CITY OF PEMBROKE PINES v. CORRECTIONS CORPORATION OF AMERICA, INC.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

CITY OF PEMBROKE PINES,

Appellant,

v.

CORRECTIONS CORPORATION OF AMERICA, INC.,

n/k/a CoreCivic, Inc.,

Appellee.

No. 4D18-3168

[May 29, 2019]

Appeal of nonfinal order from the Circuit Court for the Seventeenth

Judicial Circuit, Broward County; Carol-Lisa Phillips, Judge; L.T. Case No.

12-007337 (25).

E. Bruce Johnson and Hudson C. Gill of Johnson, Anselmo, Murdoch,

Burke, Piper & Hochman, P.A., Fort Lauderdale, for appellant.

Leonard K. Samuels, Paul S. Figg and Ashley Dillman Bruce of Berger

Singerman, LLP, Fort Lauderdale, for appellee.

GERBER, C.J.

The City of Pembroke Pines appeals from the circuit court’s order

denying its motion to dismiss, on sovereign immunity grounds,

Corrections Corporation of America’s counterclaim seeking non-

contractual economic damages alleged in counts for declaratory judgment,

promissory estoppel, tortious interference with contract, and tortious

interference with an advantageous business relationship. The City argues

that the sovereign immunity waiver codified in section 768.28, Florida

Statutes (2012), does not apply to these four counts.

We agree with the City. We reverse and remand for entry of a final order

dismissing these four counts on sovereign immunity grounds.

We present this opinion in three parts:

1. Factual background;

2. Procedural history; and

3. This appeal.

1. Factual Background

The factual background underlying these claims was set forth in

Corrections Corporation of America, Inc. v. City of Pembroke Pines, 230 So.

3d 477 (Fla. 4th DCA 2017) (“Pembroke Pines I”):

CCA sought sewer and water services from Pembroke Pines

for its property located in the Town of Southwest Ranches but

adjacent to Pembroke Pines (“the CCA site”). Pembroke Pines

operates potable water and sewer systems that service

properties within its boundaries, as well as some properties

outside of those boundaries. Those services provided outside

of the boundaries extend to a limited number of residential

and commercial properties. Southwest Ranches does not

have potable water or sewer systems to service its residents,

and Pembroke Pines is the only provider in the area. The CCA

site is surrounded by four other properties, all of which are,

or were at one time, serviced by Pembroke Pines’ water or

sewer systems (or both). Only one of these properties is

actually located within the boundaries of Pembroke Pines. At

all times relevant to this dispute, Pembroke Pines admitted

that it had the capacity and infrastructure in place to provide

water and sewer services to the CCA site through its systems

that abut the site.

In 2005, CCA and Southwest Ranches entered into an

agreement concerning the development of a correctional

facility on the CCA site. The agreement provided that “all

required water, sewer and other utility services are available”

at the CCA site. CCA was advised that while a water and

sewer agreement with Pembroke Pines would be required, it

was unclear whether the Pembroke Pines City Commission

would grant those services. However, later in 2005,

Southwest Ranches entered into an interlocal agreement with

Pembroke Pines regarding local roadways and other matters

(“Roadways ILA”), in which Pembroke Pines agreed not to

interfere with the development or operation of CCA’s jail

facility:

Jail Facility. [Pembroke Pines] shall not interfere

with [CCA’s], or its successors or assigns, development

and/or operation of the jail facility, or with [Southwest

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Ranches]’s Agreement with [CCA] concerning

development of same.

In 2011, Immigration and Customs Enforcement (“ICE”)

tentatively selected the CCA site to build a new detention

facility. A few days later, Pembroke Pines and Southwest

Ranches entered into another interlocal agreement

concerning emergency medical and fire services (the “EMS

ILA”) that provided in pertinent part:

Jail Facility: [Pembroke Pines] acknowledges that it

has sufficient capacity to deliver emergency medical

protection and fire prevention services to [Southwest

Ranches]’s future 2,500 bed detention/corrections

facility, located on property currently owned by [CCA].

[Pembroke Pines] agrees to timely provide Broward

County, upon request, any documentation that

Broward County may require to acknowledge that

Pembroke Pines has the capacity, ability, and the

willingness to service this facility under the terms and

conditions contained herein . . . Further, [Pembroke

Pines] agrees that it has sufficient capacity to provide

water and sewer service to [Southwest Ranches]’s future

2,500 bed detention/corrections facility (approximately

500,000 gross square feet of floor area), and that it will

expeditiously approve a water/waste water utility

agreement to provide such service, at [Pembroke Pines]’s

then prevailing rate, in accordance with state

law ([Pembroke Pines]’s rate + surcharge).

(Emphasis added). In a special meeting on June 27, 2011, the

Pembroke Pines City Commission voted on and approved the

EMS ILA in Resolution No. 3312.

Some five months later, in December 2011, the City

Commission passed yet another affirmative motion, that one

being “to approve direction that, should CCA come forward

with a request for Pembroke Pines to provide them water and

sewer service, that the water and sewer agreement stipulate

that it would be for not more than 1,500 beds based on the

Engineer’s report” (the “December 2011 Motion”). CCA then

submitted to Pembroke Pines a proposed Water and Sewer

Installation and Service Agreement (the “W & S Agreement”)

for a 1,500–bed facility, and requested that the matter be

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finalized at the first available City Commission meeting.

Pursuant to the EMS ILA, the Pembroke Pines city attorney

and the Pembroke Pines city manager agreed on the

contractual terms with CCA and the W & S Agreement was

then submitted to the City Commission. In an abrupt

departure from the numerous manifestations of intent

expressed by the Pembroke Pines City Commission over the

previous six years, the City Commission did not vote on the W

& S Agreement and quite to the contrary, formally adopted a

resolution expressing its opposition to erecting the ICE

detention center on the CCA site. In a later meeting, the City

Commission voted to . . . terminate the EMS ILA . . . .

Id. at 478-79 (internal footnote omitted).

2. Procedural History

a. Pembroke Pines I

The City filed an action for declaratory judgment, seeking a ruling that

it was not required to provide CCA with water and sewer services or, if it

was required to provide utility services, a determination of “whether there

[were] any limitations on the obligation to provide service.” Id. at 479.

Following a trial, the circuit court entered an order determining that the

City did not have a duty to provide water and sewer services to CCA. Id.

at 479-80.

CCA appealed, arguing that the City assumed a legally enforceable duty

to provide the CCA site with those services by expressly manifesting a

desire or intent to provide the services. Id. at 480. CCA maintained the

evidence at trial established that the City’s conduct created a duty to

provide utilities.

We agreed with CCA in Pembroke Pines I, reasoning in pertinent part:

As a general rule, “a municipality has no duty to supply

services to areas outside its boundaries.” Allen’s Creek Props.,

Inc. v. City of Clearwater, 679 So. 2d 1172, 1174 (Fla. 1996).

In Allen’s Creek, the Florida Supreme Court recognized

exceptions to this general rule where (1) a municipality has

agreed to extend its services by contract, and (2) where a

municipality has assumed a duty to provide such services

through its conduct. Id. at 1175–76.

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....

Applying Allen’s Creek to the agreements at hand, we find

direct expressions of intent to provide services to the area at

issue in the EMS ILA:

Jail Facility: . . . [Pembroke Pines] agrees to timely

provide Broward County, upon request, any

documentation that Broward County may require to

acknowledge that Pembroke Pines has the capacity,

ability, and the willingness to service this facility . . . .

Further, [Pembroke Pines] agrees that it has sufficient

capacity to provide water and sewer service to

[Southwest Ranches]’s future 2,500 bed

detention/corrections facility (approximately 500,000

gross square feet of floor area), and that it will

expeditiously approve a water/waste water utility

agreement to provide such service, at [Pembroke Pines]’s

then prevailing rate, in accordance with state

law ([Pembroke Pines]’s rate + surcharge).

(Emphasis added). By including a statement that it would

“approve a water/waste water agreement to provide such

service,” Pembroke Pines affirmatively and expressly

manifested its desire and intent to assume that duty.

Further, although they may not constitute affirmative

expressions of intent to provide water and sewer service, other

actions of the City of Pembroke Pines indicated its willingness

to provide services to the CCA site. Pembroke Pines provided

these services to all surrounding sites. Also, knowing that it

was the only water and sewer service provider in the area,

Pembroke Pines agreed in the Roadways ILA that it “shall not

interfere with [CCA’s] . . . development and/or operation of the

jail facility.” Finally, Pembroke Pines indicated its willingness

to provide these services by the City Commission’s passage of

the December 2011 motion to direct CCA to limit its request

for water and sewer services to a 1,500-bed facility.

. . . While the Commission did not vote on CCA’s proposed

W & S Agreement, which provided the negotiated terms and

conditions of utility services, it did vote on and approve the

EMS ILA in Resolution No. 3312, in which the City agreed that

it would approve a water/wastewater utility agreement. As a

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consequence of the City Commission’s approval of the EMS

ILA, CCA may have reasonably expected that Pembroke

Pines’s agreement to provide utility services was valid and

binding.

....

Consequently, we find that the conduct exception to the

general rule that a municipality has no duty to supply services

to areas outside its boundaries applies in the instant case. We

reverse the trial court’s determination to the contrary.

Id. at 480-82.

b. The Instant Case

While the appeal in Pembroke Pines I was occurring, ICE notified

Southwest Ranches that ICE would not build a detention center on the

CCA site. With no detention center to build, CCA sold the CCA site to

Southwest Ranches.

CCA then filed its second amended counterclaim against the City. CCA

generally alleged that in reliance on the City’s representations that the City

would provide water and sewer service to the CCA site, CCA incurred

substantial costs, including the purchase price and carrying costs of the

CCA site, payments to Southwest Ranches under the CCA–Southwest

Ranches agreement, and payments of professional fees for development

work. CCA further alleged that the City’s ultimate refusal to provide water

and sewer service to the CCA site thwarted the development of the ICE

facility and deprived CCA of the economic viability of the CCA site.

Based on those and other general allegations, CCA’s second amended

counterclaim specifically alleged six counts against the City, four of which

are relevant here: Count I for declaratory judgment; Count II for

promissory estoppel; Count V for tortious interference with contract; and

Count VI tortious interference with advantageous business relationship.

In Count I, CCA alleged that because of the City’s refusal to provide

water and sewer service to the CCA site, CCA was entitled to supplemental

relief in the form of damages and costs.

In Count II, CCA alleged that its reliance on the City’s representations

was reasonable, for which it sought damages and costs, including

damages for the purchase price and carrying costs of the CCA site,

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payments to Southwest Ranches under the CCA–Southwest Ranches

agreement, and payments of professional fees for development work.

In Count V, CCA alleged that the City’s refusal to provide water and

sewer service to the CCA site interfered with the CCA–Southwest Ranches

Agreement to develop a correctional facility on the CCA site, for which CCA

had suffered damages, including lost profits and costs.

In Count VI, CCA alleged that the City’s refusal to provide water and

sewer service to the CCA site interfered with CCA’s advantageous business

relationship with ICE to develop a correctional facility on the CCA site, for

which CCA had suffered damages, including lost profits and costs.

The City moved to dismiss CCA’s second amended counterclaim. The

City argued, among other grounds, that sovereign immunity barred CCA’s

state law claims for declaratory relief, promissory estoppel, tortious

interference with contract, and tortious interference with advantageous

business relationship, because those claims sought only economic

damages not based on express contracts between the City and CCA, and

were not based on personal injury, wrongful death, or physical property

damages. According to the City, the dismissal of those four claims would

be in line with Florida cases finding that, based on sovereign immunity,

(1) property owners cannot recover for the harm caused by the decision-

making process, and (2) no state tort liability exists for allegedly wrongful

denials of development-related applications.

The circuit court ultimately entered an order denying the City’s motion

to dismiss, expressly finding that the City “is not entitled to its defense

and assertion of sovereign immunity for the state law claims that have

been set forth in Counts I, II, [V] and VI of the Second Amended Counter-

claim (Declaratory Judgment, Promissory Estoppel, Tortuous [sic]

Interference with Contract, and Tortuous [sic] Interference with an

Advantageous Business Relationship), which requests economic

damages.”

3. This Appeal

This appeal followed. The City argues that the circuit court erred in

finding, as a matter of law, that the City was not entitled to sovereign

immunity for: (1) CCA’s state law tort claims which do not seek damages

for injury or loss of property, personal injury, or death, but instead seek

damages for economic losses in the form of lost profits; and (2) CCA’s state

law declaratory judgment claim seeking supplemental relief in the form of

economic damages.

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CCA’s answer brief raises three arguments, including sub-arguments

as specified:

(1) the order is not reviewable under Florida Rule of Appellate Procedure

9.130(a)(3)(C)(xi) (providing jurisdiction over nonfinal orders which

determine that, “as a matter of law, a party is not entitled to

sovereign immunity”), because

(a) the City’s underlying conduct was not a discretionary function,

which is fundamental to sovereign immunity, and

(b) this court already concluded in Pembroke Pines I that CCA’s

claims are based on the City’s operational decision not to perform

its obligation to provide water and sewer service to the CCA site;

(2) if CCA’s claims do not fall within section 768.28’s statutory waiver

of sovereign immunity because the claims seek economic damages,

then the City still is liable at common law for actions in its propriety

capacity as a municipal corporation; and

(3) section 768.28 does not distinguish between torts on the basis of

the type of damages sought or the specific causes of action.

The parties agree that our review is de novo. See Town of Gulf Stream

v. Palm Beach Cty., 206 So. 3d 721, 725 (Fla. 4th DCA 2016) (“The issue

of sovereign immunity is a legal issue subject to the de novo standard of

review.”).

We conclude that the City is entitled to sovereign immunity on CCA’s

state law tort claims and state law declaratory judgment claim. We base

our conclusion on five grounds.

First, we conclude the order is reviewable under Florida Rule of

Appellate Procedure 9.130(a)(3)(C)(xi). The rule’s plain language provides

appellate jurisdiction over nonfinal orders which determine that, “as a

matter of law, a party is not entitled to sovereign immunity,” which is

exactly the type of nonfinal order on review in this appeal.

Second, contrary to CCA’s answer brief, the City’s underlying conduct

was discretionary in nature. Discretionary or planning level functions “are

generally interpreted to be those requiring basic policy decisions, while

operational level functions are those that implement policy.” Com. Carrier

Corp. v. Indian River Cty., 371 So. 2d 1010, 1021 (Fla. 1979). Here, the

City Commission’s ultimate adoption of a resolution opposing the

construction of an ICE detention center on the CCA site, followed by a vote

to terminate the EMS ILA, were clearly basic policy decisions made at the

City’s highest level.

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Third, contrary to CCA’s answer brief, we did not conclude in Pembroke

Pines I that CCA’s claims are based on the City’s operational decision not

to perform on its obligation to provide water and sewer service to the CCA

site. Pembroke Pines I did not involve any determination of sovereign

immunity or, more specifically, whether the City’s ultimate decision not to

provide water and sewer service to the CCA site was discretionary or

operational in nature. Pembroke Pines I merely decided whether the

conduct exception to the general rule that a municipality has no duty to

supply services to areas outside its boundaries applied in the underlying

case. 230 So. 3d at 482. Now presented in this appeal is the question of

whether the City’s ultimate decision not to provide water and sewer service

to the CCA site was discretionary or operational in nature. As stated

above, we conclude that the decision was clearly discretionary in nature.

Fourth, contrary to CCA’s answer brief, the City, as a municipal

corporation, is equally situated with all other constitutionally authorized

governmental entities as to when sovereign immunity applies. See Com.

Carrier, 371 So. 2d at 1016 (municipalities are “unequivocally included

within the definition of ‘state agencies or subdivisions’” as used in section

768.28); Cauley v. City of Jacksonville, 403 So. 2d 379, 385-86 (Fla. 1981)

(“We note that section 768.28 also furthers the philosophy of Florida’s

present constitution that all local governmental entities be treated equally.

. . . Municipalities can no longer be identified as partial outcasts as

opposed to other constitutionally authorized local governmental entities.”).

Fifth, the plain language of section 768.28’s limited waiver of sovereign

immunity does not apply to CCA’s state law tort claims which are not

based on “injury or loss of property, personal injury, or death caused by

the negligent or wrongful act or omission of any employee of the agency or

subdivision while acting within the scope of the employee’s office or

employment . . . .” Section 768.28(1) states, in pertinent part:

[T]he state, for itself and for its agencies or subdivisions,

hereby waives sovereign immunity for liability for torts, but

only to the extent specified in this act. Actions at law against

the state or any of its agencies or subdivisions to recover

damages in tort for money damages against the state or its

agencies or subdivisions for injury or loss of property, personal

injury, or death caused by the negligent or wrongful act or

omission of any employee of the agency or subdivision while

acting within the scope of the employee's office or employment

under circumstances in which the state or such agency or

subdivision, if a private person, would be liable to the

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claimant, in accordance with the general laws of this state,

may be prosecuted subject to the limitations specified in this

act.

(emphasis added).

Persuasive authority for our conclusion is derived from the Fifth

District’s decision in County of Brevard v. Miorelli Engineering, Inc., 677 So.

2d 32 (Fla. 5th DCA 1996), quashed on other grounds, 703 So. 2d 1049

(Fla. 1997). In Miorelli, an engineering firm contracted with Brevard

County to construct a spring training facility. Id. at 33. The firm began

developing the facility. Id. However, a dispute arose between the county

and the firm. Id. The county ultimately terminated the firm and withheld

the remaining amounts due under the contract. Id. The firm filed suit

against the county seeking to recover those withheld amounts, as well as

payment for extra work, under claims for breach of contract, quantum

meruit, fraudulent inducement, and common law fraud. Id.

The county filed a motion for summary judgment, asserting sovereign

immunity. Id. The circuit court granted the county’s motion as to the

quantum meruit and common law fraud claims, but concluded that

sovereign immunity did not bar either the breach of contract or fraudulent

inducement claims. Id.

On appeal, the Fifth District affirmed that portion of the circuit court’s

order denying summary judgment on the breach of contract claim, but

reversed that portion of the order denying summary judgment on the

fraudulent inducement claim. Id. at 34-35.

On the breach of contract claim, the Fifth District found that although

no explicit legislative waiver of sovereign immunity exists for breach of

contract, our supreme court has recognized an implied waiver of sovereign

immunity exists for breach of contract. Id. at 33 (citing Pan–Am Tobacco

Corp. v. Dep’t of Corrs., 471 So. 2d 4 (Fla. 1984), for the proposition that

because the Legislature authorizes state entities to enter into contracts,

the Legislature clearly intended that such contracts be valid and binding

on both parties).

However, on the fraudulent inducement claim, the Fifth District found

no implied waiver of sovereign immunity, reasoning, in pertinent part:

The legislature has waived sovereign immunity in tort for

personal injury, wrongful death, and injury or loss of property.

See § 768.28, Fla. Stat. (1995). Fraud in the inducement

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causing only economic loss does not fit within any of those

categories of injury or loss enumerated in the statute. Section

768.28 states that sovereign immunity for liability in tort is

waived, but only to the extent specified in the statute.

Moreover, fraud in the inducement is a tort independent of

breach of contract. Pan–Am recognized the waiver of sovereign

immunity to breach of contract actions, and its holding has

not been extended to include the tort of fraudulent

inducement causing only economic loss. Sovereign immunity

has not been waived as to this type of tort, so the trial court

erred in not granting the county’s motion for summary

judgment as to that count.

Id. at 34.

Miorelli’s reasoning applies equally here. CCA lacks an express contract

with the City, and lacks a claim for personal injury, wrongful death, or

injury or loss of property against the City. The waiver of sovereign

immunity has not been extended to include the claim upon which CCA

relies here – economic damages framed in counts for declaratory relief,

promissory estoppel, tortious interference with contract, and tortious

interference with advantageous business relationship. Thus, the circuit

court erred in denying the City’s motion to dismiss those counts on

sovereign immunity grounds.

This conclusion is not only consistent with Miorelli, but with other cases

applying sovereign immunity to bar recovery of economic damages against

a municipality for the denial of a development application. See Akin v. City

of Miami, 65 So. 2d 54, 55-56 (Fla. 1953) (the granting or withholding of a

building permit by a municipality exercises a purely governmental

function, and thus the municipality could not be held liable in a tort action

for damages for the wrongful refusal to issue such a permit); Paedae v.

Escambia Cty., 709 So. 2d 575, 578 (Fla. 1st DCA 1998) (county’s

interpretation of its comprehensive plan and refusal to issue a permit

based on that interpretation is a governmental function which is protected

by sovereign immunity); City of Cape Coral v. Landahl, Brown & Weed

Assocs., Inc., 470 So. 2d 25, 27 (Fla. 2d DCA 1985) (no cause of action

exists for the manner in which a municipality exercises its governmental

function of issuing or refusing to issue permits, thus those actions are

immune from an action for damages); City of Live Oak v. Arnold, 468 So.

2d 410, 412 (Fla. 1st DCA 1985) (“[I]nsofar as the city’s defense of

sovereign immunity is focused on its actions in denying issuance of the

permit based upon its reading of its own code of ordinances, the defense

is viable.”).

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Conclusion

Based on the foregoing, we reverse and remand for entry of a final order

dismissing, on sovereign immunity grounds, Count I for declaratory

judgment, Count II for promissory estoppel, Count V for tortious

interference with contract, and Count VI tortious interference with

advantageous business relationship.

Reversed and remanded.

CONNER, J., and METZGER, ELIZABETH, Associate Judge, concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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