Judge Grudgingly Grants City’s Emergency Delay in Home Builders’ Lawsuit Against Palm Coast Over Impact Fees

A none-too-pleased and already anxious Circuit Judge Sandra Upchurch this morning grudgingly granted Palm Coast’s emergency motion to delay what could have been a decisive hearing on the Flagler Home Builders Association’s lawsuit against the city over a sharp increase in development impact fees. The association claims the delay is costing their members $1.2 million a month. 

“I’m not going to start off this case with a procedural snafu. I’m not going to hand an appellate issue up to anybody. I’m just not going to do that,” the judge said. She tried to convince one of Palm Coast’s lawyers to concede a legal point that would have allowed for what was expected to be a daylong hearing to proceed. 

The lawyer, Zachary Miller, not only would not concede but took the extraordinary step of disagreeing with Upchurch’s interpretation of her own order–the order she had written and signed on Feb. 11–granting in part the city’s motion to dismiss the Home Builders Association’s amended complaint. 

Upchurch disagreed with Miller and directed him to read the order again. Miller stuck to his interpretation. The judge relented. A new hearing date was not scheduled yet. 

The Home Builders Association (HBA), five builders and an individual homeowner sued Palm Coast in October over the city’s adoption in the previous June of sharply higher parks, fire and transportation impact fees, which together now add up to over $11,000 for a typical single-family house, in addition to other impact fees for such things as schools and utilities. Impact fees are a one-time levy on builders or developers charged to new houses and businesses to defray the “impact” of new development on local infrastructure. (See the briefing here.) 

The City Council raised impact fees last year higher than state law allows, citing “extraordinary circumstances” such as a rapidly increasing population and costs. The law exempts governments from complying with ceilings on impact fee increases as long as they can prove extraordinary circumstances. The HBA contends the city fails that test. It also contends that the increase violates a new law restricting local governments from unduly burdening developers with regulations (that law has been controversial and is being rewritten in the current legislative session). 

The case is cluttered with technicalities and the usual legal posturing from both sides. But those can be boiled down to this: The HBA filed an amended complaint in late November, and in late January filed a motion for summary judgment–meaning for a judge to rule on the case, preempting a trial. The city filed a motion to dismiss the amended complaint, citing numerous rationales. 

Upchurch rejected the city’s argument with one exception: She granted the motion to dismiss with regards to the HBA’s standing. The judge found that absent an amendment to the complaint, the HBA had no standing. But the five companies and the individual did. The judge gave the HBA 10 days to file yet another amended complaint–which the HBA did last week. The HBA wanted to stick with the scheduled hearing on its motion for summary judgment.  

That prompted Palm Coast to file the emergency motion for a delay, claiming it was “unclear which complaint governs these pending motions,” even though the latest amended complaint superseded the ones before it. Palm Coast’s motion stated it had not had time to review the amended complaint.  

To Daniel Webster, the attorney representing the HBA (not to be confused with the Daniel Webster representing Florida’s 11th congressional district), the city was being “disingenuous.” He said he was prepared to withdraw the second amended complaint so the hearing could proceed based on previous pleadings, because “it’s too important to let this be delayed another month or two.”

Miller said by law the previous complaints don’t exist anymore, since the judge’s order dismissed them. Not so, Upchurch said: her order applied to just the HBA, so the previous complaint could still be relied on as far as the other six plaintiffs are concerned. 

That led to a remarkable exchange:

“I’ve read the order on it,” Miller told the judge. “Respectfully, I don’t think that it was for the other plaintiffs. The entire complaint was dismissed, and they had time to file a second amendment complaint.” 

“That’s not what I intended. Is that what the order says?” the judge asked about her own order. 

“They asked him to refile with more information and allegations that support the standard,” Miller said, using a neutral pronoun instead of pinning the order’s wording on the judge. 

“Your honor, that’s totally false,” Webster said, raising his voice and saying “the only change was the few sentences added to paragraph 1.1 dealing with the standards.” 

Upchurch told Miller to read the order again. He sat down. Webster tried to interject. Upchurch stopped him. The courtroom was quiet for a few minutes as Miller read, flanked by Charles Anasagasti and Jeremiah Blocker, two of the Douglas Law Firm attorneys representing the city in the case. Two more, Marcus Duffy and Joe Saviak, the firm’s newest recruit, sat in the gallery’s first row, with top city administrative directors behind them that included deputy City Manager Lauren Johnston, Fire Chief Kyle Berryhill and Stormwater and Engineering Director Carl Cote, along with planners. Some might have been called to testify. 

After reading the judge’s order, Miller said that Webster could have proceeded without the HBA, but instead opted to file the second amended complaint, triggering the city’s need for review and mooting the other complaint. In other words, Miller was not budging. He was creating just enough legal fuzziness to add to the judge’s trepidation. 

“I would very much like the city of Palm Coast to agree to allow us to continue on the remaining plaintiffs on the first complaint that I denied, in part, for the one plaintiff. But that’s not happening, apparently,” Upchurch said. “So I’m going to grant the emergency motion, because I am not going to start this case off–it’s too important, it’s too all encompassing for me to start that off with an error.” 

At the beginning of the hearing, Upchurch had noted to the lawyers that she was keeping her phone handy because her 26-year-old son had had a snowboarding accident in Japan, and she was expecting a call to schedule his surgery while coordinating his flight back. “It’s not technically an emergency, but you know, when it’s your baby, it feels like it is,” the judge said, before starting the proceedings. 

In the event, the hearing lasted only 12 minutes, not long enough for the phone to buzz, though the judge’s disclosure gave Webster an opening for a little opportunistic obsequiousness, one-upping the other side’s silence. 

“Your honor?” Webster called out as Upchurch was stepping down. 

“Yes?”

“Wish your son the best,” he said. 

“There’s worse things that can happen,” the judge said, perhaps hinting that the continuance, too, may not have been the most dreadful outcome of the day.