Madison Highlands v. Florida Housing

220 So. 3d 467

• Court: District Court of Appeal of Florida
• Decided: February 20, 2017
• Docket: 5D16-1035
• Status: Published

Opinion

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

MADISON HIGHLANDS, LLC AND AMERICAN RESIDENTIAL DEVELOPMENT, LLC,

Appellants,

v. Case No. 5D16-1035

FLORIDA HOUSING FINANCE CORPORATION, SP GARDENS, LLC, WEST RIVER PHASE 2, LP AND WEST RIVER 1A, LP,

Appellees.

________________________________/

Opinion filed February 24, 2017

Administrative Appeal from the Florida Housing Finance Corporation.

Kenneth B. Bell, of Gunster, Yoakley & Stewart, P.A., Tallahassee, James W. Middleton, of James W. Middleton, PLLC, Jacksonville Beach, Michael G. Maida, of Michael G. Maida, P.A., Tallahassee, J. Timothy Schulte and Sarah Lindquist Pape, of Zimmerman, Kiser, & Sutcliffe, P.A., Orlando, William S. Bilenky and Douglas P. Manson, of Manson Bolves Donaldson Varn, P.A., Tampa, for Appellants.

Chris McGuire, Tallahassee, for Appellee, Florida Housing Finance Corporation.

Stacy D. Blank, of Holland & Knight LLP, Tampa, and Lawrence E. Sellers, Jr., of Holland & Knight LLP, Tallahassee, for Appellee, SP Gardens, LLC Michael P. Donaldson, of Carlton, Fields Jordan Burt, P.A., Tallahassee, for Appellee, West River 1A. LP and West River Phase 2, LP.

ORFINGER, J.

Madison Highlands, LLC and American Residential Development, LLC

(collectively “Madison Highlands”) appeal a final order of the Florida Housing Finance

Corporation (“FHFC”) dismissing its first and second amended petitions for a formal

administrative proceeding pursuant to sections 120.569 and 120.57, Florida Statutes

(2016). We conclude that the doctrine of equitable tolling allows for the consideration of

Madison Highlands’s second amended petition, which was legally sufficient and

demonstrated standing under Agrico Chemical Co. v. Department of Environmental

Regulation, 406 So. 2d 478, 479 (Fla. 2d DCA 1981). Accordingly, we reverse the final

order and remand for an administrative hearing pursuant to section 120.57, Florida

Statutes (2016).

The FHFC is the state agency designated to allocate and distribute low-income

housing tax credits that the United States Treasury annually makes available to the states

for various programs, including the State Housing Tax Credit Program (the “Program”).

See § 420.5099, Fla. Stat. (2016). Because the demand for housing credit funding

exceeds available allocations under the Program, qualified affordable housing developers

must compete for the funding. The competitive process is initiated when the FHFC issues

a Request for Applications (“RFA”), and interested developers respond by submitting

applications. Madison Highlands participates in the Program and competes for this

funding.

2 The FHFC issued RFA 2015-107 for an award of tax credits for the development

of affordable housing projects in several counties, including Hillsborough County, where

only one development would be funded. Madison Highlands and others submitted

applications, and in time, the FHFC posted a notice identifying SP Gardens, LLC

(“Laburnum Gardens”) as the applicant to which it intended to award the tax credits for

the Hillsborough County development. Madison Highlands timely filed a written protest

to the notice and petitioned for an administrative hearing.1

The FHFC issued an Order Dismissing the Petition with Leave to Amend, finding

that Madison Highlands’s first amended petition did not comply with Florida Administrative

Code Rule 28-106.201(2)(e)-(f) as it did not include:

(e) A concise statement of the ultimate facts alleged, including the specific facts the petitioner contends warrant reversal or modification of the agency’s proposed action; [and]

(f) A statement of the specific rules or statutes the petitioner contends require reversal or modification of the agency’s proposed action, including an explanation of how the alleged facts relate to the specific rules or statutes . . . .

The Order Dismissing the Petition with Leave to Amend gave Madison Highlands until

March 4, 2016, to file an amended petition and stated that the “[f]ailure of [Madison

Highlands] to file an amended petition within this time shall be considered a waiver of its

rights to file any administrative challenge in this matter.”

At 5:36 p.m. on March 4, 2016, Madison Highlands filed its second amended

petition by electronic mail, again protesting the notice and petitioning for an administrative

1 Four applicants, including Laburnum Gardens, scored equally in the FHFC’s evaluation matrix. Consequently, Laburnum Gardens was selected by lot. Madison Highlands’s application had a lower score, and was the next ranked applicant.

3 hearing. The FHFC subsequently entered a Final Order that dismissed the second

amended petition with prejudice, concluding that the second amended petition was

untimely filed thirty-six minutes late and Madison Highlands had not demonstrated that

the doctrine of equitable tolling applied. The FHFC further determined that even if timely,

the second amended petition failed to establish that Madison Highlands had standing to

protest the preliminary award because it did not contain adequate allegations against all

of the four higher-ranked applicants that, if proven, would result in Madison Highlands

being ranked highest. Madison Highlands challenges these determinations.

We review an agency’s conclusions of law de novo. Parlato v. Secret Oaks

Owners Ass’n, 793 So. 2d 1158, 1162 (Fla. 1st DCA 2001). We agree with the FHFC

that the second amended petition was untimely. Section 120.54(5), Florida Statutes

(2016), requires the Administration Commission to adopt uniform rules of procedure to

replace the multiple rules in the administrative code promulgated by the various agencies.

See Fla. Pub. Emps. Council 79, AFSCME, AFL-CIO v. Jacksonville Emps. Together,

738 So. 2d 489, 491 (Fla. 1st DCA 1999). The Uniform Rules provide, in relevant part,

that “[a]ny document received by the office of the agency clerk before 5:00 p.m. shall be

filed as of that day but any document received after 5:00 p.m. shall be filed as of 8:00

a.m. on the next regular business day.” Fla. Admin. Code R. 28-106.104(3). However,

the FHFC has published its own rule, Florida Administrative Code Rule 67-52.002(3),

which specifies that when a petition is sent to its clerk by electronic mail, it “shall be

accepted on the date transmitted.” Such a rule cannot serve as an exception to the

Uniform Rules because the Administration Commission has not approved it as an

exception to the time deadline set forth in rule 28-106.104(3). § 120.54(5)(a), Fla. Stat.

4 Holdings, LLC, 53 So. 3d at 1162; see Palm Beach Cty. Envtl. Coal. v. Fla. Dep’t of Envtl.

Prot., 14 So. 3d 1076, 1078 (Fla. 4th DCA 2009) (explaining that question of whether

party has standing is different from question of whether party will be able to prove its

case). Madison Highlands’s second amended petition set forth sufficient allegations,

which, taken as true, substantially complied with rule 28-106.201(e) and (f). We reverse

and remand for an administrative hearing.

REVERSED AND REMANDED.

TORPY, J., and THOMPSON, E.R., Senior Judge, concur.

10 amended petition, delivered by electronic mail, would be deemed filed the date it was

transmitted, in this case, March 4, 2016. Madison Highlands claims it was not informed

that FHFC rule 67-52.002(3) was not an approved exception to the Uniform Rules and

neither the FHFC website nor the Order Dismissing the Petition with Leave to Amend

cited to rule 28-106.104(3) or referenced the time cutoff provisions found in the Uniform

Rules. Although FHFC had, on other occasions, included specific submittal times in

certain situations, it did not do so here.

Madison Highlands does not assert that it requested this information from FHFC

or had any discussion with the FHFC concerning the applicability of the Uniform Rules.

Indeed, Madison Highlands was aware that the Uniform Rules would apply to petitions

filed with the FHFC since it referenced the Uniform Rules numerous times in its second

amended petition, and never referenced chapter 67-52. Notwithstanding, we conclude

that the FHFC affirmatively “lulled or misled” Madison Highlands into relying on rule 67-

52.002. Madison Highlands’s mistake was based on the FHFC’s act of publishing FHFC

Rule 67-52.002(3) on its website without also publishing or referencing Uniform Rule 28-

106.104(3), but then applying the 5:00 p.m. time deadline from the Uniform Rules to

Madison Highlands’s petition.

Equitable tolling does not require active deception or agency misconduct, but

focuses rather on the applicant with a reasonably prudent regard for his rights. See, e.g.,

Machules, 523 So. 2d at 1134; see also Pro Tech Monitoring, Inc., 72 So. 3d 277

(applying equitable tolling to disappointed bidder’s late filed formal bid protest petition

where bidder alleged that petition was timely delivered to department’s security guard,

who prevented bidder from delivering petition directly to clerk’s office and instead

6 accepted petition, stamped it with department-issued time and date stamp, and

affirmatively led bidder to believe that no further action was required). In addition, no

prejudice was shown because the opposing parties were on notice that Madison

Highlands intended to file the second amended petition. See Machules, 523 So. 2d at

1137 (finding that opposing party was not prejudiced by petition that was filed one day

late when opposing party “obviously was on notice that petitioner intended to appeal”).

We also agree with Madison Highlands that the FHFC erred in ruling that it had not

shown standing under the Agrico test. “Whether a party has standing to bring an action

is a question of law that is to be reviewed de novo.” Mid-Chattahoochee River Users v.

Fla. Dep’t of Envtl. Prot., 948 So. 2d 794, 796 (Fla. 1st DCA 2006) (citing Hospice of Palm

Beach Cty., Inc. v. State, Ag. for Health Care Admin., 876 So. 2d 4, 7 (Fla. 1st DCA

2004)). An administrative agency’s action may be set aside if “[t]he agency has

erroneously interpreted a provision of law and a correct interpretation compels a particular

action . . . .” § 120.68(7)(d), Fla. Stat. (2016). Moreover, the standing issue in this case

involves the application of general principles of administrative law. Therefore, we need

not give any deference to the legal analysis in the final order on this issue. S. Broward

Hosp. Distr. v. State, Ag. for Health Care Admin., 141 So. 3d 678, 681 (Fla. 1st DCA

2014); see Ft. Myers Real Estate Holdings, LLC v. Dep’t of Bus. & Prof’l Reg., Div. of

Pari–Mutuel Wagering, 53 So. 3d 1158, 1160 (Fla. 1st DCA 2011); Doyle v. Dep’t of Bus.

Reg., 794 So. 2d 686, 690 (Fla. 1st DCA 2001).

The Agrico decision provides a two-prong test to determine when a challenger to

agency action meets the “substantial interest” element found in section 120.52(13)(b),

Florida Statutes (2016). The Agrico test requires the challenger to demonstrate “1) that

7 he will suffer injury in fact which is of sufficient immediacy to entitle him to a section 120.57

hearing, and 2) that his substantial injury is of a type or nature which the proceeding is

designed to protect.” Agrico, 406 So. 2d at 482. “The first aspect of the test deals with

the degree of injury. The second deals with the nature of the injury.” Id. Under the first

prong of Agrico, the injury must be actual or immediate, and not based on a hypothetical

scenario. See S. Broward Hosp. Dist., 141 So. 3d at 681-82; Vill. Park Mobile Home

Ass’n v. State, Dep’t of Bus. Reg., 506 So. 2d 426, 433 (Fla. 1st DCA 1987). “With respect

to the second prong, this factor usually requires that ‘the injury is of the type that the

statute pursuant to which the agency has acted is designed to protect.’” Menorah Manor,

Inc. v. Ag. for Health Care Admin., 908 So. 2d 1100, 1104 (Fla. 1st DCA 2005) (quoting

Fairbanks, Inc. v. State, Dep’t of Transp., 635 So. 2d 58, 59 (Fla. 1st DCA 1994)).

To have standing to challenge the proposed award of a public contract, an

applicant must have a substantial interest to be determined in the case. Preston Carroll

Co. v. Fla. Keys Aqueduct Auth., 400 So. 2d 524, 525 (Fla. 3d DCA 1981); see §

120.57(3)(b), Fla. Stat. (2016). The second lowest bid establishes that substantial

interest because if the lowest bid is disqualified, the second lowest bid may receive the

award. See Preston Carroll Co., 400 So. 2d at 525 (holding that unsuccessful bidder did

not establish substantial interest entitling it to challenge highest bidder where testimony

showed it was not second lowest bidder and would not receive award even if challenge

was successful). An applicant who submits the fifth lowest bid does not have a substantial

interest, unless the applicant can establish that the four higher-ranked applications must

all be rejected or re-evaluated, resulting in the protesting filer being ranked highest. See

Preston Carroll Co., 400 So. 2d at 525; Louis Berger Grp., Inc. v. Fla. Div. of Emerg.

8 Mgmt., Case No. 15-2537 BID (Fla. DOAH June 10, 2015; Fla. FDEM July 10, 2015)

(relying on Preston Carroll Co. in explaining that unsuccessful bidder was required to

demonstrate that all seven bidders ahead of it would be disqualified in order to

demonstrate standing); see also Brasfield & Gorrie Gen. Contractor, Inc. v. Ajax Constr.

Co. of Tallahassee, 627 So. 2d 1200, 1203 n.1 (Fla. 1st DCA 1993) (noting that

unsuccessful bidder finished seventh out of seven bids made, which “hardly lends

credence” to unsuccessful bidder’s argument that it had interest substantial enough to

establish standing).

We find that Madison Highlands has alleged a substantial interest and has met

both prongs of the Agrico test. Under the first prong, Madison Highlands has established

a real and immediate injury, as its second amended petition alleges that the applications

of the four higher-ranked applicants had deficiencies and that if the FHFC had properly

scored or considered the higher-ranked applicants, it would have been awarded the

housing tax credits for the Hillsborough County development. Madison Highlands has

also established that the injury, i.e., being denied the allocation of the housing tax credits,

is the type that the proceedings were designed to protect.

In considering the dismissal of a petition for a hearing under section 120.57, Florida

Statutes, an agency must “accept as true the factual allegations of the petitions and may

not consider any factual matters outside the amended petitions.” St. Francis Parkside

Lodge of Tampa Bay v. Dep’t of Health & Rehab. Servs., 486 So. 2d 32, 34 (Fla. 1st DCA

1986). The question of whether the petitioner may ultimately be able to prove the

allegations in its petition is a question to be determined at the administrative hearing, not

at the pleading stage on an order of dismissal by the agency. Ft. Myers Real Estate

9 Holdings, LLC, 53 So. 3d at 1162; see Palm Beach Cty. Envtl. Coal. v. Fla. Dep’t of Envtl.

Prot., 14 So. 3d 1076, 1078 (Fla. 4th DCA 2009) (explaining that question of whether

party has standing is different from question of whether party will be able to prove its

case). Madison Highlands’s second amended petition set forth sufficient allegations,

which, taken as true, substantially complied with rule 28-106.201(e) and (f). We reverse