A short one (per curiam is one two-sentence paragraph), with an interesting concurring opinions from the Florida District Court of Appeals (4th District).
In Vazquez v. City of Hallandale Beach, No. 4D2023-0833 (June 12, 2024), the court held that a restrictive covenant that ran with Vazquez' land (and others in his subdivision, including the city, which had agreed to be bound by the covenant in the settlement of a 1969 lawsuit) is not a compensable real property interest that must be compensated when wiped out by what otherwise would be a regulatory taking.
Vazquez sued the city, asserting that its marina and parking lot violated a buffer zone which had been created by the 1969 settlement. The city was a party to that lawsuit and settlement agreement. The city agreed that yes, the buffer zone indeed had that effect. But we're the government and even though we agreed to be bound by the restrictive covenant in that settlement agreement back in the day, we're not bound by it now. These are contract rights not property rights, and thus unenforceable against the government.
Chief Judge Klingensmith "reluctantly" concurred, noting that the precedents support the court's conclusion when the government has not bound itself via agreement to the covenant. However, he found it important that the city was a party to the settlement and had agreed to be bound:
Phrased differently—in contrast to Bay Harbor and Ryan—the City did not simply acquire land with an existing restrictive covenant attached to the land. Rather, the City created the same restrictive covenant that it now seeks to destroy. Thus, the fact that the City did not own the property in question at the time of the 1969 settlement is irrelevant.
The City also argues that even though it was a party to the 1969 agreement which created the restrictive covenant, and despite the City being involved in a 2012 declaratory judgment action to enforce the restrictive covenant, the City itself was not—nor was it ever—bound by that restrictive covenant. Indeed, the City claims it was free to violate the restrictive covenant at will and has no obligation whatsoever pursuant to Bay Harbor and Ryan to use the power of eminent domain to extinguish the restrictive covenant. In my opinion, this is the very definition of an illusory contract. Despite the City’s assertions that the contract is not illusory, the City has wholly failed to explain under these circumstances why it is not. Pan-Am Tobacco Corp. v. Dep’t of Corr., 471 So. 2d 4, 5 (Fla. 1984) (a contract is illusory if it is not mutually enforceable).
Slip op. at 3 (Klingensmith, C.J., specially concurring).
Judge K didn't like this, but felt "constrained" by the Florida Supreme Court's decisions in the Bay Harbor and Ryan cases that restrictive covenants are categorically contract rights not enforceable against the government, and not property rights. In his view, "both private and public parties should be held to the agreements which they freely enter." Slip op. at 3-4 (Klingensmith, C.J., specially concurring).
One other judge also specially concurred, noting that the 1969 settlement agreement did not contain a clear and express waiver of the city's sovereign immunity.
With two judges offering their input, might this not be the end of this one? Stay tuned.
Vazquez v. City of Hallandale Beach, No. 4D2023-0833 (Fla. Dist. Ct. App. June 12, 2024) (per curiam)