Edward A. Crapo, in his capacity as Alachua County Property Appraiser v. Academy for Five Element Acupuncture, Inc., a Florida Non-Profit Corporation ( 2019 )

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D17-1895
_____________________________
EDWARD A. CRAPO, in his
capacity as Alachua County
Property Appraiser,
Appellant/Cross-Appellee,
v.
ACADEMY FOR FIVE ELEMENT
ACUPUNCTURE, INC., a Florida
Non-Profit Corporation,
Appellee/Cross-Appellant.
_____________________________
On appeal from the Circuit Court for Alachua County.
Toby S. Monaco, Judge.
July 8, 2019
ON REHEARING EN BANC
PER CURIAM.
Alachua County Property Appraiser Edward A. Crapo appeals
a circuit court decision awarding the Academy for Five Element
Acupuncture, Inc. an educational property tax exemption under
section 196.198, Florida Statutes. On the merits, Property
Appraiser Crapo argues that the Academy does not qualify for the
exemption because it is not an “educational institution” as defined
in section 196.012(5)—and we agree. Procedurally, the Academy
raises a tipsy-coachman argument 1 urging us to affirm the circuit
court’s ruling because an earlier Value Adjustment Board decision
favoring the Academy was preclusive under the administrative
finality doctrine—but we disagree. We therefore reverse the circuit
court’s judgment.
I. Facts
The Academy operates a not-for-profit private post-secondary
school in downtown Gainesville that teaches and trains students
in acupuncture, health sciences, and herbal studies. For years,
while located in Broward County, the Academy received an
educational tax exemption on its property. But when it moved to
Gainesville in 2008 and applied for the same exemption, Property
Appraiser Crapo denied it. He asserted that the Academy was not
an “educational institution” under the tax code and did not qualify
for the property tax exemption. The Academy petitioned the
Alachua County VAB to resolve the dispute, and a special
magistrate heard the case. The special magistrate concluded, with
substantial hesitation, that the Academy qualified as an
educational institution under section 196.012(5), and
recommended that the VAB grant the exemption. The VAB did so,
summarily granting the Academy’s property tax exemption.
Property Appraiser Crapo did not seek the de-novo hearing in
circuit court authorized under section 194.036(3), Florida Statutes.
The Academy received the educational exemption on its
Alachua County property from 2008 through 2013. In 2014,
Property Appraiser Crapo again raised the education exemption
issue. He issued a notice to the Academy disapproving its
exemption for failing to meet the definition of an educational
institution. The Academy responded by again petitioning the VAB.
The VAB upheld the tax exemption, the same result as in 2008.
This time, however, Property Appraiser Crapo filed suit in circuit
court for de-novo determination of the issue. See § 194.036(3), Fla.
1 The “tipsy coachman” doctrine allows an appellate court to
affirm a trial court that “reaches the right result, but for the wrong
reasons” so long as “there is any basis which would support the
judgment in the record.” Dade Cty. Sch. Bd. v. Radio Station
WQBA, 731 So. 2d 638, 644 (Fla. 1999).
2
Stat. The circuit court ruled that the Academy qualified for the
exemption.
In addition to deciding the tax exemption issue, the circuit
court considered the Academy’s alternative administrative-finality
argument. The Academy argued that Property Appraiser Crapo
was prohibited from litigating the tax exemption issue because the
underlying facts had not changed, and he lost the same issue
before the VAB in 2008. But the circuit court rejected the
Academy’s decisional-finality argument under the theory that each
tax year stands on its own.
Property Appraiser Crapo then appealed the property tax
exemption issue to this Court, and the Academy cross-appealed on
the administrative-finality issue. A three-judge panel affirmed the
trial court’s final judgment for the Academy based on
administrative finality, holding that Property Appraiser Crapo
could not revisit or challenge the Academy’s tax exemption any
more after the VAB’s 2008 decision. The panel opinion did not
reach the merits of Property Appraiser Crapo’s argument against
the Academy’s tax exemption. Property Appraiser Crapo then filed
a motion for rehearing en banc, which we granted. See Fla. R. App.
P. 9.331(d).
II. Merits: The Exemption
Real property in Florida is annually assessed and subject to
an ad valorem tax unless an exemption applies. Art. VII, § 4, Fla.
Const.; §§ 192.042, 196.001(1), Fla. Stat.; see also Sowell v.
Panama Commons, L.P., 192 So. 3d 27, 30 (Fla. 2016). One of the
available exemptions under Florida law applies to property used
for educational purposes by an “educational institution.”
§ 196.198, Fla. Stat.; see also Art. VII, § 3(a), Fla. Const. (allowing
for exemptions on property used for educational purposes); Nat’l
Ctr. for Constr. Educ. & Research Ltd., Corp. v. Crapo, 248 So. 3d
1256, 1257-58 (Fla. 1st DCA 2018). The tax code further defines an
“educational institution” as follows:
“Educational institution” means a federal, state,
parochial, church, or private school, college, or university
conducting regular classes and courses of study required
3
for eligibility to certification by, accreditation to, or
membership in the State Department of Education of
Florida, Southern Association of Colleges and Schools, or
the Florida Council of Independent Schools . . . .
§ 196.012(5), Fla. Stat. (emphasis added).
The parties disagree about whether the Academy falls within
the section-196.012(5) definition of an “educational institution”
and thus qualifies for this particular exemption. We review such
questions of statutory interpretation de novo. See State v. Purdy,
252 So. 3d 723, 725 (Fla. 2018). Statutes providing for an
exemption to an ad valorem tax are construed strictly, such that
any ambiguity is resolved against the claimed exemption. Nat’l
Ctr., 248 So. 3d at 1257-58 (citing Sowell, 192 So. 3d at 30). A
claimant bears the burden of clearly showing its entitlement to a
tax exemption. Id. at 1258.
In this case, no one disputes that the Academy is a state-
licensed private post-secondary school that grants certificates and
degrees in acupuncture, Chinese herbal studies, and health
science. But Property Appraiser Crapo argues that the Academy is
not entitled to the exemption because it is not credentialed by, and
does not offer classes or courses as required for credentialing by,
one of the three entities identified in section 196.012(5): the State
Department of Education of Florida, the Southern Association of
Colleges and Schools, or the Florida Council of Independent
Schools. Rather, the record evidence here only shows that the
Academy’s classes and courses satisfy licensing requirements of
the Florida Commission for Independent Schools, which is not one
of the entities the statute identifies. The circuit court concluded
that Commission-issued licenses satisfy the statute’s reference to
certification by “the State Department of Education,” but Property
Appraiser Crapo argues that the Commission and Department are
different entities for purposes of the exemption statute.
We cannot read section 196.012(5)’s reference to the
“Department” as applying equally to the Commission, because
Florida law distinguishes between Commission- and Department-
certified schools. Although the education statute creating the
Commission places it within the Department as an administrative
4
matter—see sections 1005.21(1), 1001.22, Florida Statutes—the
Department’s and Commission’s school-certification regimes are
not referenced interchangeably. Under section 1005.06(1), for
example, institutions under the Department’s jurisdiction are
distinguished as “not under the jurisdiction and purview of the
commission.” (Emphasis added.) The statute dealing with
barbering schools requires “a license issued by the Commission . . .
pursuant to chapter 1005.” § 476.178, Fla. Stat. But it also “shall
not be construed to prevent certification [of barber training
programs] by the Department of Education.” Id. The same
distinction between Commission licensing and Departmental
certification is found in the cosmetology statute. § 477.023, Fla.
Stat. It requires “a license issued by the Commission . . . pursuant
to chapter 1005,” but then also allows for the Department to certify
cosmetology training programs. Id. An educational assistance
program for National Guard members refers to institutions
“licensed by the Commission” separately from training programs
leading to certifications approved by the Department of Education.
§ 250.10(7), Fla. Stat. The Massage Practice Act does not mention
Commission licensing at all, but rather defines a “[b]oard-
approved massage school” as being “licensed by the Department of
Education.” § 480.033(9), Fla. Stat. Additionally, section 1005.05,
Florida Statutes, distinguishes between the Commission and the
Department with respect to pre-program application requirements
for nonpublic colleges, by instructing as follows:
Colleges under the jurisdiction of the Commission for
Independent Education shall apply to the commission.
Colleges that are not under the jurisdiction of the
commission shall apply to the Department of Education.
§ 1005.05, Fla. Stat. These statutes undermine the Academy’s
argument that institutional licensing by the Commission is the
same as certification by the Department.
In addition to having different school-approval regimes, we
recognize that Florida law grants authority to the Commission
independent from the Department, section 1005.21(1), Fla. Stat.;
that Commission members are appointed through the Governor
and Senate instead of via the Commissioner of Education,
section 1005.21(2), Fla. Stat.; and that the Commission possesses
5
its own rulemaking authority, section 1005.22(1)(e), Fla. Stat. The
Commission’s independence from the Department in these areas
also indicates that their respective school-certification regimes
operate on different tracks.
In light of these statutes, we agree with Property Appraiser
Crapo that the Commission’s licensure is not the same as the
Department’s certification within the meaning of the tax-
exemption statute. On the record presented, we cannot conclude
that the Academy’s programs satisfy the Department’s
certification requirements under section 196.012(5) merely
because the programs satisfy the Commission’s licensing
requirements. Because the Academy did not carry its burden of
clearly showing that it is an “educational institution” entitled to
the property tax exemption, we reverse the final judgment. We also
reject the Academy’s alternative tipsy-coachman argument that
the doctrine of administrative finality precluded further review of
the tax-exemption issue the VAB addressed in 2008, and turn to
that issue next.
III. Procedure: Administrative Finality
The Academy’s alternative argument is that Property
Appraiser Crapo was barred from revisiting the tax exemption
issue after he lost the same issue before the VAB in 2008, and did
not raise the issue in a circuit court proceeding. This argument
requires us to pull together a complex constitutional, statutory,
regulatory, and factual framework to decide an important issue
that is deceptively simple to state: Does administrative finality
attach to VAB decisions that are not subsequently litigated in
circuit court? 2
2 We acknowledge with appreciation the amicus briefs on this
topic filed by the State of Florida Department of Revenue, the
Property Appraisers’ Association of Florida, and the Tax Section of
The Florida Bar. All three of these entities assert that
administrative finality does not attach to a VAB decision. We also
agree with the Department of Revenue’s observation in its amicus
brief that a ruling contrary to the one we reach “will adversely
impact the ability of taxpayers and property appraisers to access
6
Given the unique context of ad valorem taxation and
exemptions, we must agree with Property Appraiser Crapo that
administrative finality does not attach to VAB decisions. To
achieve preclusive finality of a tax ruling requires either going
directly to circuit court in the first instance, or filing suit in circuit
court for de novo review and disposition of an issue previously
presented to the VAB. The decision of a circuit court, if not
appealed, then has preclusive effect. If the circuit court’s decision
is appealed, the appellate court’s decision becomes the law of the
case (absent further review and disposition by the Florida
Supreme Court or the United States Supreme Court). A VAB
decision alone does not have preclusive effect. 3
A. Statutory and Regulatory Framework
This analysis requires an understanding of the laws and rules
establishing and governing the office of property appraiser and its
authority over tax exemptions, VABs and their authority and
processes, circuit court jurisdiction and standards for review of tax
questions, and the oft-repeated maxim in tax law that “each year
stands on its own.” We address these topics in turn.
the administrative and judicial remedies that have long been held
must function independently under a de novo standard of review,
each tax year.”
3 We respect our concurring colleague’s observation that the
record reveals some potential factual differences between the
Academy’s first exemption application and the later one at issue
here. However, we do not find that observation to require a
different analysis for two reasons. First, the circuit court did not
evaluate the legal effect of any factual differences, and we are not
at liberty to do so in the first instance on appeal, even if we thought
they might make a difference to the exemption question, which it
appears they do not. Second, although the concurrence would ask
first whether this case presents an exception to any doctrine of
finality that might attach to a VAB decision, we conclude that
administrative finality does not apply at all, so it is unnecessary to
evaluate whether any exception to it might exist.
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(1) Property Appraisers and Exemptions
Each Florida county has a property appraiser, who is an
elected and independent constitutional officer charged with
determining whether real property situated within the county is
subject to ad valorem taxation; and if so, valuing the property and
assessing tax on it. Art. VIII, § 1(d), Fla. Const. 4 Each property
appraiser also has authority to determine whether property is
entitled to a tax exemption. § 196.011, Fla. Stat. (requiring tax-
exemption applications to be filed with property appraisers);
§ 196.193, Fla. Stat. (requiring property appraisers to review tax-
exemption applications and determine whether to grant or deny
them). This is an annually-repeating process, as discussed in
greater detail below.
A property appraiser denying an initial or renewal application
must notify the applicant, who then can choose any or all from
among three options to challenge the denial: request an informal
conference with the property appraiser under section 194.011(2),
Florida Statutes; petition the VAB for review under section
194.011(3); or file suit in circuit court under section 194.171, either
first among these options or after exercising one or both of the
others. Each of these statutes provides that the dispute-resolution
steps available before filing suit in circuit court are optional. It is
not necessary to confer informally before seeking a VAB hearing
or filing suit, and it is not necessary to go to a VAB hearing before
filing suit.
Property appraisers also have the statutory right to file suit
in circuit court after a VAB rules against them. § 194.036(1), Fla.
Stat. (authorizing property appraisers to initiate circuit court
proceedings (a) upon determining and asserting that the VAB
contravened a provision of constitution, statute, or rule; (b) if the
VAB arrives at an assessed value exceeding the property
appraiser’s assessed value by more than percentage amounts set
forth; and (c) if the property appraiser asserts that the VAB is
4 The State’s 67 property appraisers as a group make up a
class of constitutional or state officers within the Florida Supreme
Court’s review jurisdiction. Art. V, § 3(b)(3), Fla. Const.
8
consistently and continuously violating the law or rules, thus
triggering review by the Department of Revenue and potential
action against the VAB). 5 Property Appraiser Crapo sued in circuit
court under section 194.036(1)(a), asserting an erroneous
construction and application of the educational tax exemption
statute.
(2) VABs
Each Florida county has its own VAB, the members of which
are two members of the county’s governing body, one member of
the school board, and two citizen members—one homestead
property owner and one commercial business owner. § 194.015,
Fla. Stat. The members of the VAB are not elected by the public or
appointed by the Governor. The board of the governing body of the
county chooses two members of the governing body to serve on the
VAB, the school board elects one of its members to serve on the
VAB, and then the governing body and the school board each
appoint one of the other two VAB members. Id. Each VAB must
have private counsel, who must have more than five years’
experience practicing law. Id. To resolve factual issues in many
proceedings, the VAB appoints a special magistrate, who does not
have to be a lawyer, except in cases involving exemptions, in which
5 The Tax Section’s amicus brief, filed February 2, 2019, sets
forth a useful history of the development of what are now called
VABs, and provides context for why section 194.036(1)(c) allows
property appraisers to reject VAB decisions through de novo
lawsuits in circuit court. See also Crossings At Fleming Island
Cmty. Dev. Dist. v. Echeverri, 991 So. 2d 793, 800 (Fla. 2008)
(providing an historical synopsis). This provision of the statute
seeks to address situations in which VABs may have strayed from
their analytical and dispute-resolution roles under the influence of
their positions as local politicians answerable to residents seeking
to keep taxes low, or have over-corrected to the opposite result. The
Tax Section, while opining that problems may continue to exist
(which the Academy would deny), does not suggest that this
happened here; and nor do we—but the historical perspective is
helpful in understanding the evolution of the governing laws.
9
the special magistrate must be a lawyer admitted to the Florida
Bar for at least five years. § 194.035(1), Fla. Stat.
The VAB has specific authority to hear disputes involving
exemptions. § 194.032(1)(a)3., Fla. Stat. The VAB’s role in
exemption cases is to determine whether the taxpayer meets the
statutory criteria for the specific exemption at issue. See Fla.
Admin. Code R. 12D-9.027(4). The VAB must support all
conclusions of law with findings of fact supported by record
evidence, or the lack thereof. Fla. Admin. Code R. 12D-9.032(1)(a).
While it is tempting to try to analogize VAB decisions to a
variety of other non-judicial processes, it is important to respect
the differences between them. 6 The statutes expressly provide that
a VAB is not an administrative tribunal under chapter 120 of the
6 Even in a classic administrative-law context, the Florida
Supreme Court has cautioned against applying preclusive
doctrines. See Thomson v. Dep’t of Envtl. Regulation, 511 So. 2d
989, 991 (Fla.1987) (noting that unlike courts that apply the law
to past, static facts, administrative bodies often deal with “fluid
facts and shifting policies”) (internal references omitted); Peoples
Gas Sys., Inc. v. Mason, 187 So. 2d 335, 339 (Fla. 1966) (explaining
administrative bodies and “decid[e] issues according to a public
interest that often changes with shifting circumstances and
passage of time”); see also Delray Med. Ctr., Inc. v. State, Agency
for Health Care Admin., 5 So. 3d 26, 29 (Fla. 4th DCA 2009) (noting
that preclusive doctrines do not “neatly fit” in administrative
proceedings and should be applied with “great caution,” and
allowing agencies to revisit earlier decisions upon a showing of a
significant change of circumstances, a demonstrated public
interest, or in the event of “new facts, changed conditions, or
additional submissions”). We find this reasoning persuasive in the
tax context presented here, but decline to map the outer
boundaries of administrative finality in other contexts. The
dissent’s extensive attempt to compare a VAB to many other local-
government or administrative bodies, and its attempt to advocate
for a different governing policy in this area, fails on the facts
because this board is unique, and fails on the law because of the
unique body of law already in existence that is foundational to tax
law and practice.
10
Florida Statutes. § 194.034(1)(i), Fla. Stat. (“Chapter 120 does not
apply to hearings of the value adjustment board.”). Whereas
appellate courts have jurisdiction to review the merits of orders
entered in chapter-120 proceedings, circuit courts review de novo
the issues presented to VABs, giving no precedential effect to VAB
decisions. § 194.036(3), Fla. Stat.
A VAB is also not a local governing body like a city or county
commission. It does not promulgate ordinances, determine and
regulate local land use, or otherwise govern a locale. See Broward
Cty. v. G.B.V. Int’l, Ltd., 787 So. 2d 838 (Fla. 2001) (illustrating
county commission function of regulating land use subject to
limited and deferential court review); Haines City Cmty. Dev. v.
Heggs, 658 So. 2d 523 (Fla. 1995) (recognizing right of judicial
review of local administrative action of evicting tenant from public
property, under increasingly narrow standards at each step of
review); City of Deerfield Beach v. Vaillant, 419 So. 2d 624 (Fla.
1982) (noting right to review but explaining narrow scope of review
of civil service board decision on employee termination). A VAB
merely serves to informally resolve tax disputes or attempt to do
so, and because of the de novo standard that applies in circuit court
and the circuit court’s original, exclusive jurisdiction, VAB
decisions have no weight whatsoever in circuit court litigation. See
§ 194.036(3), Fla. Stat. 7
(3) Circuit Court Jurisdiction
Two important concepts apply to circuit court adjudication of
tax disputes: exclusivity and de novo review. The Florida
7 A VAB is also unlike the Public Service Commission, upon
which the original panel relied to derive its finality conclusion. See
Fla. Power Corp. v. Garcia, 780 So. 2d 34, 44 (Fla. 2001) (cited in
original panel opinion, but dealing only with an attempt to revisit
a previous determination of subject-matter jurisdiction over the
same parties and issues). The PSC is something of a hybrid, with
review of its decisions differing based on their content, but
deferentially. See, e.g., Sierra Club v. Brown, 243 So. 3d 903 (Fla.
2018) (illustrating direct review in supreme court required by Art.
V, § 3(b)(2), Fla. Const. and deferential standard of review). We
could expend additional resources evaluating every dispute-
11
Constitution gives circuit courts “exclusive original jurisdiction . . .
in all cases involving legality of any tax assessment or toll” unless
the Legislature changes that by general law. Art. V, § 20(c)(3), Fla.
Const. (emphasis added). Far from having been changed by
general law, this requirement remains codified at section
194.171(1) of the Florida Statutes (“The circuit courts have
original jurisdiction at law of all matters relating to property
taxation.”), and at section 26.012(2)(e) (“[Circuit courts] shall have
exclusive original jurisdiction: . . . In all cases involving legality of
any tax assessment or toll or denial of refund.”) (emphasis added).
Thus, as already noted, it is not necessary for a taxpayer to seek
informal resolution with the property appraiser or the VAB before
filing suit in court. § 194.011(2), (3), Fla. Stat. Both the property
appraiser and the taxpayer can go straight to circuit court to
litigate an assessment or exemption issue, and skip the VAB
altogether. § 194.171, Fla. Stat.
Regardless of the prior history of a dispute, review in circuit
court is de novo: “The circuit court proceeding shall be de novo, and
the burden of proof shall be upon the party initiating the action.”
§ 194.036(3), Fla. Stat. In circuit court proceedings, there is no
presumption of correctness as to exemptions. § 194.301(2)(d), Fla.
Stat. (“If the challenge is to the classification or exemption status
of the property, there is no presumption of correctness, and the
party initiating the challenge has the burden of proving by a
preponderance of the evidence that the classification or exempt
status assigned to the property is incorrect.”).
Thus, although proceedings in circuit court after earlier
informal attempts at dispute resolution are sometimes called
“appeals,” a VAB decision is not “appealable” in the formal sense
of an appeal as a review proceeding. Crossings, 991 So. 2d at 801
n.6 (“While this process is referred to as an ‘appeal’ of the board’s
decision, actions brought in the circuit court pursuant to section
194.032, now section 194.036, are original actions, not appeals.”
(quoting Williams v. Law, 368 So. 2d 1285, 1286 (Fla. 1979))). In
circuit court proceedings, the VAB resolution has no precedential
resolution and decision-making body in the state for comparison to
VABs, but to no practical avail, as the law enables us to resolve the
issue before us without such an academic exercise.
12
value and is owed no deference; the property appraiser’s decision
is reviewed de novo. § 194.036(3), Fla. Stat.
(4) “Each year stands on its own.”
The general maxim of “each year stands on its own” is
foundational to the understanding of tax law, and has been
extended to the context of tax exemptions and not merely
valuations. Page v. City of Fernandina Beach, 714 So. 2d 1070,
1072 (Fla. 1st DCA 1998) (“The taxable status of property is
determined on January 1 of each year. See Section 192.042, Florida
Statutes (1973). This is the date on which the tax assessor
determines whether a particular parcel of property is entitled to
exemption from taxation for the tax year.”) (emphasis added)
(citing Overstreet v. Ty–Tan, Inc., 48 So. 2d 158 (Fla.1950));
Southlake Cmty. Found. v. Havill, 707 So. 2d 361, 363 (Fla. 5th
DCA 1998) (reaching merits of tax exemption denial following
earlier memorandum from property appraiser that property was
exempt); S. Bell Tel. & Tel. Co. v. Broward Cty., 665 So. 2d 272,
274-75 (Fla. 4th DCA 1995) (accepting the rule that every tax year
stands alone and finding on the facts presented that the rule was
not violated); Op. Att’y Gen. Fla. 74-98 (1974) (“[T]he very nature
of a tax exemption and the laws establishing the same preclude
the application of this [preclusive] doctrine in tax exemption cases.
. . . Each years . . . exemption must stand or fall on its own validity,
unconnected with . . . any prior or subsequent year . . . .”); see also
Container Corp. of Am. v. Long, 274 So. 2d 571, 573 (Fla. 1st DCA
1973) (“Ad valorem taxes assessed against property in this state
for any given tax year must stand or fall on its own validity,
unconnected with the assessment made against that land during
any prior or subsequent year.”), superseded by statute in certain
agricultural-exemption cases Tilton v. Gardner, 52 So. 3d 771, 778
& n.5 (Fla. 5th DCA 2010).
This year-standing-alone concept reflects the nature of
taxation and the annual taxation process established in the
Florida Statutes. Property owners seeking tax exemptions must
apply annually, and failure to file “shall constitute a waiver of the
exemption privilege for that year.” § 196.011(1)(a), Fla. Stat. After
initially granting a tax exemption, the property appraiser in
subsequent years mails the taxpayer a renewal application, but
13
the property appraiser retains the discretion to deny even a
renewal application. § 196.011(6)(a), Fla. Stat. (“Such renewal
application shall be accepted as evidence of exemption by the
property appraiser unless he or she denies the application.”)
(emphasis added). The property appraiser also can request the
county’s governing body to waive the requirement of annual
application for exemption as to properties not excluded from such
waiver by statute, which then shifts to the property owner the
burden of notifying the property appraiser proactively of any
changes that may affect the exempt status of the property, subject
to penalties for failure to do so. § 196.011(9)(a), Fla. Stat. Even in
that context, which was the process followed in this case, the
statute contemplates the property appraiser’s discretion to deny
an exemption. § 196.011(9)(e), Fla. Stat. (“If an exemption for
which the annual application is waived pursuant to this subsection
will be denied by the property appraiser in the absence of the
refiling of the application, notification of an intent to deny the
exemption shall be mailed to the owner of the property prior to
February 1.”) (emphasis added). 8
The corollary to the maxim that “each tax year stands on its
own” is that no taxpayer has a vested right to a tax exemption.
Sowell, 192 So. 3d at 30-31 (relying in part on the statutory
procedures for tax exemptions as evidencing the absence of a
vested right to an exemption); see also City of Largo v. AHF-Bay
Fund, LLC, 215 So. 3d 10, 14-15 (Fla. 2017) (noting nonprofit
exemption statute requires taxpayer to take affirmative steps to
request exemption on an annual basis; the exemption is not
automatic and can be waived); Spencer Estates of Fla., LLC v.
Havill, 125 So. 3d 795, 796 (Fla. 5th DCA 2012) (affirming circuit
court’s refusal to entertain taxpayer’s attempt to punish property
appraiser for failing to grant exemption in 2009 and 2010, where
pending case determining taxpayer’s entitlement to exemption
involved only tax year 2008; “[e]ach [tax] year stands on its own”);
Davis v. Macedonia Housing Auth., 641 So. 2d 131, 132 (Fla. 1st
DCA 1994) (expressly rejecting trial court’s ruling that taxpayer
8 The Department of Revenue’s administrative rules also
contemplate property appraisers’ right to change their minds,
excluding from “correction” procedures “changes in the judgment
of the property appraiser.” Fla. Admin. Code R. 12D-8.021(2)(d)7.
14
was to be granted charitable tax exemption for future years
“absent a material change in applicable law or a material change
in Plaintiff’s status or operation,” because exemption can be
waived and entitlement to exemption must be affirmatively
demonstrated annually).
B. Analysis
This unique and detailed legal framework brings us to agree
with Property Appraiser Crapo: administrative finality does not
attach to a VAB decision that is not subsequently adjudicated in
circuit court. Chief among the legal principles driving this result
are the status of Florida’s property appraisers as elected,
independent constitutional officers; the exclusive original
jurisdiction of circuit court in tax assessment matters under the
constitution and sections 26.012(2)(e) and 194.171(1); the de-novo
standard of review required by section 194.036(3); and the one-
year-at-a-time concept embedded in rules, regulations, and
longstanding tax law practice and procedure. These foundational
principles permeate the processes set forth in the governing
statutes, establishing an annual process subject to annual renewal
or revisitation, embodying the concept that “each tax year stands
on its own.” The statutory scheme makes it clear that, while VAB
proceedings may often be useful in informal dispute resolution,
they are not to be accorded preclusive effect.
The dissent seems to argue that the Legislature’s creation and
regulation of VABs, and the role given them, at least does not
preclude the possibility that VAB decisions have administrative
finality effect. See Fla. Export Tobacco Co. v. Dept. of Revenue, 510
So. 2d 936, 955 (Fla. 1st DCA), review denied, 519 So. 2d 986 (Fla.
1987). In Export Tobacco, this Court held that the statutory
authorization of tax refund remedies before the Comptroller or in
Chapter-120 proceedings did not divest the circuit courts of
original exclusive jurisdiction in tax assessment matters and did
not confer res judicata effect upon such proceedings, and that only
the Legislature can specify the extent of an administrative
agency’s quasi-judicial functions. 510 So. 2d at 955. If the
Legislature had intended for VAB decisions to have administrative
finality, it surely would not be difficult to pinpoint the statute so
providing—but there is none. To the contrary, the Legislature has
15
expressly retained a statutory structure under which VAB
decisions have no legal significance whatsoever in subsequent
circuit-court litigation.
The dissent also argues that it is unfair not to give
administrative-finality effect to VAB decisions because it forces
taxpayers to defend their requests for exemptions year after year
even if they think their property and its ownership and use have
not changed from previous years when exemptions were granted.
This argument is misplaced for several reasons. First, as a
threshold factor, this argument overlooks that the statutory and
regulatory framework mandates a year-at-a-time process. Even if
an exemption is granted, and re-application waived in favor of an
automatic renewal, it is only subject to the appraiser’s statutory
right to require a new or updated application. No one goes into this
with an absolute “right” to avoid interacting with the property
appraiser for more than a year.
Second, the nature of the dispute here was, and is, a threshold
legal question—the proper interpretation of the educational
exemption statute. Even if a tax-exemption statute does not
change, there remains the possibility of differing interpretations of
it over time as a body of law develops on it. This is especially true
for a narrowly-applicable tax-exemption statute such as the one at
issue here. One would not expect hordes of lawsuits generating
reams of precedent on every arcane tax exemption, and indeed
judicial precedent can be entirely lacking. A property appraiser’s
initial interpretation of an exemption statute may lie alone and
untested until some precedent is created on the issue, or until a
change of professional judgment—or a change of property
appraiser—occurs. In either event, the property appraiser has not
only the right but the duty to advance and apply the interpretation
deemed legally correct at the time. A new office-holder should not
be bound by erroneous positions taken by a predecessor and not
adopted by an Article-V court. Our disposition of the Academy’s
licensing issue is a perfect example: it turns out Property
Appraiser Crapo’s professional judgment to deny this exemption
was correct.
Third, the Academy’s argument is one-sided, claiming a right
to revisit VAB decisions upon a change in taxpayer facts but not
16
upon a change in circumstances on the property appraiser side.
But a change on the taxpayer side of the equation cannot be the
only route into circuit court. We can envision several
circumstances under which a property appraiser may choose to
litigate an issue that was not previously taken into circuit court.
In addition to a change in interpretation of the law or the election
of a new property appraiser, a property appraiser might choose not
to fight an adverse VAB decision in any given tax year for a variety
of reasons: lacking the budget or personnel or both to litigate; a
cost/benefit analysis making the issue not worth fighting in any
particular year; or changes in tax rates, an increase in the number
and value of exemptions claimed, and economic conditions. When
a significant issue arises that in a property appraiser’s estimation
of the balance of factors merits litigation, the property appraiser
must be free to litigate in the first instance without being bound
by prior VAB decisions; otherwise, the express statutory
requirement of a de-novo standard of review in a circuit court
denominated in the constitution as having original and exclusive
jurisdiction is meaningless. The alternative would force property
appraisers to preemptively litigate all significant tax exemptions
annually lest they be penned in by their own equitable or
economic-reality forbearance of a prior year. They simply do not
have the resources to do that, and if they had to do it, the result
would be to impose significant additional costs and delays on
taxpayers who otherwise would get a bye for one or more years.
Finally, even putting aside the practical point that it is highly
unlikely any elected property appraiser would “force” the same
taxpayer to dispute an exemption ruling year after year, the
statutes even-handedly provide taxpayers as well as property
appraisers the means to obtain finality: file suit in circuit court.
Taxpayers are free to try for a favorable ruling informally and then
go to court if necessary, but also can go directly to circuit court. In
either approach, taxpayers have available and within their control
a clear path for obtaining finality.
In the unique context of ad valorem taxation, which by
constitution, statute, and rule operates on a year-at-a-time cycle
and mandates de-novo review in a circuit court having original and
exclusive jurisdiction, we reject the Academy’s administrative-
finality argument, and reverse the circuit court’s judgment.
17
REVERSED.
RAY, C.J., and WOLF, LEWIS, ROBERTS, ROWE, BILBREY, KELSEY,
WINOKUR, and M.K. THOMAS, JJ., concur.
OSTERHAUS, J., concurs in part in an opinion in which B.L.
THOMAS, J., joins.
MAKAR, J., dissents in an opinion in which WETHERELL and JAY,
JJ., join.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
OSTERHAUS, J., concurring in part.
I concur in the Court’s per curiam opinion, except for the part
about administrative finality. I don’t see the need to decide in
broad strokes whether Value Adjustment Board decisions merit
decisional finality because, regardless of the answer to this issue,
the Academy’s tipsy-coachman argument loses. See Palm Beach
Fla. Hotel & Office Bldg. Ltd. P’ship v. Nantucket Enters., 211 So.
3d 42, 45 (Fla. 4th DCA 2016) (avoiding adjudication of a first
impression issue where the underlying evidence failed to support
the argument). Administrative finality doesn’t apply where the
facts have materially changed. Here, even if administrative
finality applies to VAB exemption decisions, the 2008 decision did
not fit the new facts and changed conditions relied upon by the
Academy to prove its case for the 2014 and 2015 tax-year
exemptions. For this reason, the circuit court and VAB did not err
by declining to apply decisional finality.
The Florida Supreme Court has warned courts and
administrative agencies to apply the doctrine of res judicata “with
‘great caution’ in administrative cases.” Thomson v. Dep’t of Envtl.
Regulation, 511 So. 2d 989, 991 (Fla. 1987). The Court in Thomson
set forth a “proper rule” that res judicata will apply in
administrative cases only if the subsequent case “is not supported
18
by new facts, changed conditions, or additional submissions by the
applicant.” Id. (citing Doheny v. Grove Isle, Ltd., 442 So. 2d 966,
976 (Fla. 1st DCA 1983)); see also Fla. Power Corp. v. Garcia, 780
So. 2d 34, 44 (Fla. 2001).
This case involved new facts, new circumstances, and
additional submissions, as well as an uber-equivocal exemption
decision in 2008. Even the VAB itself refused to follow its own 2008
decision in this case. And it’s not hard to see why.
“Redetermination of issues is warranted if there is reason to doubt
the quality, extensiveness, or fairness of procedures followed in
prior litigation.” B&B Hardware, Inc. v. Hargis Indus., Inc., 135
S. Ct. 1293, 1309 (2015) (quoting Montana v. United States, 440
U.S. 147, 164 n.11 (1979)). In the 2008 case, the VAB relied
completely upon the Special Magistrate’s recommendation, which
barely reached a conclusion on the Academy’s exemption after
reviewing the law and evidence. The Special Magistrate granted
the exemption because it considered the statute “ambiguous and
very difficult to comprehend”:
2. The undersigned has read this statute again and again
to try to understand its meaning. The statute appears to
be unclear. There is no case law or other information
which the undersigned could find which clarifies the
statute or provides any assistance with its interpretation.
....
6. The Commission for Independent Education issued the
Petitioner an annual license. . . .
7. This certification appears to allow the Petitioner to
come within the meaning of “educational institution” as
set forth in the statute. This would allow it to obtain an
educational tax exemption.
8. This issue needs to be addressed by the Legislature to
provide clarity. Reviewing this issue by reading all the
statutes which are involved would seem to suggest that
the Petitioner should be qualified as an educational
institution and receive the appropriate tax
19
exemption. . . . Taking all the above into consideration
the undersigned is going to recommend that the petition
be granted because the statute is ambiguous and very
difficult to comprehend.
(Emphasis added.) This result is exactly the opposite of how tax
exemption issues are supposed to be decided. See Nat’l Ctr. for
Construction Educ. & Research Ltd., Corp. v. Crapo, 248 So. 3d
1256, 1257-58 (Fla. 1st DCA 2018) (citing Sowell, 192 So. 3d at 30)
(requiring tax exemptions to be strictly construed, with
ambiguities resolved against the claimed exemption). The 2008
VAB, in turn, checked a box on the 2008 “Final Decision” form
indicating that it “considered and adopts all the special
magistrate’s findings of fact and conclusions of law (attached).”
With such a vacillating 2008 order, it is not surprising that in
2014, the VAB put no stock in its own prior order. It declined the
Academy’s invitation to decide the 2014 and 2015 tax-year issues
based on the 2008 decision, giving “no weight to the recommended
decision of the VAB special magistrate from 2008, nor to the fact
that the exemption was granted in that instance.” It chose instead
to make the exemption decision for tax years 2014 and 2015 based
on the current evidence. And the circuit court made the same
decision to let the 2014 and 2015 tax years stand on their own
validity. Because of the doubtful quality of the 2008 decision and
process, I see no error in the VAB and circuit court decisions
against applying administrative finality and would not tipsy-
coachman affirm this case. See Powell v. State, 120 So. 3d 577, 591
(Fla. 1st DCA 2013) (remarking that the tipsy coachman doctrine
“does not compel [appellate courts] to overlook deficient records
and blaze new trails”).
In addition to the decisional deficiencies in the 2008 order, the
case record in this case for tax years 2014 and 2015 contained new
and different evidence. To begin with, the 2014-15 evidence
included a new parcel that was not part of the 2008 case. According
to the Academy’s summary judgment evidence, it purchased an
adjacent property in late 2014, that it claimed to be mostly used
for educational purposes (part was leased to a third party for
purposes not identified in the record). The Academy sought for an
educational exemption to be applied to this property too, according
20
to the ratio of its educational use for the first time in this litigation.
The question of whether this property qualified for the educational
exemption was not part of the 2008 case. And administrative
finality does not apply where there are new facts and changed
conditions. Thomson, 511 So. 2d at 991. Each case must stand on
its own.
The Academy also offered new exhibits and affidavits
attesting to its ongoing educational work on the properties.
Whereas the Special Magistrate’s 2008 decision hinged on the
Academy possessing a “certification appear[ing] to allow the
Petitioner to come within the meaning of ‘educational institution,’”
the Academy put “voluminous” evidence into the 2014-2015 record
of this case, as the Special Magistrate recognized. An affidavit
from the Academy’s Executive Director gave up-to-date
information regarding educational programs offered on-site,
numbers of students, descriptions of faculty and property, etc.,
with supporting exhibits. The Executive Director’s affidavit also
addressed state approval for the Academy’s new bachelor’s degree
program: “On January 8, 2014, the Florida Department of
Education Commission for Independent Education approved the
Academy’s request for a bachelor’s degree program in Health
Science.“ And it submitted other post-2008 exhibits, including: an
application and documentation submitted to the Commission in
2014; its Renewal of Accreditation from ACAOM (2011); an
approval letter from the United States Department of Education
(2015); and a state Department of Revenue Consumer’s Certificate
of Exemption (2013). This evidence was key to bolstering the
Academy’s case for the 2014 and 2015 exemptions because of the
statutory importance of showing that it conducted “regular classes
and courses.” § 196.012(5), Fla. Stat.
For his part, Property Appraiser Crapo disputed the efficacy
of this evidence in the circuit court:
It is the Defendant’s burden to establish that they
conduct regular classes and courses of study “required for
eligibility to certification by . . . the State Department of
Education of Florida . . .”. (DOE) § 196.012(5), Fla. Stat.
Davis v. Macedonia Hous. Auth., 641 So. 2d 131 (Fla. 1st
DCA 1994). The Defendant has never tendered any
21
evidence or rule of the DOE establishing the required
regular classes or courses. . . .
And contrary to the dissent’s view, I don’t see a stipulation from
the Property Appraiser in the record below or read the briefs to say
that everything material remained static from 2008 to 2014. Nor
did the circuit court make such a finding. The record shows that
the parties contested this case based upon the current evidence.
Thus, under administrative finality principles, because of the new
and contested evidence, it was well within the discretion of the
VAB and circuit court to resolve the case based on the current
evidence instead of deferring to the 2008 decision. See Delray Med.
Ctr., Inc. v. State Agency for Health Care Admin., 5 So. 3d 26, 29
(Fla. 4th DCA 2009) (determining whether a significant change in
circumstances has occurred for administrative finality purposes
lies primarily within the discretion of the agency).
For these reasons, because of the equivocal 2008 decision and
the existence of new facts, changed conditions, and post-2008
evidentiary submissions, and especially in view of the Florida
Supreme Court’s admonition to exercise “great caution” in
applying decisional finality in administrative cases, I see no error
in the decisions of the circuit court and VAB on this issue. Thus, I
would not tipsy-coachman affirm this case.
_____________________________
MAKAR, J., dissenting.
Florida’s sixty-seven value adjustment boards, which issue
formal written rulings in hundreds of property tax disputes
annually after notice, evidentiary hearings, and many other due
process protections, are quasi-judicial tribunals to which
principles of finality and preclusion apply. For this reason, a
property appraiser who fails to challenge a tax exemption
previously granted by a value adjustment board may not relitigate
the exemption absent a showing of changed circumstances, which
admittedly do not exist in this case. Affirmance is thereby
required.
22
I.
The Academy for Five Element Acupuncture, Inc., was
founded in 1995 as a not-for-profit private postsecondary school to
provide academic instruction and clinical training in acupuncture,
which is a regulated medical profession in Florida. See Chapter
457, Florida Statutes. The Academy held an educational tax
exemption under 196.012(5), Florida Statutes, on its real and
personal property in Broward County for over a decade.
In 2008, the Academy moved to Gainesville, Florida, where it
purchased property in the southeastern quadrant of historic
downtown and applied for the same tax exemption. Edward A.
Crapo, Alachua County’s property appraiser since his election in
1980, denied the exemption, asserting the Academy was not an
“educational institution” for exemption purposes. Crapo and the
Academy litigated the exemption in the Alachua County Value
Adjustment Board (VAB), which ruled that the Academy was
entitled to the educational exemption, a decision Crapo could have
appealed, but did not.
Despite admitting that nothing had changed, Crapo denied
the Academy’s exemption in 2014 and has done so for each
subsequent tax year, spawning this litigation in which the
Academy again prevailed. A question on appeal is whether a
property appraiser, who admits no change in circumstances, is
barred by principles of res judicata from re-litigating a property
tax exemption previously granted in a final order of a value
adjustment board after an adjudicatory hearing where the
property appraiser failed to appeal the prior decision. The question
is answered by reviewing whether principles of res judicata apply
to value adjustment boards, and, if so, whether any countervailing
reasons exist to judicially exclude value adjustment boards from
their application.
II.
Our Nation’s judicial systems have long recognized that
principles of finality and preclusion apply not only to courts but to
federal and state administrative bodies acting in a quasi-judicial
capacity as well.
23
We have long favored application of the common-law
doctrines of collateral estoppel (as to issues) and res
judicata (as to claims) to those determinations of
administrative bodies that have attained finality. “When
an administrative agency is acting in a judicial capacity
and resolves disputed issues of fact properly before it
which the parties have had an adequate opportunity to
litigate, the courts have not hesitated to apply res
judicata to enforce repose.” . . . The principle holds true
when a court has resolved an issue, and should do so
equally when the issue has been decided by an
administrative agency, be it state or federal, . . . which
acts in a judicial capacity.
Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 107-08
(1991) (citations omitted). The justification for preclusion is the
“sound and obvious principle of judicial policy that a losing litigant
deserves no rematch after a defeat fairly suffered, in adversarial
proceedings, on an issue identical in substance to the one he
subsequently seeks to raise.” Id. at 107. Allowing re-litigation of
matters previously resolved would “impose unjustifiably upon
those who have already shouldered their burdens, and drain the
resources of an adjudicatory system with disputes resisting
resolution.” Id. at 107-08 (citation omitted).
A.
Florida is no different, where it is well-established that the
decisions of governmental bodies acting in a quasi-judicial capacity
are subject to principles of res judicata and collateral estoppel. See
Thomson v. Dep’t of Envtl. Regulation, 511 So. 2d 989, 991 (Fla.
1987) (“It is now well settled that res judicata may be applied in
administrative proceedings.”); Holiday Inns, Inc. v. City of
Jacksonville, 678 So. 2d 528, 529 (Fla. 1st DCA 1996) (“Res
judicata (and collateral estoppel) ‘is applicable to rulings or
decisions of administrative bodies[.]’”) (citation omitted); Jet Air
Freight v. Jet Air Freight Delivery, Inc., 264 So. 2d 35, 40 (Fla. 3d
DCA 1972) (same); Metro. Dade Cty. Bd. of Cty. Comm’rs v.
Rockmatt Corp., 231 So. 2d 41, 44 (Fla. 3d DCA 1970) (same);
Rubin v. Sanford, 168 So. 2d 774, 775 (Fla. 3d DCA 1964) (“There
is little question that administrative proceedings are subject to the
24
doctrine of res judicata, 9 and the courts of this state have similarly
so concluded.”) (footnote omitted). These principles of decisional
finality apply unless a showing is made that a substantial change
of circumstances has occurred that justifies a different result, as
discussed in more detail later in this opinion. See generally
Thomson, 511 So. 2d at 991 (proper rule “is that res judicata will
apply only if the second application is not supported by new facts,
changed conditions, or additional submissions by the applicant.”);
Holiday Inns, Inc., 678 So. 2d at 528 (same).
A governmental body acts in a quasi-judicial manner when,
after notice and a hearing, it enters a judgment based on the
evidence presented. See, e.g., Broward Cty. v. La Rosa, 505 So. 2d
422, 423 (Fla. 1987) (“An administrative agency conducts a quasi-
judicial proceeding in order to investigate and ascertain the
existence of facts, hold hearings, and draw conclusions from those
hearings as a basis for their official actions.”); Anoll v. Pomerance,
363 So. 2d 329, 331 (Fla. 1978) (“a judgment becomes judicial or
quasi-judicial, as distinguished from executive, when notice and
hearing are required and the judgment of the board is contingent
on the showing made at the hearing.”); De Groot v. Sheffield, 95
So. 2d 912, 915 (Fla. 1957) (“. . . when notice and a hearing are
required and the judgment of the board is contingent on the
showing made at the hearing, then its judgment becomes judicial
9 See Fla. Fish & Wildlife Conservation Comm’n v. Wakulla
Fishermen’s Ass’n, Inc., 141 So. 3d 723, 726 (Fla. 1st DCA 2014)
(“’The doctrine of res judicata applies when four identities are
present: (1) identity of the thing sued for; (2) identity of the cause
of action; (3) identity of persons and parties to the action; and (4)
identity of the quality of the persons for or against whom the claim
is made.’ Topps v. State, 865 So. 2d 1253, 1255 (Fla.2004).”).
“Administrative finality” is a phrase sometimes used to describe
res judicata in the administrative context. Delray Med. Ctr., Inc. v.
State Ag. for Health Care Admin., 5 So. 3d 26, 29 (Fla. 4th DCA
2009) (“In the field of administrative law, the counterpart to res
judicata is administrative finality.”). See also Coral Reef Nurseries,
Inc. v. Babcock Co., 410 So. 2d 648, 651 (Fla. 3d DCA 1982) (“The
doctrine of administrative res judicata is firmly entrenched as part
of the decisional law of the State of Florida in relation to zoning
cases.”).
25
or quasi-judicial as distinguished from being purely executive.”);
cf. Teston v. City of Tampa, 143 So. 2d 473, 476 (Fla. 1962) (holding
that order of board of police and fireman’s pensions fund not quasi-
judicial because “it was a purely administrative determination
without hearing or adversary evidence,” noting that “the statute
under which the [board] operates makes no requirement whatever
for a notice and hearing preliminary to decision.”).
[T]he test of the quasi judicial function . . . [is] whether or
not the statutory tribunal had exercised a statutory
power given it to make a decision having a judicial
character or attribute and consequent upon some notice
or hearing provided to be had before it as a condition for
the rendition of the particular decision made.
W. Flagler Amusement Co. v. State Racing Comm’n, 165 So. 64, 65
(Fla. 1935) (“A judicial or quasi judicial act determines the rules of
law applicable, and the rights affected by them, in relation to past
transactions.”). Similarly,
[i]f the affected party is entitled by law to the essentially
judicial procedures of notice and hearing, and to have the
action taken based upon the showing made at the
hearing, the activity is judicial in nature. If such activity
occurs other than in a court of law, we refer to it as quasi-
judicial.
Modlin v. City of Miami Beach, 201 So. 2d 70, 74 (Fla. 1967); see
generally Robert Lincoln & Sidney F. Ansbacher, What’s A Local
Government Got to Do to Get Reviewed Around Here? Review of
Local Administrative Actions by Common Law Certiorari After
Pleasures II v. City of Sarasota, 77 FLA. B.J. 50, 51 (2003)
(discussing four minimum requirements for quasi-judicial
hearings as notice, an informal hearing, a written decision based
on the record, and fairness protections including an unbiased
decisionmaker protected from ex parte contacts and political
influence).
26
B.
Value adjustment boards in Florida easily meet the test for
whether they act in a quasi-judicial manner in tax disputes: they
are statutorily created tribunals specifically empowered to
adjudicate and render binding decisions after notice, a hearing and
broad due process protections. They are perfect examples of the
type of statutorily created administrative bodies that the state
constitution says may be given quasi-judicial powers. Art. V, § 1,
Fla. Const. (“Commissions established by law, or administrative
officers or bodies may be granted quasi-judicial power in matters
connected with the functions of their offices.”); see, e.g., Verdi v.
Metro. Dade County, 684 So. 2d 870, 874 (Fla. 3d DCA 1996)
(county code enforcement proceedings that involve hearing officer
rulings appealable to the circuit court “fall squarely within the
parameters of a constitutionally authorized quasi-judicial
proceeding.”).
Value adjustment boards are among the most structured and
regulated administrative tribunals in the State of Florida. They
operate within a highly detailed statutory and regulatory
framework, the sole purpose of which is to facilitate the full and
fair adjudication of disputes as to property tax assessments,
exemptions, classifications, deferrals, and related matters. Their
raison d’être is to adjudge property tax disputes. An entire chapter
of the Florida Statutes—Chapter 194, entitled “Administrative
and Judicial Review of Property Taxes”—is devoted to value
adjustment boards and their role in the adjudication of property
tax disputes. See §§ 194.011-194.3015, Fla. Stat. (2019).
Supplementing this 30+ pages/9000+ words of statutory language
are voluminous regulations, adopted by the Department of
Revenue, to implement this statutory structure, consisting of
thirty-seven rules—all with multiple subparts, sub-subparts and
sub-sub-subparts—whose word counts far exceed that of their
implementing statutes (approximately 20,000+ words). See Fla.
Admin. Code R. 12D-9.001 to 12D-9.038 (2019).
Value adjustment board hearings are not subject to the
general administrative process statute, Chapter 120, for good
reason: they have their own hyper-detailed statutory framework.
§ 194.034(1)(i), Fla. Stat. (2019). (“Chapter 120 does not apply to
27
hearings of the value adjustment board.”); see also Kent Wetherell,
The New Burdens of Proof in Ad Valorem Tax Valuation Cases, 25
FLA. ST. U. L. Rev. 185, 193–94 (1998) (“The hearings on the
petitions, whether conducted by the value adjustment board or a
special master, are quasi-judicial in nature and must be conducted
in accordance with the rules adopted by DOR.”).
Value Adjustment Board Composition & Independence. Value
adjustment boards are designed to provide for collegial and ethical
decision-making, insulated from improper influences, political and
otherwise. Each county has a value adjustment board consisting of
five members: two county commissioners, one school board
member, and two citizens. 10 All value adjustment board members
are subject to ethical restrictions including recusal standards and
prohibitions on conflicts of interest. 11 Each value adjustment board
is required to have its own legal counsel, who must be a private
practitioner with at least five years of experience. 12 Legal counsel
has broad responsibilities to both the board itself as well as the
fairness of the process. 13 Like board members, legal counsel are
10One citizen member, who is appointed by the county, must
own homestead property in that county; the other, who is
appointed by the school district, must own a business occupying
commercial space in that district. § 194.015, Fla. Stat. (2019).
11See Fla. Admin. Code R. 12D-9.022 (2019). Disqualification
or Recusal of Special Magistrates or Board Members.
12 Id. R. 12D-9.008(1)-(2) (2019) (“Each value adjustment
board must appoint private legal counsel to assist the board . . .
This legal counsel must be an attorney in private practice . . . [and]
must have practiced law for over five years” prior to appointment.);
see also § 194.015, Fla. Stat.
13 A primary role is advising the board to ensure its actions
are lawful and done “in a manner that will promote and maintain
a high level of public trust and confidence in the administrative
review process.” Fla. Admin. Code R. 12D-9.009(1)(b) (2019). Legal
counsel “is not an advocate for either party in a value adjustment
board proceeding, but instead ensures that the proceedings are fair
28
subject to ethical restrictions and prohibitions on conflicts of
interest. 14
Special Magistrates. Value adjustment boards are assisted in
their adjudicatory responsibilities by special masters who are
experienced attorneys with specialized training and
qualifications. Their role “is to conduct hearings, take testimony
15
and make recommendations to the board regarding petitions filed
before the board.” 16 § 194.035, Fla. Stat. (2019); Fla. Admin. Code
R. 12D-9.011(1) (2019). Special magistrates must meet general
qualifications and specific ones depending upon the type of issues
to be heard. 17 For instance, a special magistrate appointed to hear
a tax exemption issue “must be a member of The Florida Bar, must
and consistent with the law.” Id. R. 12D-9.009(1)(c); see generally
§ 194.015, Fla. Stat.
14Legal counsel “should avoid conflicts of interest or the
appearance of a conflict of interest in their representation.” Fla.
Admin. Code R. 12D-9.008(5).
15 Counties with populations over 75,000 must have special
magistrates, who are optional in counties with lesser populations.
§ 194.035(1), Fla. Stat (2019); Fla. Admin. Code R. 12D-9.010(1)-
(2) (2019).
16 Their duties include: “(a) Accurately and completely
preserve all testimony, documents received, and evidence admitted
for consideration; (b) At the request of either party, administer the
oath upon the property appraiser or tax collector, each petitioner
and all witnesses testifying at a hearing; (c) Conduct all hearings
in accordance with the rules prescribed by the department and the
laws of the state; and (d) Make recommendations to the board
which shall include proposed findings of fact, proposed conclusions
of law, and the reasons for upholding or overturning the
determination of the property appraiser or tax collector, also see
Rule 12D-9.030, F.A.C.” Fla. Admin. Code R. 12D-9.011(1)(a)-(d)
(2019).
17 Id. R. 12D-9.010(4); See § 194.035, Fla. Stat.
29
have at least five years of experience in the area of ad valorem
taxation, and must receive training provided by the department.” 18
The “selection of a special magistrate must be based solely on the
experience and qualification of such magistrate, and must not be
influenced by any party, or prospective party, to a board
proceeding or by any such party with an interest in the outcome of
such proceeding.” 19 Special magistrates must adhere to the
disqualification and recusal standards that apply to board
members. 20
Board Clerks. Each value adjustment board has a clerk with
broad responsibilities: to ensure that statutory requirements are
met, to make petition forms available to the public, to receive
petitions and schedule hearings, and to ensure notice of and public
access to all board hearings. § 194.011, Fla. Stat. (2019); Fla.
Admin. Code R. 12D-9.007(1)-(4) (2019). The clerk “is the official
record keeper for the board and shall maintain a record of the
proceedings,” including “(a) All filed documents; (b) A verbatim
record of any hearing; (c) All tangible exhibits and documentary
evidence presented; (d) Any meeting minutes; and (e) Any other
documents or materials presented on the record by the parties or
by the board or special magistrate.” Fla. Admin. Code R. 12D-
9.007(12).
Formal adjudication process. The adjudication process used
by value adjustment boards has every safeguard of due process
necessary for a quasi-judicial body and more: notice, the
opportunity to be heard directly or through legal counsel (or other
18 § 194.035(1), Fla. Stat.; Fla. Admin. Code R. 12D-
9.010(4)(d)(1). As an alternative, the special magistrate may be “a
member of The Florida Bar with at least three years of experience
in ad valorem taxation and who has completed board training
provided by the department including the examination[.]” Id. R.
12D-9.010(4)(d)(1).
19 § 194.035(1), Fla. Stat.; Fla. Admin. Code R. 12D-
9.010(5)(b).
20 Fla. Admin. Code R. 12D-9.022. Disqualification or Recusal
of Special Magistrates or Board Members.
30
specified property-related professionals), the right to present
evidence, the right to cross-examination, the right to an unbiased
decision and decision-maker, the right to appeal, and so on. See
Bush v. City of Mexico Beach, 71 So. 3d 147, 150 (Fla. 1st DCA
2011) (“A quasi-judicial hearing generally meets basic due process
requirements if the parties are provided notice of the hearing and
an opportunity to be heard. In quasi-judicial zoning proceedings,
the parties must be able to present evidence, cross-examine
witnesses, and be informed of all the facts upon which the
commission acts.”) (quoting Jennings v. Dade Cty., 589 So. 2d 1337,
1340 (Fla. 3d DCA 1991)). Indeed, a list of eighteen specific due
process rights established by law are granted to taxpayers in value
adjustment board proceedings. See Fla. Admin. Code R. 12D-9.001
(2019). (Entitled “Taxpayer Rights in Value Adjustment Board
Proceedings.”) (listed in Appendix); see generally Art. I, § 25, Fla.
Const. (“By general law the legislature shall prescribe and adopt a
Taxpayers’ Bill of Rights that, in clear and concise language, sets
forth taxpayers’ rights and responsibilities and government's
responsibilities to deal fairly with taxpayers under the laws of this
state.”); § 192.0105, Fla. Stat. (creating a “Florida Taxpayer's Bill
of Rights for property taxes and assessments” listing twenty-nine
specific rights and obligations to “guarantee that the rights,
privacy, and property of the taxpayers of this state are adequately
safeguarded and protected during tax levy, assessment, collection,
and enforcement processes administered under the revenue laws
of this state.”).
The decisional process by which value adjustment boards
adjudicate property tax disputes parallels—and exceeds in some
regards—that of administrative entities governed by Chapter 120.
Taxpayers objecting to assessments have the right to an informal
conference with the property appraiser, but they may also file a
formal petition directly with the board. § 194.011(2) & (3), Fla.
Stat.; Fla. Admin. Code R. 12D-9.001(b) & (c). The form, content,
and fees for petitions are set forth in detail in the administrative
code, which parallels that for civil courts, specifying in detail the
processing of late petitions, how filing and service of legal
documents are accomplished, and so on. See Fla. Admin. Code R.
12D-9.015 (2019). Hearings are scheduled based on a range of
factors including the complexity of issues. Id. R. 12D-9.019(1)(b)
(2019). Notices of hearings are required to be served in a specified
31
manner at least 25 days beforehand. Id. R. 12D-9.019(3)(a). Prior
disclosure of evidence, testimony and documents is required. 21
Admissibility and use of evidence is governed by the trier of fact
who consults with the board’s legal counsel and who must reflect
her ruling in the record. 22
Appeals. By statute, the property appraiser may appeal under
specified circumstances such as a legal error by the board or a
specific violation of an administrative rule. § 194.036(1)(a), Fla.
Stat. (2019). Property owners may appeal by bringing “an action to
contest a tax assessment” under section 194.171, Florida Statutes,
which provides for circuit courts to have original jurisdiction in tax
cases. In either case, the “circuit court proceeding shall be de novo,
and the burden of proof shall be upon the party initiating the
action.” Id. § 194.036(3). 23
C.
The 2008 and 2014 VAB Proceedings. The formal adjudication
process, as described above, applied to both the 2008 and 2014
hearings in this case. In 2008, the Academy petitioned the VAB
and the case was assigned to a special magistrate who held an
21 See Id. R. 12D-9.020(1)(a) (2019).
22 Id. R. 12D-9.025(2)(d) (2019).
23 Absent an appeal by agencies subject to Chapter 120 or one
granted by statute (as is the case here), review of quasi-judicial
decisions of governmental bodies is via certiorari. Fla. R. App. P.
9.190(b)(3) (2019) (“Review of quasi-judicial decisions of any
administrative body, agency, board, or commission not subject to
the Administrative Procedure Act shall be commenced by filing a
petition for certiorari in accordance with rules 9.100(b) and (c),
unless judicial review by appeal is provided by general law.”); see
generally Victoria L. Cecil, The Appealing Nature of Local Code
Enforcement Board Decisions, 82 FLA. B.J. 42, 42 (2008)
(discussing “often overlooked” exception that appellate review for
quasi-judicial decisions of governmental bodies may be provided by
general law).
32
evidentiary hearing, accepted and evaluated evidence, and heard
legal argument from attorneys representing the Academy and
Crapo. The special master issued its written report, which
contained detailed “Findings of Fact and Conclusions of Law” for
the VAB’s review and consideration. The VAB issued a “Final
Decision,” dated November 16, 2008, that adopted the report’s
findings of fact and conclusions of law and granted the Academy’s
petition. Crapo had the right to appeal the VAB’s final decision to
circuit court but did not do so.
The Academy retained its exemption from 2008 through 2013.
In June 2014, however, Crapo issued a notice disapproving the
exemption, asserting that the Academy did not meet the statutory
definition of an “educational institution,” yet asserting no changed
factual or legal circumstances. To challenge the denial, the
Academy petitioned the VAB, and a hearing was held before a
different special magistrate, who—contrary to the 2008
disposition—recommended denial of the Academy’s petition. The
VAB adopted the special magistrate’s findings of fact, but rejected
her legal conclusion. Crapo appealed to the circuit court, which—
upon a factual stipulation, motions for summary judgment and
extensive legal memos, and an evidentiary hearing—affirmed the
VAB’s final decision, 24 finding that the Academy met the definition
of “educational institution,” though rejecting its argument that the
doctrine of res judicata applied to the VAB’s 2008 final judgment.
Crapo appealed the exemption issue and the Academy cross-
appealed the decisional finality issue, this opinion addressing the
latter.
III.
A.
The extensive statutory and regulatory overlay that governs
value adjustment boards and their adjudication of property tax
disputes, including extensive due process protections, indisputably
24 The trial court’s order held that the Academy “establish[ed]
its right to an educational institution exemption for tax years 2014
and 2015” because the parties agreed to resolve both tax years in
this proceeding.
33
establish that judgments of value adjustment boards arising from
the formal adjudication process are quasi-judicial and subject to
principles of res judicata and decisional finality. Just like the
quasi-judicial decisions of other governmental bodies in Florida,
the decisions of value adjustment boards are entitled to
precedential effect in the year issued as well as subsequent years
unless sufficient changed circumstances are demonstrated. See
Delray Med. Ctr., Inc., 5 So. 3d at 29 (“Florida courts do not apply
the doctrine of administrative finality when there has been a
significant change of circumstances or there is a demonstrated
public interest.”); Univ. Hosp., Ltd. v. State, Agency for Health
Care Admin., 697 So. 2d 909, 912 (Fla. 1st DCA 1997) (“res judicata
cannot bar a subsequent application for a permit if the second
application is ‘supported by new facts, changed conditions, or
additional submissions by the applicant.’”); Holiday Inns, Inc., 678
So. 2d at 528 (same).
In this District, application of res judicata to quasi-judicial
decisions of administrative bodies has been clearly established for
decades. In Holiday Inns, Inc. v. City of Jacksonville, a precedent
with striking parallels to this case, the lessee of an abandoned
hotel was cited in 1994 for violations of the City’s ordinance code.
678 So. 2d at 528. A hearing was held before the Municipal Code
Enforcement Board, which ruled that the lessee, not the owner,
was the legally responsible party for the violations. Due to the
lessee’s continued non-compliance, a year later in 1995 the Board
assert the identical code violations, but this time ruled that the
owner was the responsible party. The owner sought review in the
circuit court, which affirmed the Board’s ruling. This Court,
however, reversed based on principles of decisional finality that
applied to the Board’s actions, concluding that the city was barred
from re-litigating the issue of who was responsible for the ongoing
code violations. The Court stated the general principle that:
Res judicata (and collateral estoppel) “is applicable to
rulings or decisions of administrative bodies ... unless it
can be shown that since the earlier ruling thereon there
has been a substantial change of circumstances relating
to the subject matter with which the ruling was
concerned sufficient to promote or prompt a different or
contrary determination.”
34
Id. at 529 (quoting Rockmatt, 231 So. 2d at 44 (applying principles
of res judicata to zoning board ruling where “no such showing was
made or attempted in this instance” of a substantial change of
circumstances)); see also Jet Air Freight, 264 So. 2d at 40 (stating
“[w]here an administrative agency is acting in a judicial capacity
and resolves disputed issues of fact properly before it, as to which
parties have had an adequate opportunity to litigate, the court will
apply res judicata or collateral estoppel to enforce repose.”).
Just like the Academy in this case, the hotel owner in Holiday
Inns pointed out that nothing had changed from the prior year that
justified a departure from the Board’s 1994 ruling. This Court
agreed, stating:
. . . The second hearing pertained to the same violations
on the same piece of property, and there had been no
substantial change in the parties’ legal status as to the
subject property prior to the second hearing before the
code enforcement board. Under these facts, we find that
the board was without power to reverse its previous
determination concerning liability.
678 So. 2d at 529-30 (footnotes omitted) (emphasis added).
Applying the language of Holiday Inns here, the subsequent VAB
proceeding in 2014 “pertained to the same [exemption] on the same
piece of property, and there had been no substantial change”
affecting the property’s legal status. Under these circumstances,
the VAB’s 2007 ruling precluded a reversal of the exemption
previously granted, there being no changed circumstances (let
alone a substantial change).
Notably, in Holiday Inns the “city candidly concede[d] that
while they did not seek a rehearing or appeal the previous order
that the second proceeding was brought to correct a mistake of law
made by the board in that order.” Id. at 530 n.3. (emphasis added).
That’s exactly what happened here. Crapo did not seek rehearing
or appeal the 2007 VAB order; instead, he waited and later brought
the 2014 proceeding to correct what he viewed as a mistaken legal
ruling by the VAB in 2014. Holiday Inns precludes precisely this
35
type of duplicative litigation that offends basic principles of finality
where no change in facts or law are alleged.
B.
Nonetheless, Crapo and amici make several counter-vailing
arguments that res judicata should not apply to value adjustment
board decisions, but they are either not well taken or based on
policy rather than legal grounds.
1.
Crapo and amici urge that because de novo review of value
adjustment board decisions is available on appeal in circuit courts,
section 194.036(1)(a), Florida Statutes, final judgments of value
adjustment boards are entitled to no preclusive effect. He claims
that his failure to pursue an available appellate remedy in 2008 is
irrelevant because only a circuit court judgment has preclusive
effect and value adjustment board decisions have no effect other
than in the tax year issued.
His argument, in large measure, was rejected by the United
States Supreme Court in B & B Hardware, Inc. v. Hargis Indus.,
Inc., 135 S. Ct. 1293, 1303 (2015), which recently addressed
whether the availability of de novo review on appeal of an
administrative tribunal’s judgment operates to void or nullify the
preclusive effect of the tribunal’s judgment where no appeal is
taken. It resoundingly, and convincingly, explained why it does
not.
In an opinion by Justice Alito, the Court noted that its own
cases and the Restatement of Judgments “make clear that issue
preclusion is not limited to those situations in which the same
issue is before two courts. Rather, where a single issue is before a
court and an administrative agency, preclusion also often applies.”
Id. at 1303.
Indeed, this Court has explained that because the
principle of issue preclusion was so “well established” at
common law, in those situations in which Congress has
authorized agencies to resolve disputes, “courts may take
36
it as given that Congress has legislated with the
expectation that the principle [of issue preclusion] will
apply except when a statutory purpose to the contrary is
evident.” . . . This reflects the Court’s longstanding view
that “‘[w]hen an administrative agency is acting in a
judicial capacity and resolves disputed issues of fact
properly before it which the parties have had an adequate
opportunity to litigate, the courts have not hesitated to
apply res judicata to enforce repose.’”
Id. (emphasis added) (citation omitted). Buttressing the
highlighted principle, the Court relied on the Restatement of
Judgments, which explains (with limitations not applicable here)
that “a valid and final adjudicative determination by an
administrative tribunal has the same effects under the rules of res
judicata, subject to the same exceptions and qualifications, as a
judgment of a court”). Id. (quoting Restatement (Second) of
Judgments § 83(1), at 266) (emphasis added).
The Court also noted that neither the federal statute at issue
nor its structure “forbid issue preclusion.” B & B Hardware, Inc.,
135 S. Ct. at 1305. Courts “take it as a given” that a well-
established common law principle of adjudication, such as the
application of res judicata to quasi-judicial decisions, applies
“except ‘when a statutory purpose to the contrary is evident.’”
Astoria Fed. Sav. & Loan Ass’n, 501 U.S. at 108 (citation omitted).
Because it is “taken as a given” that res judicata principles apply
to quasi-judicial decisions, a statute explicitly saying the contrary
is required to overcome this presumption. None exists as to value
adjustment boards in Florida, making it illogical and contrary to
precedent to dictate that the legislature must affirmatively grant
res judicata effect to their quasi-judicial decisions. That’s precisely
backwards; it takes an ipse dixit wand to judicially nullify what
the United States Supreme Court has said is taken as a given.
And the fact that de novo review was available on appeal to
the district court did not diminish the preclusive effect of the un-
appealed adverse decision.
Granted, one can seek judicial review of a TTAB
[Trademark Trial and Appeal Board] registration
37
decision in a de novo district court action, and some courts
have concluded from this that Congress does not want
unreviewed TTAB decisions to ground issue preclusion. .
. . But that conclusion does not follow. Ordinary
preclusion law teaches that if a party to a court proceeding
does not challenge an adverse decision, that decision can
have preclusive effect in other cases, even if it would
have been reviewed de novo.
B & B Hardware, Inc., 135 S. Ct. at 1305. (emphasis added) (citing
Restatement (Second) of Judgments § 28, Comment a and
Illustration 1). The highlighted language makes clear that
preclusion principles are not affected by the availability of a de
novo appeal such as that provided in section 194.036(1)(a), Florida
Statutes. Stated differently, ordinary preclusion law establishes
that an unchallenged adverse decision of a value adjustment board
has preclusive effect “even if it would have been reviewed de novo”
in the circuit court. Imagine if the legislature amended Florida law
to allow county court decisions to be appealed to the circuit courts
for de novo review. It is unimaginable that by simply allowing
more generous appellate review the legislature intended to deprive
un-appealed county court judgments of preclusive effect in
subsequent court proceedings.
The principles of B & B Hardware, Inc., are consistent with
the legal principle in Florida that res judicata applies to decisions
of quasi-judicial bodies absent some changed circumstances. After
an adequate opportunity to litigate the exemption issue, Crapo
could have challenged the 2008 VAB decision by seeking de novo
relief in the circuit court, but he did not. Ordinary preclusion
principles hold that the VAB’s decision is res judicata, and that
Crapo’s later challenge to the Academy’s exemption is subject to
decisional finality because it is based on the identical facts and
legal issues previously litigated and decided in the Academy’s
favor in 2008. Having taken no steps to appeal that determination,
Crapo cannot now seek to annul the basis of that decision absent
some relevant change in either the factual basis for the Academy’s
exemption or the applicable law since that time. Because no
changed circumstances exist, the Academy was justified in relying
on the prior VAB determination as to its exemption. It was error
for the trial court to allow Crapo’s challenge to proceed.
38
2.
On a related point, Crapo and amici suggest that only circuit
courts have jurisdiction to adjudicate tax disputes, but they
overlook that circuit courts do not have “exclusive original
jurisdiction” over property tax matters. To the contrary, when
article V of the state constitution was amended in 1972, the
schedule to the amendment set forth in section 20(c)(3) provided
for such jurisdiction (“involving legality of any tax assessment”)
after the amendment’s effective date but only “until changed by
general law consistent with sections 1 through 19 of this article[.]”
Art. V, § 20(c)(3), Fla. Const. (emphasis added). As explained in
Florida Export Tobacco Co., Inc. v. Department of Revenue,
“[s]ection 20, being a schedule to article V, was intended to provide
for the transition from the old to the new court system and served
to preserve the existing jurisdiction of all courts ‘until changed by
general law’ consistent with sections 1 through 19 of article V.” 510
So. 2d 936, 948 (Fla. 1st DCA 1987). The 1972 constitutional
changes “did not, therefore, abrogate the existing exclusive
original jurisdiction of circuit courts in such cases, but merely
provided that such jurisdiction could be expressly ‘changed by
general law.’” Id. at 949 (emphasis added).
General law has expressly changed how property tax disputes
are handled by empowering value adjustment boards to adjudicate
a wide range of property tax matters with de novo appellate review
in the circuit courts, which also continue to have original
jurisdiction—but not exclusive original jurisdiction—in tax cases
filed there directly. The specific jurisdictional statute in the tax
code dealing with tax matters does not use the word “exclusive.”
See § 194.171(1), Fla. Stat. (2019) (“The circuit courts have original
jurisdiction at law of all matters relating to property taxation.”).
Indeed, the 1972 amendments to article V provided that the
legislature could establish by law administrative bodies, such as
value adjustment boards, that would “be granted quasi-judicial
power in matters connected with the functions of their offices.” Art.
V, § 1, Fla. Const. (emphasis added). “With this change of
language, the constitution permitted the legislature, by duly
enacted legislation, to grant appropriate quasi-judicial power to
administrative officers or bodies so long as it pertained to matters
39
connected with the functions of their offices.” Fla. Exp. Tobacco
Co., Inc., 510 So. 2d at 948.
The question of whether an administrative body or agency,
such as a value adjustment board or the state comptroller, could
exercise concurrent jurisdiction with circuit courts as to the same
tax matters was answered in the affirmative in Florida Export
Tobacco, in which this Court stated:
We agree . . . that the 1972 amendments to the
constitution authorized the legislature to give
administrative officers and agencies quasi-judicial
jurisdiction in matters connected with the functions of
their offices, and that such jurisdiction could legally be
exercised concurrently with original, nonexclusive
jurisdiction given to circuit courts over the same matters.
. . . We likewise agree that such “quasi-judicial
jurisdiction” could, by general law expressly so providing,
embrace disputes over the legality of tax assessments.
510 So. 2d at 948–49 (emphasis added). The highlighted language
makes clear that the legislature can establish “quasi-judicial
jurisdiction” in administrative agencies that is concurrent with the
circuit courts. Indeed, this Court held that the legislature can
create administrative tribunals that adjudicate tax disputes,
stating that “[b]ased upon extensive additional research and
study, we find no legal impediment to the legislature’s enactment
of general legislation to permit [the Department] to
administratively adjudicate the legality of tax assessments, should
the taxpayer so elect.” Id. at 949. The legislature has done so by
establishing value adjustment boards.
In Florida Export Tobacco, this Court was unable to find any
legislative authority for the Department of Revenue or
Comptroller to exercise concurrent quasi-judicial jurisdiction with
the circuit courts over tax assessment matters; the result was that
agency tax rulings were not deemed quasi-judicial and not subject
to res judicata principles. In sharp contrast, the extensive
legislation establishing value adjustment boards as adjudicators of
property tax disputes (with appeals to, and direct actions
permitted in, the circuit courts) establishes beyond a doubt the
40
boards’ quasi-judicial jurisdiction over property tax matters and
that its jurisdiction is concurrent with the circuit court, meaning
that its rulings are entitled to finality and preclusive effect. If that
were not the case, and circuit courts continued post-1972 to be the
only constitutionally permissible fora to adjudicate property tax
disputes, the creation of an elaborately detailed statewide system
of value adjustment boards would be a nullity and board decisions
would be of no effect. That is because a “judicial or quasi-judicial
decision will not be given res judicata effect where rendered by a
tribunal lacking subject matter jurisdiction.” Id. at 943.
Moreover, the vesting of circuit courts with “exclusive original
jurisdiction” in the general jurisdiction statute, section
26.012(2)(e), Florida Statutes (circuit courts have “exclusive
original” jurisdiction in “all cases involving legality of any tax
assessment or toll or denial of refund, except as provided in s.
72.011”), as to certain tax matters, does not trump the specific
jurisdictional statute in the tax code with language to the contrary.
See § 194.171(1), Fla. Stat. (circuits courts “have original
jurisdiction at law of all matters relating to property taxation.”).
That’s because “a specific statute covering a particular subject
area always controls over a statute covering the same and other
subjects in more general terms.” McKendry v. State, 641 So. 2d 45,
46 (Fla. 1994); Stevens v. State, 127 So. 3d 668, 669 (Fla. 1st DCA
2013) (same). To read section 26.012(2)(e) and section 72.011 as
both providing “exclusive original jurisdiction” is mistaken; the
word “exclusive” is only in the general statute. A such, the
legislature is not precluded from creating quasi-judicial bodies
whose decisions are subject to judicial review, as Florida Export
Tobacco envisioned. Moreover, the terms “original” and “exclusive”
regulate jurisdiction of cases between courts established by the
state constitution; they do not preclude the grant of concurrent
quasi-judicial jurisdiction to administrative agencies over matters
related to property tax disputes. Art. V, § 1, Fla. Const.; Fla. Exp.
Tobacco, Co., Inc., 510 So. 2d at 948–49.
3.
Next, Crapo relies on the general tenet that each tax year’s
assessment “must stand or fall on its own validity” without
reference to prior years, a principle that exists primarily due to the
41
fluidity of rapidly changing circumstances that affect the factual
and legal bases for the value of property underlying an assessment.
Container Corp. of Am. v. Long, 274 So. 2d 571, 573 (Fla. 1st DCA
1973) (“Ad valorem taxes assessed against property in this state
for any given tax year must stand or fall on its own validity,
unconnected with the assessment made against that land during
any prior or subsequent year.”); see Page v. City of Fernandina
Beach, 714 So. 2d 1070, 1076 n.5 (Fla. 1st DCA 1998) (quoting
Container Corp., 274 So. 2d at 573). Changed circumstances
oftentimes favor property appraisers, who have much discretion in
their assessment authority to address current circumstances:
where new facts or changed laws arise, prior assessments are
subordinate to the determination of whether current
circumstances support a change in an assessment. This principle
applies to exemptions as well: if the factual or legal basis for a
previously granted exemption has changed, an assessor may
address the exemption’s application under the current
circumstances.
But nothing changed factually or legally as to the Academy’s
exemption, rendering this general tenet inapplicable. The doctrine
of res judicata is applied with caution, particularly in zoning and
permitting cases, because facts and circumstances are often not
stagnant and subject to change. Thomson, 511 So. 2d at 991. But
that caution does not apply in this case: Crapo admits that nothing
at all has changed. Expanding the already broad authority of
property appraisers to allow repetitive and vexatious
administrative challenges to previously granted tax exemptions
serves no cognizable purpose where the factual and legal
underpinnings of an exemption remain unchanged. Doing so
amounts to an impermissible second attempt to deny a previously
granted exemption. Holiday Inn, 678 So. 2d at 529-30.
Plus, it cannot be that every tax year stands or falls on its own
validity in all cases because, as Crapo concedes, res judicata
applies to all adverse circuit court rulings including those not
appealed. By his admission, if Crapo fails to appeal an adverse
circuit court ruling granting a tax exemption, he is precluded from
challenging the same exemption in future tax years absent
changed circumstances. By extension, because the general tenet
(i.e., “every tax year stands or falls on its own”) is inapplicable
42
where a circuit court has ruled on the matter and no appeal is
taken, it is likewise inapplicable where a value adjustment board
has ruled on the matter and no appeal is taken. B & B Hardware,
Inc., 135 S. Ct. at 1305. In short, the general tenet does not trump
core principles of finality and preclusion.
Likewise, the preclusive effect of an adverse ruling by a circuit
court does not depend on why a property appraiser chose to not
pursue an appeal. A property appraiser’s choice to not appeal an
adverse ruling may be due to litigation costs, budgeting issues,
economic conditions, policy choices, or other strategic reasons,
none of which affect the adverse ruling’s preclusive effect: the
unappealed circuit court ruling controls and principles of res
judicata apply. Again, by extension, the preclusive effect of an
adverse ruling by a value adjustment board does not depend on the
reasons a property appraiser may have harbored in choosing not
to appeal; the unappealed ruling controls and principles of res
judicate apply.
4.
Crapo also points to an agricultural exemption statute, which
addresses the unique problems associated with assessing
agricultural lands. He notes that subsection 3(e) of that statute
establishes a form of issue preclusion as to classification decisions
by value adjustment boards:
(e) Notwithstanding the provisions of paragraph (a)
[which requires an annual classification of
agricultural/non-agricultural lands], land that has
received an agricultural classification from the value
adjustment board or a court of competent jurisdiction
pursuant to this section is entitled to receive such
classification in any subsequent year until such
agricultural use of the land is abandoned or discontinued,
the land is diverted to a nonagricultural use, or the land
is reclassified as nonagricultural pursuant to subsection
(4).
§ 193.461(3)(e), Fla. Stat. (2019) (emphasis added). He argues that
if the Legislature wanted to grant preclusive effect to a value
43
adjustment board’s grant of an educational exemption, it could
have enacted a statute similar to subsection 3(e).
Overlooked is that nothing in subsection 3(e) suggests a
legislative intent to displace the well-established principle that res
judicata applies to quasi-judicial bodies. Astoria Fed. Sav. & Loan
Ass’n, 501 U.S. at 108 (common law principles of preclusion apply
absent legislative intent to the contrary). The default presumption,
that finality and preclusion apply to quasi-judicial judgments, can
be overcome only upon an express or implied legislative intent to
the contrary. Id. at 110 (concluding that intent of federal age
discrimination statute was to not give preclusive effect to judicially
unreviewed state administrative findings in federal courts).
Rather than displacing or undermining preclusion principles,
subsection 3(e) complements the common law preclusive effect of
quasi-judicial decisions by making it more difficult to overcome a
prior classification decision, requiring proof that an agricultural
use was abandoned, discontinued, diverted, or reclassified due to
changed circumstances. Subsection 3(e) does not jettison ordinary
preclusion principles, it strengthens them as to agricultural
exemptions, which are fraught with subjectivity. As explained in
Tilton v. Gardner, subsection 3(e) constrains a property appraiser
“to presume that land is still being used primarily for bona fide
agricultural purposes and must limit the inquiry to what may have
changed.” 52 So. 3d 771, 777-78 (Fla. 5th DCA 2010) (emphasis
added).
If nothing has materially changed, then the property
appraiser is powerless to deny an agricultural
classification despite a belief that the current agricultural
use is not bona fide. On the other hand, if the land use
has materially changed, then the property appraiser is
free to consider the “bona fide” factors of section
193.461(3)(b) as they may relate to the changed condition
in determining whether the agricultural use has been
abandoned or discontinued. Thus, the trial court correctly
asked: “Since Plaintiffs’ lands were classified agricultural
in 2005 what changed?”
44
Id. at 778 (emphasis added). By raising the evidentiary bar to
overcome the presumption of correctness of a prior agricultural
classification decision, subsection 3(e) supplements common law
preclusion principles as they apply to quasi-judicial decisions; the
legislature can supplement jurisdictional principles without
displacing all others. Stated differently, the legislative purpose of
giving heightened preclusive effect to prior agricultural
classification decisions cannot logically eliminate the finality and
preclusive effect of all other property tax decisions.
Moreover, Crapo ignores that subsection 3(e) includes within
its ambit both value adjustment boards and circuit court decisions,
i.e., “courts of competent jurisdiction.” Crapo claims that
subsection 3(e) is a limited legislative grant of preclusive effect for
rulings on agricultural exemptions by value adjustment boards,
whose other decisions lack precedential effect. By Crapo’s logic,
preclusive effect would be lacking as to judicial decisions of circuit
courts in property tax matters, not just quasi-judicial ones. Why
else would “courts of competent jurisdiction” be included? The
reason is that subsection 3(e) supplements existing principles of
res judicata by strengthening those applicable to agricultural
exemptions; its language and purpose reinforce, rather than
diminish, the Academy’s position.
5.
Finally, the policy argument is made that taxes are different
and that property appraisers must have plenary authority to
ensure collection of tax revenues and protect public coffers;
moreover, value adjustment boards are “unique” and subject to a
“unique body of law” that is said to strip them of their quasi-
judicial functions. This argument overlooks the overall balance the
property tax statutes achieve. The legislature has accorded broad
powers to property appraisers, but established an elaborate
statewide system of sixty-seven quasi-judicial bodies whose sole
purpose is to adjudicate property tax disputes in a fair, unbiased,
and uniform manner with virtually every attribute of due process
as well as the right to appeal adverse rulings. It is less than
reassuring, therefore, to accept the proposition that property
appraisers should have unchecked power to deny a previously
granted tax exemption each and every year even though nothing’s
45
changed that would alter a value adjustment board’s (or circuit
court’s) ruling. Crapo contends that he can annually deny an
exemption for no reason, merely hoping for a different outcome on
identical facts/law, which embodies the definition of arbitrary
action. Agrico Chem. Co. v. State Dep’t of Envtl. Regulation, 365
So. 2d 759, 763 (Fla. 1st DCA 1978) (“An arbitrary decision is one
not supported by facts or logic, or despotic.”). Not to mention the
expense of vexation litigation and the depletion of judicial (and
quasi-judicial) resources of such a deny-exemption-every-year-
though-nothing’s-changed-hoping-for-different-outcome policy.
Having failed to pursue available appellate relief in 2008, Crapo is
precluded from undertaking duplicative and vexatious actions
against the Academy absent changed circumstances, which he
admits don’t exist.
Conclusion
Just as “a losing litigant deserves no rematch after a defeat
fairly suffered” on an identical issue previously raised, a prevailing
litigant deserves finality after a victory fairly achieved where
nothing’s changed. Astoria Fed. Sav. & Loan Ass’n, 501 U.S. at
107. Res judicata principles require that the circuit court accord
the Alachua County Value Adjustment Board’s 2008 decision with
preclusive effect, entitling the Academy to the educational
exemption it has held for almost twenty-five years. Because the res
judicata issue decides only this specific case, it is unnecessary and
unwise to go further by overturning the education exemption,
which will surely cause confusion and distress among the
hundreds of educational institutions statewide who have
justifiably relied on it. Far better to point out the exemption’s
shortcomings, leave it at that, and allow for a legislative fix, if
deemed warranted.
***
Postscript
Judicial baby-splitting is a well-worn strategy for finding
common ground in a contentious appellate case. But keep in mind
that Solomon didn’t actually cut the baby in two; his threat to do
so exposed the true mother (i.e., the one who was willing to let the
46
child live though with the wrong mother). While Judge Osterhaus’s
attempt to split the baby is commendable, it exposes two truths.
First, his analysis necessarily recognizes that principles of
finality and preclusion apply to value adjustment boards. Deciding
that the “changed circumstances” exception to res judicata applies
in this case means that finality and preclusion principles apply to
value adjustment boards generally. To conclude otherwise would
be like saying no judicial taking occurred without acknowledging
a judicial takings theory. Stop the Beach Renourishment, Inc. v.
Florida Dept. of Envtl. Prot., 560 U.S. 702, 718 (2010) (“But
embracing a standard while being coy about the right is, well, odd;
and deciding this case while addressing neither the standard nor
the right is quite impossible.”).
Second, his analysis actually requires splitting the baby
because it raises and adjudicates in the first instance on appeal a
factually intense legal issue no party has raised during the entire
course of this litigation: whether the “changed circumstances”
exception applies. The reason it was never raised is that the
parties agreed that nothing relevant had changed between the
2008 ruling and the 2014 ruling. Crapo repeatedly admitted that
nothing factually or legally has changed: his counsel told the three-
judge panel and the en banc court that nothing factually or legally
had changed, 25 and that property appraisers can perpetually
challenge value adjustment board rulings even if the facts and law
are unchanged. 26 We heard this case en banc on the stipulated
premise of no changed circumstances.
25 Panel Oral Arg. at 2:55-3:00 (Feb. 12, 2018) (Crapo’s counsel
agreeing that “Factually nothing’s changed.”) & En Banc Oral Arg.
at 18:36-19:00 (Apr. 10, 2019) (same except that Crapo seeks
different legal interpretation).
26 Panel Oral Arg. at 5:06-5:15.
Judge: Just to make clear, your position is that the
property appraiser in whatever jurisdiction can come
back year after year after year and challenge [the
47
As such, raising and adjudicating a fact-intense issue sua
sponte on appeal that Crapo disavows, that was not addressed or
factually developed below, and that has not been brought to the
parties’ attention comes across as appellate prestidigitation.
Giving vitality to an unpreserved, undeveloped, and unbriefed
issue is particularly unwise because the Academy has had no
opportunity to address and rebut the issue; and, more importantly,
the trial court never developed the facts that it might deem
relevant for a “changed circumstances” exception (because Crapo
did not claim them). Affirming on an unraised, unbriefed,
unargued, factually undeveloped, and immaterial issue is not, in
truth, a fitting way to decide a case of exceptional importance.
APPENDIX
12D-9.001. Taxpayer Rights in Value Adjustment Board
Proceedings.
(1) Taxpayers are granted specific rights by Florida law concerning
value adjustment board procedures.
(2) These rights include:
(a) The right to be notified of the assessment of each taxable item
of property in accordance with the notice provisions set out in
Florida Statutes for notices of proposed property taxes;
(b) The right to request an informal conference with the property
appraiser regarding the correctness of the assessment or to
petition for administrative or judicial review of property
assessments. An informal conference with the property appraiser
is not a prerequisite to filing a petition for administrative review
or an action for judicial review;
(c) The right to file a petition on a form provided by the county that
is substantially the same as the form prescribed by the department
or to file a petition on the form provided by the department for this
purpose;
exemption] again and again and again even though
nothing’s changed.
Counsel: Hypothetically my answer to the question is yes.
I don’t know of any rule or law over the years that says
no.
48
(d) The right to state on the petition the approximate time
anticipated by the taxpayer to present and argue his or her petition
before the board;
(e) The right to authorize another person to file a board petition on
the taxpayer's property assessment;
(f) The right, regardless of whether the petitioner initiates the
evidence exchange, to receive from the property appraiser a copy
of the current property record card containing information
relevant to the computation of the current assessment, with
confidential information redacted. This includes the right to
receive such property record card when the property appraiser
receives the petition from the board clerk, at which time the
property appraiser will either send the property record card to the
petitioner or notify the petitioner how to obtain it online;
(g) The right to be sent prior notice of the date for the hearing of
the taxpayer's petition by the value adjustment board and the
right to the hearing within a reasonable time of the scheduled
hearing;
(h) The right to reschedule a hearing a single time for good cause,
as described in this chapter;
(i) The right to be notified of the date of certification of the county’s
tax rolls;
(j) The right to represent himself or herself or to be represented by
another person who is authorized by the taxpayer to represent the
taxpayer before the board;
(k) The right, in counties that use special magistrates, to a hearing
conducted by a qualified special magistrate appointed and
scheduled for hearings in a manner in which the board, board
attorney, and board clerk do not consider any assessment
reductions recommended by any special magistrate in the current
year or in any previous year;
(l) The right to have evidence presented and considered at a public
hearing or at a time when the petitioner has been given reasonable
notice;
(m) The right to have witnesses sworn and to cross-examine the
witnesses;
(n) The right to be issued a timely written decision within 20
calendar days of the last day the board is in session pursuant to
Section 194.034, F.S., by the value adjustment board containing
findings of fact and conclusions of law and reasons for upholding
49
or overturning the determination of the property appraiser or tax
collector;
(o) The right to advertised notice of all board actions, including
appropriate narrative and column descriptions, in brief and
nontechnical language;
(p) The right to bring an action in circuit court to appeal a value
adjustment board valuation decision or decision to disapprove a
classification, exemption, portability assessment difference
transfer, or to deny a tax deferral or to impose a tax penalty;
(q) The right to have federal tax information, ad valorem tax
returns, social security numbers, all financial records produced by
the taxpayer and other confidential taxpayer information, kept
confidential; and,
(r) The right to limiting the property appraiser’s access to a
taxpayer's records to only those instances in which it is determined
that such records are necessary to determine either the
classification or the value of taxable non-homestead property.
_____________________________
John C. Dent, Jr., and Jennifer A. McClain of Dent & McClain,
Chartered, Sarasota, for Appellant/Cross-Appellee.
Paul A. Donnelly and Jung Yoon of Donnelly + Gross, Gainesville,
for Appellee/Cross-Appellant.
Matthew H. Mears, General Counsel, and James L. Richmond,
Assistant General Counsel, Tallahassee, for Amicus Curiae The
Department of Education, Commission for Independent
Education.
Ashley Moody, Attorney General, and Timothy E. Dennis, Chief
Assistant Attorney General, Tallahassee, for Amicus Curiae State
of Florida, Department of Revenue.
Benjamin K. Phipps of Phipps & Howell, Tallahassee; Michael D.
Minton of Dean Mead Minton & Zwemer, Fort Pierce; Gerald J.
Donnini of Moffa, Sutton & Donnini, P.A., Fort Lauderdale; and
Mitchell I. Horowitz of Buchanan Ingersoll & Rooney PC, Tampa,
for Amicus Curiae The Tax Section of the Florida Bar.
50
Loren E. Levy and Stuart W. Smith of The Levy Law Firm,
Tallahassee, for Amicus Curiae The Property Appraisers’
Association of Florida, Inc.
51