . . are charges imposed on

property owners within a limited area to help pay the cost of a local improvement

which specially benefits property within that area.”). In my view, it is not a proper

use of special assessments, as they have been described by this Court and are

commonly understood, to repay funds that were loaned for home improvements to

only a specific individual home.

Moreover, because special assessments are to be fairly and reasonably

apportioned in accordance with the benefits received, Sarasota Church of Christ,

667 So. 2d at 183, it is implicit that more than one property will benefit from the

improvement. See Black’s Law Dictionary 121 (10th ed. 2014) (defining

apportionment as “Division into proportionate shares; esp., the division of rights

and liabilities among two or more persons or entities.” (emphasis supplied)). For a

single property to be subject to one hundred percent of a special assessment

because it is the only property that benefitted from a qualifying improvement is

completely inconsistent with the concept of apportionment and how special

assessments have been traditionally applied.

4. This Court has also indicated that a special assessment can be levied
throughout an entire taxing district, provided it confers a special benefit on the
properties assessed and is properly apportioned. See Harris v. Wilson, 693 So. 2d
945, 947 (Fla. 1997).

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 The decision of the Legislature to allow what are essentially home

improvement loans to be repaid through special assessments presents significant

ramifications because these loans receive priority over existing mortgages, which I

find troublesome. See § 170.09, Fla. Stat. (2014) (noting that special assessments

“shall remain liens, coequal with the lien of all state, county, district, and

municipal taxes, superior in dignity to all other liens, titles, and claims, until paid .

. . .” (emphasis supplied)); compare Gailey v. Robertson, 123 So. 692, 692-93 (Fla.

1929) (holding that a lien on property that was the result of a special assessment

took priority over a preexisting mortgage, and rejecting claim that the result

constituted an impairment of the vested right of the mortgagee) with First

Nationwide Mortg. Corp. v. Brantley, 851 So. 2d 885, 887 (Fla. 4th DCA 2003)

(holding that a city lien arising from a loan for home repairs was not superior to a

preexisting mortgage because it was not the result of municipal services, a special

assessment, or any type of lien covered by the city code of ordinances). I am

inclined to agree with the specially concurring opinion in Brantley that to allow

individual home repair loans to take precedent over preexisting mortgages would

present significant constitutional concerns. See 851 So. 2d at 887-88 (Fleet, A.J.,

specially concurring) (“To accept the proposition that governmental assistance to

an individual, natural or corporate, for residential improvement automatically

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becomes superior in dignity to a previously recorded mortgage simply fails to pass

constitutional muster.”).

As explained by the Court of Appeals for the Eleventh Circuit, mortgage

holders possess a constitutionally protected property right:

In Sarasota County v. Andrews, 573 So. 2d 113 (Fla. 2d DCA 1991),
the court found that a county’s attempt to assert that a lien created by
an ordinance was superior in right to a prior recorded mortgage, was a
substantial impairment of the first mortgage lien for federal and state
constitutional purposes. Id. at 115. Although Sarasota was decided
under a contract impairment analysis, it nevertheless stands for the
proposition that a mortgagee, who is in essence a party to a security
contract, has a property right in preservation of its mortgage interest.
See also Mailman Development Corp. v. Segall, 403 So. 2d 1137,
1138 (Fla. 4th DCA 1981) (holding that a “mortgagee should not be
required to accept a substituted security interest since a mortgagee lien
is a property right . . . .”).
Moreover, Florida law gives a mortgagee the right to foreclose
and reforeclose its liens. Fla. Stat. § 697.01 (1993). Therefore, a
mortgage is a cause of action creating a lien on property. See United
of Florida, Inc. v. Illini Federal Savings & Loan Association, 341 So.
2d 793, 794 (Fla. 2d DCA 1977). The Supreme Court has specifically
held that “a cause of action is a species of property protected by the
Fourteenth Amendment’s Due Process Clause.” Logan v.
Zimmerman Brush Co., 455 U.S. 422, 428, 102 S. Ct. 1148, 1154, 71
L. Ed. 2d 265 (1982).

Zipperer v. City of Fort Myers, 41 F.3d 619, 623 (11th Cir. 1995). Yet, the bonds

under consideration can be issued, and special assessments levied by local

governments, without input from mortgage holders because the majority has

determined that they do not have standing to participate in these proceedings.

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 In the probate context, the United States Supreme Court has held that a

nonclaim statute that only required notice by publication (which is the only notice

to mortgagees here) was insufficient to protect the property interest of a creditor

under the Due Process Clause of the Fourteenth Amendment to the United States

Constitution. Tulsa Prof’l Collection Servs., Inc. v. Pope, 485 U.S. 478, 481, 484-

85 (1988). Instead, the Supreme Court determined that where the protected

property interest of a known or reasonably ascertainable creditor will be adversely

impacted by state action, due process requires actual notice of the government

action that will impact a property interest. Id. at 487-88, 491. The general notice

that was condemned by the Supreme Court in Pope is analogous to what has

occurred here with regard to the special assessments, which clearly qualify as state

action. The property interests of mortgage holders will unquestionably be

adversely impacted due to the priority given to special assessments under Florida

law, but those mortgage holders receive no actual notice of the bond validation

proceedings and lack standing to challenge the designation of the loan repayments

as superior to the property interests of prior mortgage holders. The rights of

mortgage holders are also adversely impacted by the legislation after a property

owner elects to participate in this loan process.

You may call a donkey a thoroughbred, but that donkey is going to remain a

donkey. These home improvement projects stand out on an island by themselves

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and, although they are very well intended, constitute an unprecedented expansion

of the concept of “special assessments.” It may be commendable for the

government to assist citizens with renovations to their homes. However, by

affirming the amended final judgment of the circuit court, it seems there will be no

limit to the purposes for which special assessments can be levied. Future

expansions will only further minimize and diminish mortgage holders’

constitutional property rights.5 These issues have not been fully briefed, nor have

they been fully argued.

Despite my deep concerns, I recognize that it appears that precedent does not

expressly address the use of special assessments in this fashion, and the decision as

to what is to be labelled a “special assessment” may fall within the discretion of the

Legislature. However, based upon the troublesome and far-reaching implications

of this case, I concur in result only.

Two Cases:

An Appeal from the Circuit Court in and for Leon County – Bond Validations
John C. Cooper, Judge – Case No. 372014CA000548XXXXXX

5. I do recognize some limitations to the concerns that I have expressed. If,
for example, a property presents a public nuisance, and the local government levies
a special assessment to correct or remove it for the benefit of a community or a
specific area, it would be logical for such an assessment to take priority over a
mortgage.

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Ceci Culpepper Berman of Brannock & Humphries, Tampa, Florida, on behalf of
Florida Bankers Association; and James C. Dinkins of Mark G. Lawson, P.A.,
Tallahassee, Florida, on behalf of Robert Reynolds,

for Appellants

Gregory Thomas Stewart, Lynn Miyamoto Hoshihara, and Carly J. Schrader of
Nabors, Giblin & Nickerson, P.A., Tallahassee, Florida, on behalf of Florida
Development Finance Corporation; Raoul G. Cantero, III, Thomas Neal McAliley,
and Jesse Luke Green of White & Case LLP, Miami, Florida, on behalf of Florida
Development Finance Corporation; Jane Kreusler-Walsh, Rebecca Mercier Vargas,
and Stephanie L. Serafin of Kreusler-Walsh, Compiani & Vargas, P.A., West Palm
Beach, Florida, on behalf of Florida Development Finance Corporation; L. Thomas
Giblin of Nabors, Giblin, et al., Tampa, Florida, on behalf of Florida
Development Finance Corporation; Gerald Paul Hill, State Attorney, and Victoria
Jacquelyn Avalon, Assistant State Attorney, Tenth Judicial Circuit, Bartow,
Florida, on behalf of the State of Florida; Ralph Larizza, State Attorney, and
Phillip Dale Havens, Assistant State Attorney, Seventh Judicial Circuit, Daytona
Beach, Florida, on behalf of the State of Florida; and Philip Glen Archer, State
Attorney, and Laura Michelle Moody, Assistant State Attorney, Eighteenth
Judicial Circuit, Viera, Florida, on behalf of the State of Florida,

for Appellees

Erin Lee Deady of Erin L. Deady, P.A., Lantana, Florida,

for Amicus Curiae PACENow

Keith W. Davis of Corbett, White and Davis, P.A., Lantana, Florida,

for Amicus Curiae Florida Green Finance Authority

George Steve Cavros, Fort Lauderdale, Florida,

for Amicus Curiae Southern Alliance for Clean Energy, Inc.

Edward George Guedes and Chad Stuart Friedman of Weiss Serota Helfman Cole
Bierman & Popok, P.L., Coral Gables, Florida,

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 for Amicus Curiae Green Corridor Property Assessment Clean Energy
District

Richard Watson, Tallahassee, Florida,

for Amicus Curiae Associated Builders and Contractors of Florida, Inc.

Jody Lamar Finklea and Amanda L. Swindle, Tallahassee, Florida,

for Amicus Curiae Florida Municipal Electric Association, Inc.

Joshua Douglas Smith and Travis Ritchie, San Francisco, California,

for Amicus Curiae Sierra Club

Elizabeth Wilson Neiberger and Susan Hamilton Churuti of Bryant Miller Olive
P.A., Tallahassee, Florida; Virginia Saunders Delegal, General Counsel, Florida
Association of Counties, Tallahassee, Florida; Harry Morrison, Jr. and Kraig
Armantrout Conn, Florida League of Cities, Inc., Tallahassee, Florida; Herbert
William Albert Thiele, Leon County Attorney, Tallahassee, Florida; and Daniel
Scott McIntyre, St. Lucie County Attorney, Fort Pierce, Florida,

for Amici Curiae The Florida Association of Counties, The Florida League
of Cities, Inc., Leon County, Florida, and St. Lucie County, Florida

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