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Nikolits v. Haney

Florida Court of Appeals, Fourth District

May 31, 2017

GARY R. NIKOLITS, as Property Appraiser for Palm Beach County, Appellant,
FRANKLIN L. HANEY, EMELINE W. HANEY and ANNE M. GANNON, as Tax Collector for Palm Beach County, Florida, Appellees.

         Not final until disposition of timely filed motion for rehearing.

         Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Edward L. Artau, Judge; L.T. Case No. 2014CA005416XXXXMB.

          Neil B. Jagolinzer and Jeffrey M. Clyman, West Palm Beach, for appellant.

          Jane Kreusler-Walsh and Stephanie L. Serafin of Law Office of Kreusler-Walsh, Compiani & Vargas, P.A., West Palm Beach, and Christopher M. Larmoyeux of Larmoyeux & Bone, P.L., West Palm Beach, for appellees Franklin L. Haney and Emeline W. Haney.

          Pamela Jo Bondi, Attorney General, and Jeffrey M. Dikman, Assistant Attorney General, Tallahassee, for Amicus Curiae State of Florida Department of Revenue.

          Warner, J.

         The property appraiser appeals a final judgment in favor of homeowners declaring null and void corrections in property value made by the appraiser for tax years 2011-13 on the appellees' homestead property, due to the appraiser's successful appeal of the Value Adjustment Board's lowering of the value for the 2010 assessments. The appraiser argues that the corrections made to the 2011-13 tax year assessed values as a result of the circuit court's upward adjustment of the value of the homestead for 2010 were ministerial and allowable. We agree that the statutes and rules allow for corrections to subsequent years' values, which constitute mathematical corrections. However, the homeowners had the right to challenge the corrected valuations as being greater than market value, of which right they were deprived. We thus reverse and remand to allow for the correction of the valuations and also for new notifications to allow the homeowners their right to petition the Value Adjustment Board to contest the new valuations.

         In 2008, the appellee homeowners purchased property in Palm Beach County for $23, 500, 000 and expended another $2, 800, 000 for improvements. They were given a homestead tax exemption for 2009. In 2010, the property appraiser's office assessed the property at a market value of $19, 780, 167, which prompted the homeowners to petition the Value Adjustment Board ("VAB") to reduce the assessment. Even though they had invested more than $24, 000, 000 in the property, they claimed that their homestead was worth only $12, 000, 000 due to a downturn in the real estate market. The VAB reduced the market value to $12, 000, 000. As required by section 193.122(3), Florida Statutes (2010), the property appraiser re-certified the tax roll after the VAB revision to $12, 000, 000. Exercising the right to challenge the VAB decision, the property appraiser filed an original action in the circuit court pursuant to sections 193.122(4) and 194.036(1)(a), Florida Statutes (2010).

         Because the property was a homestead, the Save Our Homes provision of section 193.155(1), Florida Statutes (2010), applied to any increases in the property's value. The Save Our Homes cap allows an annual increase of only 3% in the assessed value of property, or the yearly increase in the Consumer Price Index, whichever is less. Under section 193.155(2), Florida Statutes, if the capped value exceeds the market value in a given year, the capped value will be reduced to the market value. Thus, the 2010 capped value of the homeowners' homestead was lowered from $19, 780, 167 to $12, 000, 000.

         While the property appraiser's suit challenging the VAB reduction in value was pending, the property appraiser's office applied the Save Our Homes cap to the VAB value of $12, 000, 000 for subsequent years so that the property's value for tax purposes was capped at $12, 180, 000 in 2011, $12, 545, 400 in 2012, and $12, 758, 672 in 2013. Despite this reduction in valuation due to the VAB change, the property appraiser's office still provided Truth in Millage ("TRIM") notices to the homeowners showing the market (just) value of the property to be $17, 865, 887 in 2011, $17, 762, 500 in 2012, and $19, 614, 912 in 2013. The TRIM notices thus provided three different values for the property: the market value estimated by the Property Appraiser, the capped or assessed value, and the taxable value.

         The pending suit by the property appraiser led to a final judgment in 2014 rejecting the VAB's $12, 000, 000 assessment, as well as the property appraiser's assessment of $19, 780, 167. The court found that the proper market value was $17, 500, 000. Neither side appealed the court's judgment.

         Thereafter, the property appraiser concluded that the capped values for 2011 through 2013 required recalculation since they had initially been calculated based on the now-discarded $12, 000, 000 assessment. The property appraiser filed three Certificates of Correction to revise the 2011, 2012 and 2013 tax rolls. This changed the 2010 market value and assessed values to $17, 150, 000, and the capped valuations for the ensuing years were raised accordingly. As a result of the Certificates of Correction, the homeowners' taxes increased over $90, 000 for each of the three tax years.

         The homeowners then filed a declaratory judgment action against the property appraiser and tax collector to dispute the right to the additional taxes. The property appraiser responded by pointing out that the final judgment had increased the market value assessment in 2010 from $12, 000, 000 to $17, 150, 000. Revision of the subsequent years' valuations constituted a mathematical correction authorized by Florida Administrative Code Rule 12D-8.021(2)(a)6, through the issuance of a Certificate of Correction.

         In its ruling on the declaratory judgment, the court rejected the property appraiser's argument that he was seeking to correct a clerical, administrative, mathematical, or factual error other than an error in judgment. The court found it was not an "error of omission or commission" under Florida Administrative Code Rule 12D-8.021(2)(a)(12), concluding that the rule seeks to prevent issuance of Certificates of Correction for errors of judgment. The court reasoned that the VAB, as well as the final judgment, were simply correcting an error in judgment as to the original valuation by the property appraiser, and the subsequent corrections were "seeking to make corrections based on a change in value due to an error in judgment." The court also concluded that the property appraiser violated due process because he failed to provide the homeowners with notice and opportunity to challenge the corrections for 2011-13. The court ...

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