PONCE INLET — Completing a dramatic reversal, a judge on Wednesday dismissed a lawsuit that four years earlier had left this peninsula town on the hook for a $30.7 million judgment.
Circuit Judge Christopher France ruled in favor of Ponce Inlet in a partial retrial of a case brought by developer Pacetta LLC. It was unclear Wednesday whether Pacetta's principals, Lyder and Simone Johnson, will appeal.
The lawsuit has bounced around like a ping-pong ball from courtroom to courtroom since 2010, collecting scores of paperwork and lawyers' fees along its way. The outcome has been closely watched by those not just in the tiny town of fewer than 4,000 people, but by other landholders, those in legal circles and adjacent cities.
So far, the suit that literally had attorneys tripping over evidence in court proceedings last month, has racked up attorneys fees for Ponce Inlet alone topping $5 million — about the annual operating budget of the town itself. It was unclear Wednesday how high the developer's legal fees had reached.
The Johnsons' suit, also naming as plaintiffs companies Down the Hatch and Mar-Tim Inc., claims the town first encouraged them to assemble and develop a 16-acre riverfront parcel, building townhomes, dry-dock storage and boat slips, but after they invested millions, later blocked the development from happening. In the case's first go-around, the Johnsons won a $30.7 million jury judgment against Ponce Inlet, but last year the town's appeal was victorious, sending part of the case back to circuit court.
After a four-day bench trial last month, the parties had been awaiting France's final ruling for the past 2½ weeks.
"After this length of time it's very satisfying to know that we've been right all along," Ponce Inlet Mayor Gary Smith said in a phone interview Wednesday.
The Johnsons and their attorney, Pete Heebner, were less than satisfied.
"We are shocked and appalled by the ruling of the court," Heebner said. "Five years ago, a seasoned judge made the opposite findings based on the same testimony, documents and witnesses."
Heebner said the Johnsons are unsure of their next move, but have a 30-day window to petition the 5th District Court of Appeal, the same court that had remanded the case back to circuit court in the first place.
Smith said the town is bracing for another appeal, adding: "I mean, they have nothing to lose at this point in time."
How Ponce Inlet won
The latest trial came down largely to two questions. The first: Did the landowners officially file at least one formal development application for their 16-acre riverfront property? France ruled they didn't.
The second question: Could the town have effectively denied the Johnsons' attempts to develop their property without an official denial of a submitted application from the town?
On March 6, before the hearings got underway, the judge ruled partially in favor of the town, in that the Johnsons never officially filed an application.
In testimony and closing arguments, the Johnsons said they tried to submit paperwork for their development but were turned away. The town contended that attempt never happened.
The Johnsons also said it wasn't just one event that led them to never formally apply. Instead, it was many.
But ultimately, France found that without that single proven attempt to file an application to develop any part of the Johnsons' land, the town could never have given a final decision.
"The town has established, through competent evidence that the court finds to be credible and compelling, that the town has never effectively determined that any other development of plaintiffs' property would be impermissible," the judge wrote in his final order.
France said that the Johnsons could still apply for development and have the same ability they had when they purchased the properties in the first place.
"Plaintiffs have, and always have had, the same (if not presently more) development rights as they had at the time the properties were purchased," France wrote.
France ruled the Johnsons failed to prove it would have been futile to apply for anything on their property, and in turn, France would have had to tread uncharted legal ground to excuse them from filing at least one single application for any part of the property.
'The futility exception'
The town contended there was no evidence proving Ponce Inlet would've said no to development, and said no one could possibly know for sure because the Johnsons never formally applied.
The Johnsons testified that all the events following their land purchase essentially gave them their answer.
They cited open hostility from some officials about the development, a November 2008 election that put a majority of project opponents in decision-making positions, a citizen-led charter referendum that would have removed dry-stack boat storage or buildings over 5,000 square feet, and the passage of three consecutive temporary building moratoriums lasting from October 2007 to October 2010.
These events, Pacetta's lawyer argued, amount to a "futility exception," that the developers didn't need to submit a development proposal in order to have been unlawfully denied.
But Ponce Inlet lawyers say the law in Florida and across the nation doesn’t excuse the Johnsons from having to officially file at least once, that the Johnsons are essentially inviting the court to create new law, and in its closing arguments, town attorneys pointed out each individual claim, and refuted each one.
“The town has thoroughly searched for any case applying the futility exception to the single meaningful application requirement, but has discovered no such case,” town lawyers wrote in their closing statement. “Moreover, plaintiffs, whose burden it is to establish futility, have not provided any case showing the futility exception applies."
In Pacetta's court
Heebner, Pacetta's lawyer, said legal questions remain and could be addressed in an appeal or even in a separate federal case, Heebner says are dealing with similar land-use issues.
In his closing statement, Heebner wrote that the futility exception in this case wasn’t just about each individual event. It was about all of them together.
“No decisions are made in a vacuum. They are generally made by environmental factors that exist at the time the decisions are made,” Heebner said in written closing remarks. "You will not find a single reported case that contains all of the evil things that a town can do to a private property owner as you find here.”
Cliff Shepard, the town’s lead attorney, said he doesn't know exactly what to expect going foward.
"I would assume, as we all do, that Pacetta will appeal," Shepard said. "If they choose not to appeal then we're closer to the end than I would otherwise think. If they choose to appeal, who knows?"