07-3423 RANDOLPH NELSON and MARY L. NELSON, et al v. WAKULLA COUNTY, FLORIDA

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Laws-info.com » Cases » Florida » Florida First District Court » 2008 » 07-3423 RANDOLPH NELSON and MARY L. NELSON, et al v. WAKULLA COUNTY, FLORIDA

State: Florida

Court: Florida First District Court

Docket No: 07-3423

Case Date: 04/21/2008

Preview:IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA RANDOLPH NELSON and MARY L. NELSON, his wife; JOHN PROBERT and DOLORES PROBERT, his wife, individually and on behalf of a class of all others similarly situated, Petitioners, v. WAKULLA COUNTY, FLORIDA, a political subdivision of the State of Florida, Respondent. ___________________________/ Opinion filed April 21, 2008. Petition for Writ of Certiorari - Original Jurisdiction. Marsha L. Lyons, William L. Gerlin, and Douglas S. Lyons of Lyons & Farrar, P.A., Tallahassee; William C. Owen, Tallahassee; and Samuel R. Neel, III, Tallahassee, for Petitioners. Stephen E. Mitchell and Ronald A. Mowrey of Mowrey & Mitchell, P.A., Tallahassee, for Respondent. WOLF, J. Petitioners, Randolph Nelson and Mary L. Nelson, and John Probert and Dolores Probert, the plaintiffs in a class action suit, and respondent, Wakulla County, NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED CASE NO. 1D07-3423

the defendant in the class action suit, both challenge an order of the trial court denying a proposed settlement agreement submitted by the parties. Petitioners and respondent, jointly the parties, raise concerns regarding the following three areas in which the trial court denied the proposed settlement: 1) the nature and method of disbursements from the common fund; 2) attorneys' fees and costs; and 3) notices provided to the prospective members of the class. We share some of the parties' concerns, grant the petition in part, and remand to the trial court for the entry of an order allowing the parties to propose a settlement agreement consistent with the dictates of this opinion. Petitioners challenged the constitutionality of Wakulla County Ordinance 85-6 and sought a refund of the special assessments from respondent. See Nelson v. Wakulla County, 905 So. 2d 936 (Fla. 1st DCA 2005). The ordinance established the Wakulla County Emergency Medical Services Benefit District and allowed the County to levy "special assessments" on all improved real property (commercial, residential, and agricultural) in the same manner as ad valorem taxes, setting an assessment rate of $35 per parcel, beginning January 1, 1996. Respondent imposed and levied such "special assessments" for the tax years 1996-2002 or six years. The trial court declared the ordinance unconstitutional, but refused petitioners' request for a refund. Following an appeal of that order, the matter was remanded to the trial court for a determination of whether the equitable considerations set out in
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Gulesian v. Dade County School Board, 281 So. 2d 325 (Fla. 1973), precluded such an award. On May 26, 2006, the trial court rendered an Order Determining and Certifying Class finding that a class existed under Florida Rule of Civil Procedure 1.220(b)(3). The class included all property owners in Wakulla County who had paid the yearly $35 special assessment levied by Wakulla County upon improved real estate for Emergency Medical Services and who wished to receive a refund of any payments of such assessment that were actually paid on or after March 31, 1999. Respondent appealed that trial court order, but on August 15, 2006, filed a motion to relinquish jurisdiction; the motion was granted on August 18, 2006, for the trial court to consider the settlement agreement reached by the parties. The parties filed several proposed settlement agreements which were rejected by the trial court. The revised settlement agreement at issue before this court provided the following: 1) a settlement fund of $715,000.00 or 51.8% of the assessments of $1,379,525 paid and collected after March 31, 1999; 2) that the gross recovery per taxpayer would be $18.14 or 51.8% of the $35 assessment and after the estimated $365,000 was dispensed for attorneys' fees and costs, the minimum proposed refund would be $8.88 per assessment per year; and 3) that the settlement fund would be reduced by the total amount of the allowable claims of those opting out of the class.
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The proposed settlement agreement further provided that the County would not be required to deposit the full amount into the fund but would make disbursements as follows: 1) if a claimant was the current owner of the property assessed, he or she would receive a credit for the refund amount against ad valorem taxes assessed on the property for tax year 2007-08, which assessments would be billed in November 2007; any amount credited against a claimant's future ad valorem tax assessment bill would be credited against the settlement fund; and 2) if a claimant was not the current and projected owner of the subject parcel, a refund would be distributed to the claimant at his or her address as indicated on the proof of claim form. Such distribution would also be made to a claimant who was a current owner but who was reasonably projected not to be exposed to ad valorem tax obligations because of homestead or other exemptions. Following the joint motion presentation, the trial court entered an Order With Respect to Order Regarding Joint Motion, and Forms in Class Action, attaching an order that it intended to enter if the parties failed to object. This was followed by an Amended Order With Respect to Order Regarding Joint Motion, and Forms in Class Action on April 5, 2007, which amended certain terms of the settlement agreement. Both parties subsequently filed objections to the trial court's amended order.

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Specifically, both parties objected to paragraph 12, under OPT-OUT, subparagraph 5, which provided: The total amount of potentially refundable special assessments you paid (before any deduction for attorneys' fees and costs) will be taken out and removed from the money available for settlement so that your's [sic] will not and cannot be used in the lawsuit or its settlement. The parties asserted that if the full amount were removed, there would be insufficient funds to pay those desiring to take advantage of the class action settlement. They suggested this problem could be fixed by diluting the fund after any deduction for attorneys' fees and costs. The court's proposed notice also contained language objected to by the petitioners which described the lawsuit as "a suit principally by taxpayers, as a class, against themselves for a refund to be paid by themselves as taxpayers of the county. . . ." Subsequently, on May 3, 2007, the parties filed an Addendum to the Settlement Agreement and Release. In the addendum, that parties agreed: 1) The initial settlement fund of $715,000 would be reduced by each and every class member who elects to opt-out of participation in the class by the sum of $18.14 for each assessment year that such opt-out member participated in paying the challenged assessments. 2) The petitioners and County agreed that any unclaimed settlement funds could be utilized to the extent necessary to generate a minimum refund amount of $8.88 per assessment per year for those filing a refund claim.
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3) If more than 1000 full four-year assessment taxpayers opt-out of the class, the County may rescind the agreement and continue with litigation.

On June 5, 2007, the trial court rendered an Order Denying Preliminary Approval of All Proposed Settlement Agreements, Notices and Forms. The trial court's order found that the parties entered into an improper settlement. After considering several proposed settlements, the court specifically found that: Once again, as the court was compelled to find in the October 2006 order, what the parties continue to propose misses the common fund principles mark by a wide margin, is beyond any reasonable range of fairness, reasonableness and adequacy permitting preliminary approval, and the court cannot give preliminary approval to what is still being proposed. The trial court took issue with the following eight aspects of the settlement proposal: 1) It established a "common fund" that was of a hypothetical construct which did not have a fixed monetary recovery amount; 2) It provided, as an integral and binding part of the agreement, the fees and costs of litigation being paid; 3) It provided that the paying party pledges to establish a fund, "give security," to pay all obligations to the class without there being a fund separately deposited or escrowed for an actual existing fund, agreeing that the obligation will be paid by way of future credits, except for the allowed attorney fees and costs; 4) It provided a "clear sailing" provision that the paying party would not object to the amount of fees and costs negotiated and agreed upon by the parties as being reasonable and awardable; 5) It provided that fees and costs are an integral part of the settlement, so that it could only be approved as proposed; 6) It proposed notices and forms to absent potential members of the (b)(3) class containing scant or minimal notice and information about the
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nature and character of the action itself, its details, and the rights of the class members; 7) It provided notices and forms which make the settlement proposal appear to be a "done deal," with the only option available to the recipient being to accept it and file a claim; and 8) It also reserved to class counsel the right to appeal the entire settlement, instead of just the order awarding fees, which is independently appealable. The trial court's concern that the settlement agreement was not fair, reasonable, and adequate can be broken into the following three general categories: 1) the structure of the "common fund;" 2) the provisions for attorneys' fees and costs; and 3) the notice and forms to absent potential members of the class, containing information about the nature and character of the action itself, its details, and the rights of class members. The first contention related to both the nature of the fund as well as disbursements from the common fund. The parties' challenge addresses these concerns, as well as one general area pertaining to the court's alleged failure to take into account the appropriate factors in disapproving settlement.

General Consideration In a settlement agreement, the trial court must review the agreement and assure itself that the agreement is "fair, reasonable, and adequate."

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