City of Homestead v. Johnson

760 So. 2d 80, 25 Fla. L. Weekly Supp. 206, 2000 Fla. LEXIS 544, 2000 WL 283696
CourtSupreme Court of Florida
DecidedMarch 16, 2000
DocketSC91820
StatusPublished
Cited by78 cases

This text of 760 So. 2d 80 (City of Homestead v. Johnson) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Homestead v. Johnson, 760 So. 2d 80, 25 Fla. L. Weekly Supp. 206, 2000 Fla. LEXIS 544, 2000 WL 283696 (Fla. 2000).

Opinion

760 So.2d 80 (2000)

CITY OF HOMESTEAD, Appellant,
v.
Julia L. JOHNSON, etc., et al., Appellees.

No. SC91820.

Supreme Court of Florida.

March 16, 2000.

*81 L. Lee Williams, Jr. of Williams & Gautier, P.A., Tallahassee, Florida, for Appellant.

Robert D. Vandiver, General Counsel, and Diana W. Caldwell, Associate General Counsel, Florida Public Service Commission, Tallahassee, Florida; Mark K. Logan of Smith, Ballard & Logan, P.A., Tallahassee, Florida; and Wilton R. Miller of Bryant, Miller & Olive, Tallahassee, Florida, for Appellees.

QUINCE, J.

We have on appeal a decision by the Public Service Commission (PSC) relating to the interpretation of a territorial agreement for electrical service. We have jurisdiction. See Art. V, § 3(b)(2), Fla. Const. We affirm the PSC's decision which gives Florida Power & Light Company the right to provide electrical service to the disputed territory because the industrial park is not a "city-owned facility" within the meaning of the territorial agreement

In 1967 Florida Power & Light Company (FPL) entered into a territorial agreement (the agreement) with the City of Homestead (the City). The purpose of the agreement was to prevent FPL and the City from duplicating efforts to provide electricity to the City and surrounding areas. The agreement essentially allowed the City to service all the areas located within the City's boundaries as they were defined in the agreement and allowed FPL to service all the surrounding areas. Paragraph 6 of the agreement provided the City and FPL's service areas would remain the same, notwithstanding any growth in the City's boundaries. Paragraph 8[1] contained one exception which allowed the City to furnish service to "city-owned facilities" and facilities owned by agencies which derive their power through and from the City. In the thirty years that have passed since FPL and the City entered into the agreement, the City has almost doubled in size and has vastly grown beyond the boundaries as defined at the time of the agreement. In addition, the parties and others affected by the territorial agreement have been before this Court on four prior occasions.[2]

*82 The present dispute between FPL and the City revolves around an industrial park situated on land owned by the City but located within FPL's service area. The City entered into a long-term lease of unimproved real property within the industrial park with several entities including Contender Boats, Inc.[3] The fifty-year lease allows the lessee to renew for an additional fifty years and grants the lessee an option to purchase the property at a discounted rate. The lessee has constructed a permanent building on the property to conduct business.

The City argues the building is a permanent fixture and, therefore, has become annexed to the property. See Burbridge v. Therrell, 110 Fla. 6, 148 So. 204 (1933)(holding permanent fixtures annexed, actually or constructively, become part of the freehold estate); Greenwald v. Graham, 100 Fla. 818, 130 So. 608 (1930)(same). Thus, the City opines the building is owned by the City, is a "city-owned facility," and falls under the exception in the agreement which allows the City to service "city-owned facilities." FPL argues the City has engaged in a sham lease to avoid the agreement because it has become dissatisfied with its limited service area. FPL contends the plain language of the agreement provides a limited exception for "city-owned facilities," meaning facilities with municipal or governmental functions.

FPL filed a petition with the PSC to enforce the commission's order approving the territorial agreement between FPL and the City. The PSC granted the relief sought by FPL by entering a notice of proposed agency action. The notice indicated the action taken would become final unless a request for a hearing was filed.[4] The City did not request a hearing; therefore, the notice became final on October 20, 1997. The City now challenges the agency action and alleges the City's motion for judgment on the pleadings and motion for final summary judgment should have been granted because the industrial park is a "city-owned facility."

In earlier litigation between these parties we said the PSC has authority over *83 these territorial agreements. In Public Service Commission v. Fuller, 551 So.2d 1210 (Fla.1989), we stated:

[U]nder chapter 89-292, section 2, Laws of Florida (to be codified at section 366.04(2)(e), Florida Statutes (1989)[[5]]), the .OPSC has the power "[t]o resolve, upon petition of a utility or on its own motion, any territorial dispute involving service areas between and among rural electric cooperatives, municipal electric utilities, and other electric utilities under its jurisdiction." We note that the City of Homestead has expressly acknowledged that the PSC has jurisdiction over this territorial agreement, and it has sought enforcement of the agreement under section 366.04(2). See Accursio v. Florida Power and Light Co.

Id. at 1212. Again, in the present litigation, the PSC was asked to determine the boundaries of the territorial agreement and to determine which utility would service customers in a particular area. Thus, the PSC properly determined it had jurisdiction over the matter.

We agree with the PSC's determination that the agreement must be interpreted in light of its stated purpose and that the term "city-owned facility" must be viewed in relation to the other terms and provisions contained within the agreement. Additionally, any ambiguity in the terms should be resolved in favor of upholding the purpose of the agreement and giving effect to every term in the agreement. See Ideal Farms Drainage Dist. v. Certain Lands, 154 Fla. 554, 19 So.2d 234 (1944).

The purpose of the agreement was and is to end duplicate efforts and expenses in supplying electricity to the City and surrounding area. See City of Homestead v. Beard, 600 So.2d 450 (Fla.1982). With this in mind, the PSC found the exceptions contained in paragraph 8 should be narrowly interpreted so that the City and FPL would not duplicate efforts.

There is no question that the land upon which the industrial park was built is owned by the City. Furthermore, it is undisputed that the land is located in the area serviced by FPL. FPL has facilities that are located immediately adjacent to the industrial park. Yet, the City has constructed extensions to its own electrical facilities in order to service this industrial park. From these facts the PSC concluded:

[A]n assessment of the evil to be prevented in entering into the Agreement aids in clarification of the phrase. Ideal Farms Drainage Dist. v. Certain Lands, 154 Fla. 554, 19 So.2d 234 (1944). The purpose of the Agreement was to end the unsatisfactory effects of expensive, competitive activity between the parties. City of Homestead v. Beard, 600 So.2d at 454. If the service area exception were read to allow the City to encroach upon FPL's service territory any time it purchases real property for any purpose, it would only promote expensive, competitive activity, a race to serve, and uneconomic duplication. This result is clearly contrary to the purpose of the Agreement and our mandate, pursuant to Section 366.04, Florida Statutes, to minimize uneconomic duplication.

*84

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760 So. 2d 80, 25 Fla. L. Weekly Supp. 206, 2000 Fla. LEXIS 544, 2000 WL 283696, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-homestead-v-johnson-fla-2000.