Wald v. SARASOTA CTY. HEALTH FACILITIES, ETC.

360 So. 2d 763
CourtSupreme Court of Florida
DecidedJune 15, 1978
Docket52811
StatusPublished

This text of 360 So. 2d 763 (Wald v. SARASOTA CTY. HEALTH FACILITIES, ETC.) 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
Wald v. SARASOTA CTY. HEALTH FACILITIES, ETC., 360 So. 2d 763 (Fla. 1978).

Opinion

360 So.2d 763 (1978)

Sheldon G. WALD, Appellant,
v.
SARASOTA COUNTY HEALTH FACILITIES AUTHORITY, a Body Politic and Corporate Organized and Existing under and by Virtue of the Laws of the State of Florida, Appellee.

No. 52811.

Supreme Court of Florida.

June 15, 1978.

*765 David Epstein of Berry, Epstein, Sandstrom & Blatchford, Washington, D.C., and Russell A. Meade of Meade & Dick, Sarasota, for appellant.

Richard E. Nelson of Nelson, Hesse, Cyril, Weber & Sparrow, Sarasota, and John L. McWilliams, III of Freeman, Richardson, Watson, Slade, McCarthy & Kelly, Jacksonville, for appellee.

SUNDBERG, Justice.

This is a direct appeal from the final judgment of the Circuit Court for Sarasota County, Florida, validating certain revenue bonds. We have jurisdiction. Article V, Section 3(b)(2), Florida Constitution; Section 75.08, Florida Statutes (1975); Florida Appellate Rule 2.1 a(5). See also Florida Rules of Appellate Procedure 9.030(a)(1).

Appellee, Sarasota County Health Facilities Authority (the Authority), was created pursuant to Part III, Chapter 154, Florida Statutes (1975), the Health Facilities Authorities Law, through an ordinance adopted by the Board of County Commissioners of Sarasota County. The Authority was created for the purpose of assisting health facilities situated in Sarasota County in the acquisition, construction, financing and refinancing of projects in the County. Pursuant to the ordinance, a Citizens Advisory Committee (the Committee) was appointed to provide recommendations to the Authority with regard to the creation of health facilities, their financing, operation and management and all matters related thereto. Following public meetings and consideration of a proposed financing plan and feasibility study, the Committee made a written recommendation to the Authority that a bond issue be undertaken to finance the construction of improvements to the Sarasota County Memorial Hospital Association, Inc., doing business as Venice Hospital (hereinafter referred to as Venice Hospital). The improvements include a third floor addition to the hospital and the construction, by shelling in only, of a fourth floor addition. A portion of the proceeds of the bond issue are to be utilized to refinance temporary financing undertaken by the hospital to commence construction of the third and fourth floor improvements, and to refinance old debts incurred in connection with the existing two floors of the hospital. The recommendation of the Committee also stated that Venice Hospital is a not-for-profit Florida corporation.

On August 9, 1977, in reliance upon the recommendation of the Committee, the Authority adopted a resolution authorizing the *766 issuance of revenue bonds. The resolution contains a proposed lease agreement and trust indenture and sets forth a financing plan. The financing plan contemplates that all of the hospital facilities of Venice Hospital will be conveyed to the Authority and leased back to the hospital for rental payments sufficient to pay the principal of, premium, if any, and interest on the bonds issued by the Authority. In addition, to secure such rents the Authority will be granted a security interest in the gross revenues of the hospital including the contract rights of the hospital to receive such gross revenues. As security for payment of the bonds all of the Authority's interest in the lease will be assigned to a trustee for the benefit of bondholders pursuant to the terms of the trust indenture. The resolution provides with respect to the bonds, inter alia:

The Bonds shall be payable solely from and secured by a prior lien upon and pledge of the proceeds to be derived by the Authority from the lease of the Project by the Authority to [Venice Hospital] pursuant to the provisions of the Lease Agreement. The Bonds shall not be or constitute general obligations or indebtedness of the Authority, Sarasota County or the State of Florida within the meaning of Article VII, Section 12 of the Constitution of the State of Florida, or otherwise, but shall be payable solely from the aforesaid special funds.

A complaint seeking validation of the public revenue bonds was filed by appellee in the Circuit Court for Sarasota County, Florida. Appellant, Sheldon G. Wald, intervened in the bond validation proceeding in the circuit court. We deem it necessary to address only four of the issues raised by him in the lower court. First, appellant argues that by virtue of Article VII, Section 10(c), Florida Constitution, the Authority lacks the power to lend its credit by issuing public revenue bonds for a private enterprise which does not fall within one of the exceptions enumerated in that constitutional provision. Second, appellant attempted to introduce evidence that a pattern of discrimination exists at the hospital with regard to the admission of applicants for medical staff privileges. This allegation, if proven, would purportedly result in the loss of the hospital's tax-exempt status as a charitable organization under Section 501 of the United States Internal Revenue Code, which status the hospital must arguably retain in order to qualify for revenue bonds under Article VII, Section 10(c), Florida Constitution. Appellant's third contention is that the alleged discriminatory conduct renders the hospital no longer eligible for status as a corporation organized not-for-profit under Chapter 617, Florida Statutes (1975). Consequently, posits appellant, the hospital does not constitute a health facility, which is defined by Section 154.205(8), Florida Statutes (1975), as "any private corporation organized not-for-profit and authorized by law to provide hospital ... services... ." Because Section 154.219, Florida Statutes (1975), permits the issuance of revenue bonds only for the acquisition of a "health facility," the bonds could not properly issue for the Venice Hospital project. Appellant's fourth point is grounded upon the proposition that, due to the profit-making nature of the hospital, construction of the improvements purportedly fails to serve a paramount public purpose as required by Article VII, Section 10(c), Florida Constitution.

The circuit judge declined to admit evidence of the alleged discriminatory practices of Venice Hospital and, on October 13, 1977, entered a final judgment validating the revenue bonds. In the final judgment, the circuit judge found that the Venice Hospital project and refinancing are in the public interest and that the facility is a not-for-profit Florida corporation. The judgment further recites that the bonds will be payable from the revenues generated by the hospital facility and that "no holder or holders of any of the bonds or any coupons appertaining thereto shall ever have the right to compel the exercise of any ad valorem taxing power to pay the bonds or the interest thereon... ."

For the reasons hereinafter stated, we conclude that the circuit judge was eminently *767 correct in declining to receive the evidence in issue and that the judgment validating the public revenue bonds is proper.

Article VII, Section 10 of the Constitution of the State of Florida (1968), provides as follows:

Pledging credit. — Neither the state nor any county, school district, municipality, special district, or agency of any of them, shall become a joint owner with, or stockholder of, or give, lend or use its taxing power or credit to aid any corporation, association, partnership or person; but this shall not prohibit laws authorizing:
(a) the investment of public trust funds;

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Wald v. Sarasota County Health Facilities Authority
360 So. 2d 763 (Supreme Court of Florida, 1978)

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Bluebook (online)
360 So. 2d 763, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wald-v-sarasota-cty-health-facilities-etc-fla-1978.