Pipeline Contractors, Inc., a Florida corporation, and The Hanover Insurance Company, a New Hampshire corporation, Appellants,
Keystone Airpark Authority, a political subdivision of the City of Keystone Heights, and Passero Associates, L.L.C., a Florida limited liability company, Appellees.
final until disposition of any timely and authorized motion
under Fla. R. App. P. 9.330 or 9.331.
appeal from the Circuit Court for Clay County. Don H. Lester,
L. Worthy, Donald A. Niesen, and Christopher W. Lewis of
Niesen, Price, Worthy, Campo, P.A., Gainesville, for
J. Taylor Jr. and Katelyn T. Hardwick of the Taylor Law Firm,
P.A., Keystone Heights, for Appellees.
Contractors, Inc., (Pipeline) and The Hanover Insurance
Company (Hanover) challenge the trial court's
determination that Keystone Airpark Authority (KAA) had
capacity to contract, to sue, and to be sued. We agree with
the trial court that estoppel applies to preclude this
argument and affirm the final judgment in favor of KAA.
2008, Pipeline and KAA entered into a contract for the
construction of new airport facilities at the Keystone
Airpark. Pipeline's performance was guaranteed by a bond
issued by Hanover. KAA did not pay everything that Pipeline
asserted it was entitled to under the construction contract,
and in 2010, Pipeline sued KAA for breach of contract. KAA
counterclaimed for breach of contract based on defects in the
work, and KAA filed a third-party complaint against Hanover
seeking relief under the performance bond.
happened in the litigation for some six years. Then Pipeline
and Hanover amended their answer and moved for summary
judgment on KAA's claims, asserting for the first time
that KAA's lawsuit should be dismissed because KAA was
not a legal entity and did not have the capacity to contract,
sue, or be sued. In short, the argument was that under the
Uniform Special District Accountability Act of 1989 (Chapter
189, Fla. Stat. (1991)), any special district comprising more
than one county required the Legislature's authorization.
All of the KAA district was within the city limits of
Keystone Heights, but the KAA district extended from Clay
County west into Bradford County. Nonetheless, when the KAA
was formed in 1991, only the City of Keystone Heights, and
not the Legislature, acted in establishing it.
1992, the Legislature amended the law to provide that
legislative approval is not required for special districts
comprising more than one county, so long as the entire
district is within a single municipality. See §
189.403(3), Fla. Stat. (1992); cf. Forsythe v. Longboat
Key Beach Erosion Control Dist., 604 So.2d 452, 455-56
(Fla. 1992) (holding that the pre-amendment version's
plain text provided that a special district with territory in
multiple counties was an independent special district
requiring legislative authorization). Pipeline and Hanover
contended that the legislative change did not cure the defect
in KAA's earlier formation.
trial court rejected the lack of capacity defense, concluding
that the court could deny Pipeline and Hanover's summary
judgment motion without resolving whether KAA was validly
created or whether it later had the right to contract, sue,
or be sued. Instead, the court decided, because there was
"no question that Pipeline and Hanover [had] received
the benefits of the questioned contracts," Pipeline and
Hanover were estopped from "challenging KAA's
capacity to contract." After a seven-day bench trial,
the trial court entered a final judgment in favor of
and Hanover now appeal the trial court's denial of
summary judgment. Arguing that the trial court's
application of estoppel was in error, Pipeline and Hanover
contend that the court should have reached the merits of
their argument regarding KAA's capacity and ruled in
their favor. Pipeline and Hanover ask us to reverse the trial
court on the issue of estoppel and remand the case with
directions to vacate the final judgment and dismiss all
claims between the parties.
trial court relied on Booske v. Gulf Ice Co., 5 So.
247 (Fla. 1888), in determining that estoppel applied. At
issue in Booske was a contract between individuals
and a corporation. Id. at 248. There was also a
surety bond guaranteeing performance. Id. After
litigation ensued, the principal and obligor on the bond
cited Gulf Ice Company's improper corporate creation in
arguing that they should be immune from liability on the
contract. Id. at 250-51. In rejecting this argument,
the Florida Supreme Court held:
A person who has contracted with an association assuming to
be incorporated and acting in a corporate capacity cannot,
after having received the benefit of the contract, set up as
a defense to an action brought by such company that the
latter was not legally incorporated, or ...