TAXPAYERS WIN HUGE AD VALOREM TAX VICTORY

 

Attorneys Ed Fleming and Todd Harris of the McDonald Fleming & Moorhead firm were the prevailing lawyers in a case one expert called the “one of the biggest wins in Florida’s history” for taxpayers challenging ad valorem taxes.   The case was Portofino Tower One, et. al v. Escambia County Property Appraiser, et. al.   [list link]  Overall assessments, as a result of this taxpayer challenge, were reduced by more than $650 million over the six tax years involved.

The Court found the 765 condominium units at Portofino were overvalued 150 to 300 percent during the six tax years involved in the challenge. In some years, the evidence showed that certain condominium units were overvalued, and thus overtaxed, by more than 400 percent.

The case was unusual in that the condominiums are built on government owned land at Pensacola Beach in Escambia County.  Thus, the Court found the only portion of the properties subject to ad valorem taxation was the improvements. Rather than employ the depreciated cost basis for assessing the improvements only, the Property Appraiser sought to fractionalize the value of the land by looking to undeveloped condominium parcels, and then deducting that number from the sales value of the land and improvements together.  This “deductive” approach undervalued the land, and hence overvalued the improvements.  The Court found that the appropriate theory of appraisal to have been applied under these facts was the depreciated costs basis which valued the improvements only with no “bleed over” for the value of the land.

The ruling is believed to be one of the first in the state applying a revision to the Florida Statutes providing for a declaration by the court as to the validity or invalidity of a particular method of appraisal.  Prior to that revision, trial courts typically referred ad valorem challenges that they believed had merit back to the Property Appraiser for a revaluation.  Here, the trial court adopted in total the valuations by Plaintiff’s expert, Harry Collison, of Consortium Appraisal, Inc.  Judge Bell ordered a refund of overpaid taxes during these years.  The total amount of taxes that were overcharged exceeds $13 million.

Although the ruling is being appealed, Fleming said he is confident it will be affirmed on appeal.  “Under cross examination, the Property Appraiser’s own witnesses conceded that their valuations as to improvements included a “bleed over” of the value of the government-owned land,” Fleming said.  “With that admission, their assessment could not stand, as the Court found the government-owned land was exempt from ad valorem taxation. The appraisals by Mr. Collision were well supported by the factual record before the Court.”

 

IN THE CIRCUIT COURT IN AND

FOR ESCAMBIA COUNTY, FLORIDA

PORTOFINO TOWER ONE HOMEOWNERS

ASSOCIATION AT PENSACOLA BEACH, INC.,

Plaintiff,

vs. CASE NO. 2004 CA 2288

CHRIS JONES, Property Appraiser for Escambia

County, Florida; and JANET HOLLEY, Tax

Collector for Escambia County, Florida,

 

Defendants.

________________________________________/

 

 

FINDINGS OF FACT, CONCLUSIONS OF LAW

AND FINAL JUDGMENT ORDER

THIS CAUSE, having come before the Court on Plaintiffs’ challenge to the amount of valuation (and related taxation) of improvements located on government owned property; and the Court having heard evidence and arguments at a four-day trial between November 5^th and November 10^th, 2010, and being otherwise fully advised in the premises, makes the following findings of fact, conclusions of law, and ruling:

1. Plaintiff Associations bring these actions as representatives of the owners of the 765 condominium units located in the five towers of Portofino Condominiums, hereafter “taxpayers.” The land associated with these condominium units is owned by Escambia County, a political subdivision of the State of Florida, and managed by an agency created for that purpose, the Santa Rosa Island Authority (SRIA). It is leased to the taxpayers involved in this tax challenge.

2. The taxpayers preserved their rights by timely asserting their challenge each year for the six years in question, and by making timely payment of the amounts they believed, in good faith, to be due. Defendants stipulated that such rights were preserved for all of the taxpayers involved except for those who were named in this Court’s order granting partial summary judgment as to certain unit owners. As to one of those owners, W. Cecil Johnson, Jr. and Carolyn H. Johnson, former owners of Unit 909, Tower Two, the parties agreed to separately brief the issues involved in a motion for reconsideration filed by Plaintiffs, and the Court retains jurisdiction as to whether the relief granted by this Order applies to the Johnsons.

3. All of the independent lawsuits filed by Plaintiffs were consolidated into the above-styled action, and this Order adjudicates all pending issues raised in those lawsuits except as expressly reserved herein.

4. During the first portion of this bifurcated case, this Court GRANTED summary judgment for Defendant Property Appraiser’s argument that Plaintiffs had a lease on the land only, and that Plaintiffs owned the improvements.

5. Beginning with tax year 2004, Defendant Tax Collector has imposed taxes against the improvements only based on the assessed value of these improvements.

6. Defendants have recognized as exempt the government owned land for each of the six tax years involved in this litigation. Prior to 2004, both land and improvements were deemed to be government owned property, and hence the entire property (land and improvements) was deemed exempt from ad valorem taxation.

7. The issue before the Court during this four-day trial was whether Defendant Property Appraiser’s assessed value of the improvements only was too high.

8. Defendants argued at trial that the value placed on the improvements represented “just value” of those improvements. Defendant Property Appraiser also argued at trial that he had the right to tax both land and improvements during the years at issue. However, he acknowledged in testimony and in sworn interrogatory responses that he was not taxing the land, but treating it as exempt. Those interrogatory responses were introduced into evidence as Plaintiffs’ Exhibit 17 without objection.¹ Any change in position by the Property Appraiser on this issue would not be applied retroactively.

9. Given the split ownership of the condominium property, with the government owning the land that goes with each condominium parcel and the leaseholders being deemed to own the improvements, this Court finds the Property Appraiser was faced with the unusual and difficult task of determining the value of the improvements only. Although this task was difficult, it nonetheless had to be accomplished in a manner that did not allow a “spill over” of the value of the tax exempt government owned land into the assessments for the taxable improvements.

10. There was no dispute as to the total value placed on the condominium property (government owned land and tenant owned improvements). The total value could be established by the “market approach,” as there were ample sales for the land-improvements “package,” and that total value was not disputed by Plaintiffs. The dispute was whether the Property Appraiser’s valuation of improvements only was excessive.

11. It was established without dispute at trial that there were no comparable sales for either just the improvements associated with each condominium unit, or just the land rights associated with each condominium unit.

12. The Property Appraiser conceded that his duty was to assess each condominium as a separate and distinct parcel of real property and not as a bulk sale.

13. Deputy Property Appraiser Keith Hodges testified the value placed on improvements only included some unknown amounts for location. Mr. Hodges further conceded that he could not say whether 10 percent, or 50 percent, of his “improvements only” valuation was, in fact, value created by location. Property Appraiser Chris Jones, as well as the Property Appraiser’s own expert, conceded “location” equates to land value -- not the value of improvements. Thus, it was undisputed at trial that some unknown portion of the assessments for “improvements only,” in reality, was an impermissible “spill over” of the value of land that was exempt from ad valorem taxation.

14. It was also conceded by the Property Appraiser’s own expert, Mr. Diskin, that the inclusion of land value in assessments of improvements only would make the challenged valuations wrong.

15. It was established by undisputed expert testimony at trial that the depreciated cost approach is a professionally accepted means for determining the value of improvements only. Neither Mr. Diskin, nor any other expert who testified, offered any other accepted appraisal methodology for establishing just value of improvements only as to a condominium.

16. Deputy Property Appraiser Keith Hodges conceded that the method used by the Property Appraiser was one he created for application to condominiums on government owned property, and he is not aware of any appraisal treatise or peer-reviewed article that approves of his method. Not even the Property Appraiser’s own expert, Barry Diskin, offered testimony in support of the Hodges approach, and conceded that if any portion of the assessments derived at by application of the Hodges methodology included intangibles related to location, his assessments would be wrong.

17. It was established at trial that the Property Appraiser did not run the necessary calculations for the properties at issue to develop the information required to properly consider the professionally accepted depreciated cost approach. Deputy Property Appraiser Keith Hodges conceded that he could not have properly considered the cost approach without knowing the numbers such an approach would yield, and that he could not have known the numbers the cost approach would yield without performing calculations to determine what the numbers would be. Neither Mr. Hodges, nor to his knowledge anyone else at the Property Appraiser’s office, made the calculations that would be required for evaluating the depreciated replacement cost approach.²

18. The only expert at trial who valued improvements only using the depreciated cost approach, which all experts agreed was an accepted appraisal approach for valuing improvements, was Harry Collison. A summary of Mr. Collision’s valuations (unit by unit, year by year) was admitted without objection as Plaintiff’s Exhibit 25. The Defendants witnesses (including Mr. Hodges) did not challenge the accuracy of Mr. Collison’s values under a depreciated cost approach methodology. Thus, there was no genuine dispute that the condominium unit values for improvements only established by the Plaintiffs’ expert, Mr. Collison, were correct if this Court finds that a depreciated cost approach was the most appropriate means for valuing the Portofino improvements.

19. Defendants’ expert, Barry Diskin, did not compute the value of the improvements only, offered no opinions as to the accuracy of the values reached by Mr. Collison, and limited his testimony to a criticism of how Mr. Collision tested his conclusions on the just value of the improvements.

20. The use by Mr. Collision of a land-ratio study for testing his initial conclusions as to value did not alter or change his final conclusions. Page 123 of Mr. Collision’s detailed report, Plaintiffs’ Exhibit “A,” shows his “reconciliation” matrix, and demonstrates that his value of improvements only using the depreciated cost (left hand column) did not change when compared to his land-improvements ratio study (middle column). The “reconciled values” (right column) remained unchanged.

21. There is no requirement that a land-ratio study be performed as part of a depreciated replacement cost analysis.³

22. The evidence at trial established that the ceiling for value of improvements only under the depreciated cost approach is 100 percent of the replacement cost new. That ceiling may be adjusted downward to account for various forms of depreciation, but not upward beyond that ceiling.⁴ Recognition of this ceiling is consistent with the “Substitution” theory of appraisal, recognized by all experts who testified at trial, which states that rational buyers will not pay more than 100 percent of the replacement cost new for a specific property. In this case, the specific property was improvements -- the only property subject to the ad valorem taxes at issue.

23. The evidence established Defendant Property Appraiser’s assessments were more than double this ceiling.

24. Plaintiffs also presented uncontroverted evidence that the Property Appraiser’s disputed assessments were, on average, 256 percent higher than values assigned by the Property Appraiser to improvements of like (or better) quality and utility elsewhere in Escambia County.⁵ No evidence (expert or otherwise) was presented that would have justified this substantial difference in values given to comparable improvements elsewhere.

25. The only plausible explanation for the marked difference between values placed on improvements at Portofino, and comparable-to-better improvements elsewhere, is that the Hodges approach failed to isolate improvements only, but included value attributable to the land. The Defendants witnesses admitted that this “spill over” had occurred.

26. Average values (as established by the Defendant Property Appraiser’s records) for comparable improvements located elsewhere in Escambia County, including those at other Pensacola Beach properties, ranged from $111.97 a square foot to $141.39 per square foot during the six years at issue. During that same period, those values for improvements only at Portofino ranged from $205.66 to $466.16 per square foot. This evidence established that values for individual units exceeded $500 per square foot during portions of those six years at issue. These numbers were established by uncontroverted evidence at trial.

27. Plaintiffs’ experts, Harry Collision, testified that no accepted appraisal theory would support valuations of improvements at Portofino that far exceeded replacement costs. Furthermore, expert Dan Green testified there is no accepted theory of appraisal that would explain valuations of Portofino improvements ranging from 150% to more than 300% greater than comparable or better improvements in other parts of Escambia County. Defendants offered no explanation for these substantial differences between their assessments of improvements only at Portofino, and their valuations of comparable properties located elsewhere in the county. Although Defendants frequently stated their valuations were dictated by the “market,” the only “market” figures offered were either a combination of land and improvement values, or for undeveloped land located somewhere other than Pensacola Beach. As for that undeveloped land, Defendants conceded the vertical “air rights” owned⁶ exclusively by condominium unit owners did not exist as to that undeveloped land.

28. Deputy Property Appraiser Keith Hodges admitted he created an approach that was applied to beach condominiums only that is not recognized in any treatises, manuals or peer-reviewed articles for valuing the contribution that land has to the total value of a condominium parcel; i.e., fractionalizing the “parent tract” value into the subdivided condominium units. The evidence established that this approach was not an accepted approach and that it violates an established appraisal principal that the total value of the individual subdivided parts are greater than the value of the original “parent tract.” That principal was demonstrated at trial by uncontroverted evidence showing the dramatic difference (as high as 17,000 percent) between the values the Property Appraiser places on a non-subdivided parent tract, and the collective values of the individual lots once a subdivision of the parent tract occurs.⁷ Those differences in value occurred during two year periods. The Property Appraiser then deducted that assumed fractionalized value of “parent tracts” located in Perdido, Fort Walton Beach and Navarre from the total value of the Portofino units, and assumed that the balance equaled the value of the improvements. Under this approach, the value of the improvements would be overstated if the value of the land was understated, and evidence at trial showed that valuing subdivided parcels by fractionalizing the value of the original parent tract would result in an undervaluation of the subdivided parcels.

29. The evidence established that the “parent tracts” used by the Property Appraiser were not from Pensacola Beach, and were undeveloped tracts of land on which condominium parcels had not been created. The undisputed testimony from condominium law expert Braden Ball was that vertical properties are created the moment the Declaration of Condominiums is recorded. It is those vertical rights that create the “air rights” owned exclusively by the unit owners; i.e., the rights that give unit owners the views that go with the location.

30. Defendant Property Appraiser’s own expert recognized that the vertical properties created by the Declaration of Condominiums create a valuable property right that exists separate and distinct from the value of the improvements; however, he knew of no way to value those rights.

31. The Property Appraiser’s method for valuing the improvements failed to properly value the land associated with each condominium unit. This failure resulted in a valuation of improvements that was 150 to more than 300 percent higher than comparable improvements valued by Defendant anywhere else in the County. Accordingly, it is apparent that Defendants’ method undervalued the land, and thus overvalued the improvements. Defendants valued the Portofino improvements at such a high level during some years that the five towers could have been torn down and replaced twice over for the collective values being assessed.

32. At best, Defendants’ extraction method for trying to value improvements only accounted for a percentage of the bulk sale value of horizontal land that existed on undeveloped parent tracts located somewhere other than Pensacola Beach. It made no attempt to value the “air rights” that give unit owners the ability to exclusive possession of a “sky box” from which to enjoy the sights, sounds, views, smells, ambiance and atmosphere of Pensacola Beach.

 

 

 

 

CONCLUSIONS OF LAW

1. Under Fla. Stats. §194.301 (2004)⁸, the Property Appraiser obtains a presumption of correctness if and only if the taxpayer fails to show by a preponderance of the evidence, that:

(a) the Property Appraiser failed to consider properly all eight criteria listed in Fla. Stats. 193.011; OR

(b) the Property Appraiser's assessment is arbitrarily based on appraisal practices which are different from the appraisal practices generally applied by the Property Appraiser to comparable property within the same class and within the same county.

 

2. If the taxpayer establishes by a preponderance of the evidence that the Property Appraiser either failed to consider properly one or more of the eight criteria, or that the method applied was arbitrary, the burden of proof is then on the taxpayer to establish by the preponderance of the evidence that the value placed on the property at issue was overstated. Id.

3. If the taxpayer does not establish the Property Appraiser failed to consider properly one or more of the eight criteria, or that his appraisal methodology was arbitrary, the burden is on the taxpayer to establish by clear and convincing evidence that the assessment is in error. Id.

4. The Property Appraiser cannot be deemed to have properly considered the eight criteria when he lacked the information needed to consider one or more of the criteria. Scripps Howard Cable Company v. Havill, 665 So.2d 1071 (Fla. 5^th DCA 1996), affirmed 742 So.2d 210 (Fla.,1998)(holding it is “impossible” to conclude the property appraiser properly considered the eight criteria where he lacked the information needed for such consideration).

5. Proof that the property at issue was valued substantially higher than admittedly comparable-to-better properties would be sufficient, even under the pre-1997 law, to show more than a mere difference of opinion, and would overcome any presumption of correctness that might exist. Schleman v. Connecticut General Life Ins. Co., 9 So.2d 197 (Fla. 1942)(proof of taxpayer’s allegations that its property was assessed at about three times its actual cash value would overcome presumption in favor of the taxing official).

6. Even under the pre-1997 law, Property Appraisers were not given an unbridled discretion in performance of their duty to establish just valuation, which is legally synonymous with “fair value.” Walter v. Schuler, 176 So.2d 81 (Fla. 1965).

7. Use of a valuation method for property that results in the inclusion of value attributable to exempt property is a violation of the Florida Constitution’s mandates requiring a just valuation of all property for ad valorem taxation. Havill v. Scripps Howard Cable Company, 742 So.2d 210 (Fla. 1998)(holding that the methodology employed by the Property Appraiser was “constitutionally infirm” when it was “unlikely that the value of intangible assets and other nontaxable items can be subtracted in a nonarbitrary fashion to reveal the just valuation of the [taxable] personal property.”) Id. at 213, citing to Art. VII, Section 4, Fla. Constitution.

8. Florida Law exempts from ad valorem taxation government owned property. Fla. Stats. Section 196.199.

 

ANALYSIS AND RULING OF THE COURT

Defendants raised two basic arguments:

(1) They argue they have fairly assessed (and thus taxed) the value of improvements only.

(2) Their counsel argued that by submitting the government-owned property to the condominium form of ownership, Chapter 718 of the Florida States supersedes Florida Stats. Section 196.199 that exempts government-owned land from ad valorem taxation and made the land taxable.

The Court will address the second argument first.

Right to Tax the Land

Fla. Stat. §718.120 states in relevant part: “Each condominium parcel⁹ shall be separately assessed for ad valorem taxes and special assessments as a single parcel.” Defendants assert this statute grants to the Property Appraiser the right to assess the value of the land and the value of the improvements for purposes of ad valorem taxation. The Court rejected this argument when denying Defendants’ Motion for Judgment of Dismissal at the conclusion of Plaintiffs’ case.

It was also undisputed at trial that the Property Appraiser has classified the land as exempt for the six tax years at issue. The Court notes that during the portion of this case in which the legality of assessing the improvements was at issue, it was the position of the Property Appraiser that the lease fees paid by Plaintiffs were only for the land -- not the improvements -- and thus the improvements were owned by Plaintiffs and subject to ad valorem taxation. Finally, there is no dispute in the record that the Portofino taxpayers have sub-subleases for which a lease fee is paid to the Santa Rosa Island Authority. If the improvements are equitably owned by the taxpayers rather than leased, then the only thing that could be subject of the lease is the government owned land. It is certainly assumed that the government had something of value for which it has received millions of dollars in lease fees, and that “something” is the government owned land.

Even under Defendants proposed interpretation of §718.120, the statute does not change the fact that the land is owned by the government and therefore, is not subject to ad valorem taxation pursuant to Fla. Stat. §196.199 which requires that government owned land be exempt from taxation¹⁰

Justness of the Valuation

Next, Defendants argue that the valuations at issue in this matter were just. Under Fla. Stats. §194.301 (2004), the Property Appraiser obtains a presumption of correctness if and only if the taxpayer fails to show by a preponderance of the evidence, that:

1. the Property Appraiser failed to consider properly all eight criteria listed in Fla. Stats. 193.011; OR

 

2. the property appraiser's assessment is arbitrarily based on appraisal practices which are different from the appraisal practices generally applied by the property appraiser to comparable property within the same class and within the same county.

As discussed below, and as the Findings of Fact above amply demonstrate, the taxpayers have met their burden on both elements. Meeting their burden as to either prong of this two-prong tests eliminates the presumption.

Proper Consideration of the Eight Criteria

Although a Property Appraiser need not apply all eight criteria, all eight must be considered “properly.” To consider the criteria properly, the Property Appraiser must have performed an analysis that developed the data required to evaluate whether they are applicable. Scripps Howard Cable Company v. Havill, 665 So.2d 1071 (Fla. 5^th DCA 1996), affirmed 742 So.2d 210 (Fla.,1998)(holding it is “impossible” to conclude the property appraiser properly considered the eight criteria where he lacked the information needed for such consideration). More specifically, in making a determination as to which of the three appraisal methodologies to use (market, income, or cost), the Property Appraiser could not have properly considered an approach without running calculations that would demonstrate the assessed value which the method would reveal. In this case, such calculations were not performed.

In the case before the Court, factor five (5) required the Property Appraiser to properly consider the “replacement costs” approach. This is one of the three accepted methods of appraisal (the other two being “market” or “income.”) All parties agreed that the income approach was not applicable, and that there was no market data available for the property being assessed, i.e., the improvements. Thus, not only was the cost approach potentially applicable, it was the only plausible approach available for valuing improvements only, and is the one that the Property Appraiser’s own expert says he would have likely used had he been asked to value improvements only.

The evidence demonstrated that the Property Appraiser did not run the calculations required to know what value was indicated by the depreciated cost approach. Thus, it could not have been “considered properly.”

Criteria number four (4) under Fla. Stats. 193.011, the “quantity or size of said property,” was an additional criteria that was, based on the evidence before the Court, not applied properly. The Property Appraiser attempted to “extract” the land value from the total value by assuming that the land rights that go with an individual condominium parcel are equal to the fractionalized value of the horizontal, undeveloped land. The Property Appraiser, at best, divided up undeveloped, horizontal land to value a land right that was both horizontal (i.e., ownership with others of the horizontal land), as well as “vertical” rights belonging exclusively to a specific condominium unit. Failure to show that he considered those vertical air rights, rights that the Defendant Property Appraiser’s own expert recognized as having value, was a failure to show that he properly considered factor four.

Viewed from another perspective, the “property” at issue in this case was the improvements only. The evidence established that the Property Appraiser made no attempt to directly value that property even though a professionally accepted approach was available for doing so. Defendant Property Appraiser’s key witness, the person who made the assessments, (Keith Hodges) admitted that a portion of the value of the tax exempt land (how much he doesn’t know) spilled over into his valuation. Thus, Defendant Property Appraiser could not be deemed to have properly considered the quantity and size of the property being valued; i.e., the improvements only.

For these reasons, the taxpayers have demonstrated by a preponderance of the evidence that the Property Appraiser failed to properly consider all of the eight criteria as required by §193.011 and §194.301.

Assessment Arbitrarily Based

It was undisputed that the Property Appraiser’s indirect methodology for valuing improvements only (the only property subject to taxation) included value of the land (not subject to taxation). Uncontroverted evidence at trial established that the degree of “spill over” was substantial, as improvements at Portofino were assessed at rates far greater than comparable-to-better improvements elsewhere in the county. This provided ample evidence that the Portofino improvements were being assessed in an arbitrary manner based on an appraisal practice that was not applied to the comparable improvements within the same class in Escambia County.¹¹

The Property Appraiser admitted that the method he employed to value condominiums on government property, i.e., fractionalizing value of a parent tract, was created and used solely for that purpose. It is not used to value other subdivided horizontal properties (such as subdivisions). The gross overvaluation of the improvements at Portofino was a direct result of this arbitrary application of an unaccepted theory of appraisal that was applied only to condominiums on government owned land.

In light of the fact that the taxpayers met their burden of showing by a preponderance of the evidence that the Property Appraiser had not properly applied all eight criteria, or (in the alternative) that it was arbitrarily based, the Property Appraiser’s “presumption of correctness” was lost, and the burden on the taxpayers was to show by a preponderance of the evidence that the Property Appraiser’s assessment was in excess of just value.

Taxpayers Met Their Burden of Proof to Show that Assessments

Did not Represent “Just Value” of Property at Issue

The evidence was uncontroverted that some portion of the value placed on the improvements at Portofino was, in reality, value of the tax exempt land. Defendant Property Appraiser admitted that this was the case, and Defendants’ own expert admitted that this made his assessment erroneous. The result was a valuation of improvements that were more than double the replacement costs, and that were 150 to more than 300 percent higher than admittedly comparable improvements. Under these facts, the Court finds (as an alternative finding) that the taxpayers met their burden of proof even if a “clear and convincing” standard were applicable.

The Court finds that if no relief was available for taxpayers under these facts, it would be difficult to formulate a set of facts in which taxpayers would have legal redress for overvaluation (and hence over-taxation). Defendants’ own witnesses conceded the Property Appraiser’s assessments were wrong. Thus, the question before the Court is: What Constitutes a “Just” Value for Improvements Only?

Just Value

The only evidence before the Court as to just value of improvements computed under a method of appraisal that all experts recognized as valid for valuing improvements only were the values established by Appraisal Expert Harry Collision. Thus, the Court adopts his unit by unit, year by year, valuations that were contained in Plaintiff’s Exhibit 25, and which are attached and incorporated into this Order as Exhibit “A.”

Based on these findings of fact and conclusions of law it is hereby ORDERED AND ADJUDGED as follows:

1. The land associated with the Portofino improvements is owned by the government and leased by the taxpayers. Therefore, by statute, the land is exempt from taxation.

2. The assessments made by the Property Appraiser for tax years 2004-2009 are in error, and are hereby VACATED.

3. The values as determined by the depreciated cost approach, as shown on Exhibit “A” to this Order, have been established by competent and substantial evidence as the just values to be applied.

4. The appraisal method used by the Property Appraiser for the tax years at issue was not appropriate.¹² The correct appraisal method to apply under these facts (i.e., where no comparable sales information is available for improvements only, and the income approach is not applicable as the parties so stipulated), is the depreciated cost approach. That approach is not only professionally accepted, it is the only approach identified at trial that assures that no portion of the exempt-from-taxation land value “spills over” into the assessed value of the taxable property; i.e., the improvements.

5. Those taxpayers who paid amounts in excess of the just values established by this Order are entitled to a refund of such excess amounts. Fla. Stat. §194.171(4).

This Court shall retain jurisdiction over this action for the awarding of costs, and for enforcement of this Order.

DONE AND ORDERED in Chambers at Pensacola, Escambia County, Florida, this 21st day of December, 2010.

 

__/s/_______________________________

The Honorable Frank Bell

Circuit Court Judge

 

Conformed copies to:

 

Edward P. Fleming, Esquire

Thomas M. Findley, Esquire

Elliot Messer, Esquire

Contruction Arbitration

      Ed Fleming been involved in numerous construction arbitrations and mediations, both as an attorney, as well as an arbitrator.

      He is familiar with state and federal statutes and rules governing the conduct and enforcement of arbitration awards. Ed has been involved in all aspects of construction disputes, including arbitration, mediation and litigation involving alleged defects in structural steel erection, concrete, airport runways, foundations, soil compaction, differing site conditions, framing (including structural issues), drywall finishing, stucco (both traditional and synthetic) windows, doors, asphalt and concrete roads and parking lots, roof and floor trusses, commercial and residential roof systems, HVAC systems, fire alarm systems, fire sprinkler systems, plumbing, electrical, and design issues relating to all aspects of construction, including ADA compliance issues. He also possesses significant experience with delay-impact cases, including “critical path” schedule analysis issues.

      Ed has handled more than a hundred construction bond and construction lien claims, both under state and federal law, construction licensing issues, construction defect cases, OSHA claims, wage and hour claims, disability, workers compensation, and wrongful death claims. He is a frequent lecturer on construction law issues, and has been certified as an approved instructor by both state construction regulators, and state bar associations, in several states.

      A major advantage of arbitration is having an arbitrator who understands both the legal and technical issues involved in construction disputes. Ed has such knowledge and experience and can serve as a construction claims consultant as well.

Construction Arbitrator

Commercial Litigation and Arbitration. In addition to construction law, Ed has been involved with aviation defect cases, oil and gas disputes (both production, as well as severance tax issues), partnership disputes, corporate litigation, securities law, trade secrets, patent law, fraud, civil theft, embezzlement, banking law, Uniform Commercial Code and other commercial issues.

Employment Law. Ed has been involved with all aspects of employment discrimination law, from drafting and reviewing corporate policies, to litigating employment discrimination cases.

Real Property Law. Ed has been counsel of record for numerous title issues, including boundary disputes, failure of title, title defects, and challenges relating to taxation of real property.

Government Law. Ed has been counsel of record in several governmental law cases, including voting rights issues (served as lead counsel for former President George Bush and Dick Chaney in a federal ballot dispute case), public records and “sunshine law” actions, and other issues relating to government financing, contracting and employment law issues. He currently serves as counsel for a quasi governmental entity that manages a major public works project.

Construction Arbitration and Mediation

      As a veteran construction lawyer, Ed Fleming knows the time pressures and stress on lawyers preparing and presenting complex construction claims cases. He has seen the shortcomings of state and federal courts in managing construction adjudication in a timely and cost effective manner. He also has experienced, first hand, the bureaucracy and high administrative fees charged by the nation's largest arbitration service, the American Arbitration Association. He believes private that arbitration before fair and experienced construction lawyers is a superior means of resolving construction disputes.

Construction Arbitrator and Mediator

      Ed's decision to offer himself nationally as a construction arbitrator was spurred by his desire to "give back" to the industry that has treated him well over the years. He believes that private arbitration before experienced construction lawyers to be the fastest and most cost effective manner of resolving construction liability disputes.

     Ed has represented clients in all aspects of construction claims, from design professionals, to developers and owners, general contractors, subcontractors, material suppliers and product manufacturers. His trial experience in construction disputes has ranged from "small dollar" cases involving single family houses, to multi-million dollar commercial construction litigation. During his 23 years as an attorney, and more recently as a construction arbitrator, he has gained extensive experience in construction law, construction methods, technical issues, and all other matters relating to construction litigation. He has been involved in numerous multi-party, complex construction litigation cases, including "product failure" cases, and "kitchen sink" condominium litigation.         

      Even before Ed decided to offer himself as a construction arbitrator, he was repeatedly asked to arbitrate construction disputes by lawyers familiar with his reputation for fairness, and knowledge of construction law and the technical issues that arise in construction claims disputes. As demonstrated by comments made by judges and attorneys (see "Testimonial" section), Ed has earned a reputation for both integrity and legal scholarship. He was twice asked by Florida's governor to serve on a commission that helps select appellate judges, and has been invited to Tallahassee to help interview prospective trial court judges. Ed frequently lectures on construction law issues. He has been approved as an instructor on construction law issues by bar associations and contractor licensing agencies in several states throughout the Southeast.

      Ed's scholarship, experience, diligence and dedication to achieving fair resolutions to complex disputes make him well qualified to assist you as a construction arbitrator.

      Ed Fleming is often described, by lawyers and judges, as a “lawyer’s lawyer.” He has been described by a former Florida Supreme Court Justice as “one of the best legal minds and principled attorneys I have ever known.” He achieved the “AV” ranking, the highest peer review ranking offered by the well-respected Marindale-Hubbell publication, early in his career.


      Edward P. Fleming is a founding partner of the law firm McDonald Fleming Moorhead. He earned his Juris Doctorate from the University of Georgia and his bachelor's degree from Georgia State University.

      Ed is involved in numerous legal associations including the Christian Legal Society, Attorney's Counsel for the American Subcontractors Association, and Attorney's Council for Florida Family Research Council. He has been twice appointed by Governor Jeb Bush to serve on the Judicial Nominating Commission for the First District Court of Appeals, a panel that nominates appellate judges. He currently serves as Vice Chairman of that Commission. He has earned an AV® rating by Martindale-Hubbell, the highest rating possible given by his peers in the Pensacola area.
      Ed's practice is focused on construction, corporate and business law. Ed's clients have included President George W. Bush and Vice President Richard Cheney whom he had the privilege of representing in a federal action challenging the rejection of hundreds of votes from overseas and military personnel during the 2000 Presidential Election.

Primary Areas of Practice
Construction Law and Litigation, Construction Arbitration, Construction Mediation
Commercial Litigation

Admissions
Admitted to practice law before all Florida Courts, the United States District Court for the Northern District of Florida, the United States District Court for the Middle District of Florida, and the United States Circuit Court of Appeals for the Eleventh Circuit.

Education
Juris Doctor, Magna Cum Laude, 1986
University of Georgia

B.S., 1974
Georgia State University

Employment
1988 - Present     Partner - McDonald Fleming Moorhead

Professional Associations
Escambia-Santa Rosa Bar Association
The Florida Bar
Florida Judicial Nominating Commission for the First District Court
of Appeals (Commissioner, Appointed by Governor Jeb Bush)
Christian Legal Society
Rutherford Institute
Attorney's Counsel for the American Subcontractors Association
Attorney's Council for Florida Family Research Council
Florida Council for Construction Specifications Institute

Accomplishments
Phi Kappa Phi
Order of the Coif
R.E. Dorough Scolar, 1984-1986
Jessup International Moot Court Competition, Best Oral Advocate,
Southeast Region, 1985
American Jurisprudence Award in Bankruptcy, Recipient, 1986
Co-Author of CA-8 Expands Reporting Exemption for Church-Affiliated
Organizations, The Journal of Taxation, 1985