Florida Power Corp. v. City of Winter Park

827 So. 2d 322, 2002 Fla. App. LEXIS 13475, 2002 WL 31093938
CourtDistrict Court of Appeal of Florida
DecidedSeptember 19, 2002
Docket5D01-2470, 5D02-87
StatusPublished
Cited by4 cases

This text of 827 So. 2d 322 (Florida Power Corp. v. City of Winter Park) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Florida Power Corp. v. City of Winter Park, 827 So. 2d 322, 2002 Fla. App. LEXIS 13475, 2002 WL 31093938 (Fla. Ct. App. 2002).

Opinion

827 So.2d 322 (2002)

FLORIDA POWER CORPORATION, Appellant,
v.
CITY OF WINTER PARK, Florida, Appellee.

Nos. 5D01-2470, 5D02-87.

District Court of Appeal of Florida, Fifth District.

September 19, 2002.

*323 Sylvia H. Walbolt, Robert W. Pass, James Michael Walls, and Joseph H. Lang, Jr., of Carlton Fields, P.A., Tallahassee, and R. Alexander Glenn, Associate General Counsel, Progress Energy Service Co., LLC, St. Petersburg, for Appellant.

Gordon H. Harris, Thomas A. Cloud and Tracy A. Marshall, of Gray, Harris & Robinson, P.A., Orlando, for Appellee.

HARRIS, J.

This case involves an electrical system originally built by the City of Winter Park (appellee herein) and ultimately sold to the predecessor of Florida Power Corporation (appellant herein). That sales agreement and accompanying franchise agreement, as well as all subsequent franchise agreements, contained a "right to buy back" provision and a franchise fee negotiated by the parties, the most recent fee being 6% of gross receipts based on the sale of electricity within the city. When the most recent franchise agreement expired by its terms, renegotiations reached an impasse. Florida Power remained in possession of the city's rights-of-way and continued to operate as though the franchise agreement was still in existence but refused to pay the previously negotiated fee. The City sued seeking an injunction to require Florida Power to pay the fee as a holdover franchisee during the term of protracted negotiations or (as is now the case) arbitration. The trial judge granted the injunction which in effect continues the status quo of the parties' relationship under the previous franchise agreement during this holdover period. We affirm.

Florida Power gives two reasons for reversal: one, since an action for damages is available an injunction is an improper remedy and two, the supreme court in Alachua County v. State, 737 So.2d 1065 (Fla. 1999), held that the unilateral imposition of a fee (since the franchising agreement has expired) charged to a franchisee for the use of public property which fee is unrelated to the cost of maintaining such public property is an unconstitutional tax.[1]

*324 A reading of Alachua convinces us that its result would have been different had the fee charged by the County in fact been based on a previously negotiated fee for the franchise rights agreed to by the parties. In other words, if a franchisee and a governing body agree to a reasonable fee for access to the city's residents and the use of the public property to provide services during the term of the franchise then such fee has not been "unilaterally imposed" and will be enforced during a holdover period in which renegotiation occurs. In this case, Florida Power does not challenge the reasonableness of the franchise fee even during these stalemated negotiations. To interpret Alachua as Florida Power suggests would mean that any franchise fee negotiated by the parties which is not directly related to the cost of providing maintenance to the franchise property is invalid and unenforceable.

The supreme court in City of Pensacola v. Southern Bell Tel. Co., 49 Fla. 161, 37 So. 820, 824 (1905), held:

[M]unicipalities which have the power and are charged with the duty of regulating the use of their streets may impose a reasonable charge in the nature of a rental, for the occupation [of such property].[2]

Thus, the supreme court has analogized the obligations between a franchiser and a franchisee as similar to those in a landlord/tenant relationship. And we believe it immaterial that this dispute arises after the end of the franchise period so long as the franchisee remains in possession of the property with the consent of the franchiser. In a normal landlord/tenant relationship, Florida Power would have become a holdover tenant subject to a claim for double rental. However, as the court stated in Lincoln Oldsmobile, Inc. v. Branch, 574 *325 So.2d 1111 (Fla. 2d DCA 1990), "Absent such a demand [a demand for double rental], or other affirmative action on the part of the landlord, the tenant becomes a tenant at sufferance at the original rent." Id. at 1113. Why should not Florida Power be treated as a holdover franchisee subject to the previously agreed rental as the trial court held? Instead of bringing an eviction action which is a normal landlord alternative, an alternative not available in this case, the City accepted Florida Power as a tenant at sufferance (until a new franchise agreement could be negotiated or arbitration completed) at the original "rent."

An injunction is a proper remedy under the facts of this case. It is clear that the purpose of the injunction is to maintain the bargained-for relationship which existed during the term of the franchise while the parties attempt to negotiate an extension of that agreement or a buyout of the system.

In Precision Tune Auto Care, Inc. v. Radcliff, 731 So.2d 744 (Fla. 4th DCA 1999), the court recalled that "[i]n Burger Chef [Systems Inc. v. Burger Chef of Florida, Inc., 317 So.2d 795 (Fla. 4th DCA 1975) ], we recognized that temporary injunctions can be appropriate in franchise cases in order to preserve the status quo during the ongoing litigation." Id. at 746. In City of Oviedo v. Alafaya Utilities, Inc., 704 So.2d 206 (Fla. 5th DCA 1998), this court upheld an injunction preventing the city from withholding development by its long-time franchisee because the franchisee would not enter into a franchise agreement dictated by the City. We did so over the objections of the City that an injunction was inappropriate because damages were available. We noted that in determining whether damages would be an adequate remedy we should look at the impact that the challenged action, if not enjoined, would have on others. Furthermore, in Dotolo v. Schouten, 426 So.2d 1013 (Fla. 2d DCA 1983), the court held that "[t]he prevention of continuing wrongs is a well recognized basis for injunctive relief, as is the prevention of a multiplicity of suits." Id. at 1015 (citing 29 Fla.Jur.2d Injunctions § 15; 22 Fla.Jur.2d Equity §§ 15, 16).

In this case, by withholding the franchise fee, a fee charged to and collected from its customers, Florida Power is in a position to extort favorable terms from the city. The city's expenses for maintaining its property and regulating the utility continue unabated while the payments of the franchise fee are being withheld. The city must either give in to the demands of Florida Power, impose higher taxes on its citizens, or dip into its reserves to meet costs which should be paid by the users of electricity. As in City of Oviedo, we should look at the possible effect on others of the challenged action sought to be enjoined. General taxpayers should not be required to pay obligations more properly owed by users of the system being regulated. If the franchise fee is subsequently approved and retroactively applied, the user base will almost certainly not be the same because old users will have moved out and new users will have moved in. And all the citizens may suffer if to avoid new taxes or having to dip into reserves the city agrees to a bad deal. In short, an injunction under these circumstances is fair and reasonable (it merely requires Florida Power to pass on to the city the fees collected from the electricity customers) and lawful in that it maintains the status quo during an impasse in negotiations.

We certify conflict with Florida Power Corp. v. Town of Belleair,

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Related

Town of Belleair v. Florida Power Corp.
897 So. 2d 1261 (Supreme Court of Florida, 2005)
Florida Power Corp. v. City of Winter Park
887 So. 2d 1237 (Supreme Court of Florida, 2004)
Montana-Dakota Utilities Co. v. City of Billings
2003 MT 332 (Montana Supreme Court, 2003)

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Bluebook (online)
827 So. 2d 322, 2002 Fla. App. LEXIS 13475, 2002 WL 31093938, Counsel Stack Legal Research, https://law.counselstack.com/opinion/florida-power-corp-v-city-of-winter-park-fladistctapp-2002.