          Supreme Court of Florida
                                  ____________

                                 No. SC14-1282
                                 ____________

                            VICKI THOMAS, et al.,
                                 Appellants,

                                        vs.

            CLEAN ENERGY COASTAL CORRIDOR, etc., et al.,
                           Appellees.

                                [October 1, 2015]

POLSTON, J.

      This case is before the Court on appeal from a circuit court judgment

validating a proposed bond issue by Clean Energy Coastal Corridor (Clean

Energy).1 We affirm the circuit court’s decision to validate the bonds, but remand

for the circuit court to require Clean Energy to amend the financing agreement as

described herein.




      1. We have jurisdiction. See art. V, § 3(b)(2), Fla. Const.
                                 BACKGROUND

       Clean Energy was created pursuant to section 163.01(7), Florida Statutes, by

interlocal agreement between three municipalities located in Miami-Dade County,

Florida.2 Clean Energy is a separate legal entity from the municipalities that

created it, and its purpose is to finance through the issuance of bonds certain

qualifying improvements to real property authorized by section 163.08, Florida

Statutes, commonly referred to as the Property Assessed Clean Energy (PACE)

Act.

       Participation in Clean Energy’s PACE Program by property owners within

the area covered by the interlocal agreement is voluntary, and in exchange for

receiving financing for qualifying improvements, including those related to

renewable energy, energy efficiency and conservation, and wind resistance,

property owners agree to the imposition of non-ad valorem assessments on the

benefitted property. The PACE Act requires these non-ad valorem assessments to

be collected on the tax bill pursuant to the uniform method of collection authorized

by section 197.3632, Florida Statutes. See § 163.08(4), Fla. Stat.

       After Clean Energy’s creation, its governing board adopted a bond

resolution authorizing the issuance of revenue bonds in an amount not to exceed



      2. The three municipalities are the Town of Bay Harbor Islands, the Village
of Biscayne Park, and the Town of Surfside.


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$500,000,000 for the purpose of financing qualifying improvements. Clean

Energy then filed a complaint to validate those bonds and the non-ad valorem

assessments securing them in the Circuit Court for Leon County, Florida, as

specified in section 163.01(7)(d), Florida Statutes. The circuit court issued an

order to show cause why the bonds should not be validated, and Clean Energy

published the order as required by law. See § 75.06, Fla. Stat.

      When it filed its complaint, Clean Energy contemplated that local

governments in both Miami-Dade and Broward Counties would join in the

interlocal agreement and participate in Clean Energy’s PACE Program.

Accordingly, Clean Energy named the property owners, taxpayers, and citizens of

both Miami-Dade and Broward Counties among the defendants. However, when

Broward County did not adopt a resolution joining in the interlocal agreement,

Clean Energy filed a notice of voluntary dismissal dropping the property owners,

taxpayers, and citizens of Broward County from the case. In light of the voluntary

dismissal, Clean Energy argued that two residents of Broward County (Sidney

Karabel and Christopher Trapani) who had appeared in the case and responded to

the order to show cause, lacked standing and moved to strike their response.

      At both the initial and continued show-cause hearing, counsel for the

Broward County residents, who also represents the only other property owner who

appeared in the proceeding (Miami-Dade County resident Vicki Thomas), was


                                        -3-
given the opportunity to present his clients’ arguments as to why the bonds should

not be validated. Counsel acknowledged that Clean Energy would eventually be

able to validate its bonds, but raised several arguments regarding alleged errors that

Clean Energy had made in developing its bond documents and argued those errors

prevented the court from ruling that Clean Energy had the present authority to

issue the bonds.

      The only argument regarding Clean Energy’s authority to issue the bonds

raised below that is repeated in this appeal is that the bonds cannot be validated

because the financing agreement to be signed by Clean Energy and property

owners participating in the PACE Program purports to authorize a remedy for the

collection of unpaid assessments that is not authorized by Florida law, namely

judicial foreclosure. Section 4 of the financing agreement provides:

      Section 4. Collection of Assessment; Lien

      The Assessment, and the interest and charges thereon resulting from a
      delinquency in the payment of any installment of the Assessment,
      shall constitute a lien against the Property equal in dignity with county
      taxes and assessments, and when due shall be superior to all other
      liens, title and claims, including any mortgage, until paid. The
      Assessment shall be paid and collected on the same bill as real
      property taxes using the uniform method of collection authorized by
      Chapter 197, Florida Statutes. The Property Owner agrees and
      acknowledges that if any Assessment installment is not paid when
      due, the Authority [(Clean Energy)] shall have the right to seek all
      appropriate legal remedies to enforce payment and collect the
      Assessment or amounts due hereunder, including but not limited to
      foreclosure, and seek recovery of all costs, fees and expenses
      (including reasonable attorneys’ fees and costs and title search


                                        -4-
      expenses) in connection with the enforcement and foreclosure actions.
      The Property Owner acknowledges that, if bonds are sold or if the
      Authority enters into another financing relationship to finance the
      Final Improvements or an Abandonment Payment, the Authority may
      obligate itself, through a covenant with the owners of the bonds or the
      lender under such other financing relationship, to exercise its
      foreclosure rights with respect to delinquent Assessment installments
      under specified circumstances.[3]

      In addressing this argument, the circuit court stated that it read section 4 of

the financing agreement to mean that “the collection [of assessments] has to be in

accordance with Chapter 197, and that foreclosure can only be sought if it’s an

appropriate legal remedy.” Clean Energy conceded that judicial foreclosure is not

currently an appropriate legal remedy and that it is limited to collecting

assessments in accordance with chapter 197’s uniform method. Accordingly, the

circuit court ruled that it would include a statement in the final judgment that “the

collection of the assessment, [a]s indicated in Section 4 of [the financing

agreement], has to be using . . . only a method of collection authorized by Chapter

197 of the Florida [S]tatutes, or otherwise authorized by Florida law.” The final

judgment includes this limitation and further provides that “[a]ny non-ad valorem

assessments levied and imposed against affected real property must be collected




      3. Section 17 of the financing agreement, which governs assignment of the
agreement, also references Clean Energy’s “right to pursue judicial foreclosure of
the Assessment lien.”

                                         -5-
pursuant to the uniform collection method set forth in Section 197.3632, Florida

Statutes.”

      The circuit court then ruled that the Broward County residents lacked

standing because they had been voluntarily dismissed from the case. Accordingly,

the circuit court granted Clean Energy’s motion to strike their response to the order

to show cause, and noted in the final judgment that the property owners, taxpayers,

and citizens of Broward County had been removed from the case by a voluntary

dismissal.

                                    ANALYSIS

      This Court has explained the standard of review for bond validation cases

where the bond issuance is funded by special assessments:

             This Court performs expedited review in bond validation cases
      to “facilitate[ ] an adjudication as to the validity of bonds so as to
      provide assurance of the marketability of the bonds.” City of Oldsmar
      v. State, 790 So. 2d 1042, 1050 (Fla. 2001). Our review authority in
      these cases is “circumscribed in scope and purpose,” id. at 1049, and
      is generally limited to three issues: (1) whether the public body has
      the authority to issue bonds; (2) whether the purpose of the obligation
      is legal; and (3) whether the bond issuance complies with the
      requirements of law. See Keys Citizens for Responsible Gov’t, Inc. v.
      Fla. Keys Aqueduct Auth., 795 So. 2d 940, 944 (Fla. 2001); State v.
      Osceola County, 752 So. 2d 530, 533 (Fla. 1999). However, where,
      as here, a bond issuance is funded by special assessments, we will
      apply an additional two-pronged test to evaluate whether those special
      assessments meet the requirements of the law. The Court in City of
      Winter Springs v. State, 776 So. 2d 255[, 257] (Fla. 2001), explained:
             To comply with the requirements of the law, a special
             assessment funding a bond issuance must satisfy the


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             following two-prong test: (1) the property burdened by
             the assessment must derive a special benefit from the
             service provided by the assessment; and (2) the
             assessment for the services must be properly apportioned
             among the properties receiving the benefit. See Lake
             County v. Water Oak Management Corp., 695 So. 2d
             667, 668 (Fla. 1997) (citing City of Boca Raton v. State,
             595 So. 2d 25, 30 (Fla. 1992)).

Citizens Advocating Responsible Envtl. Solutions, Inc. v. City of Marco Island,

959 So. 2d 203, 206 (Fla. 2007).

      We have further explained that “[s]ubsumed within the inquiry as to whether

the public body has the authority to issue the subject bond is the legality of the

financing agreement upon which the bond is secured.” State v. City of Port

Orange, 650 So. 2d 1, 3 (Fla. 1994).

      In this case, the financing agreement’s references to judicial foreclosure are

inconsistent with its requirement—and Florida law—that collection of non-ad

valorem assessments must be accomplished pursuant to chapter 197’s uniform

method. See generally § 197.3632, Fla. Stat. (providing for the collection of

assessments on the same bill as property taxes and for the issuance and sale of tax

certificates and, ultimately, tax deeds if assessments are not paid); see also §

163.08(4), Fla. Stat. (providing that financing costs for qualifying PACE program

improvements “may be collected as a non-ad valorem assessment[, which] shall be

collected pursuant to s. 197.3632”). However, as the circuit court noted, the

financing agreement limits Clean Energy to “appropriate legal remedies” for


                                         -7-
collecting unpaid assessments, and as Clean Energy concedes, judicial foreclosure

is not an appropriate legal remedy. Moreover, the financing agreement contains a

severability clause, which provides that “[i]f any provision of this Agreement is

held invalid or unenforceable by any court of competent jurisdiction, such holding

will not invalidate or render unenforceable any other provision of this Agreement.”

      Because judicial foreclosure is not an appropriate legal remedy for collecting

the non-ad valorem assessments, we find no error in the circuit court’s decision to

read the financing agreement in a manner that effectively severs this inappropriate

remedy and limits Clean Energy to the appropriate legal remedy—also provided by

the financing agreement—of collecting assessments pursuant to the uniform

method. See Fonte v. AT&T Wireless Servs., Inc., 903 So. 2d 1019, 1024 (Fla. 4th

DCA 2005) (“As a general rule, contractual provisions are severable, where the

illegal portion of the contract does not go to its essence, and, with the illegal

portion eliminated, there remain valid legal obligations.”).

      Indeed, this Court’s precedent supports reading bond documents in a manner

that complies with Florida law. For example, in County of Palm Beach v. State,

342 So. 2d 56, 58 (Fla. 1976), we reversed the trial court’s final judgment

invalidating a bond issuance by Palm Beach County based on the trial court’s

conclusion that, although the County’s bond resolution could have been read to

provide for the proper use of bond proceeds for capital expenses, it could have also


                                          -8-
been read to provide for the improper use of bond proceeds for operating expenses.

In so holding, this Court found it important that the County had expressed its intent

to only use the bond proceeds for proper projects. Id. We “accept[ed] the

averments of the [County] Commission” and reversed, noting that “if any attempt

is made to use bond proceeds in an improper manner an action for injunctive relief

would lie.” Id.; see also Gate City Garage, Inc. v. City of Jacksonville, 66 So. 2d

653, 659 (Fla. 1953) (declining to read City’s ordinance authorizing a bond

issuance in a manner that reserved to the City a power regarding the sale and lease

of the benefitted property that was not authorized by law).

      While we agree with the circuit court that judicial foreclosure is not an

appropriate remedy, we conclude that additional steps are required to implement

the circuit court’s ruling since the financing agreement will serve as the form for

all financing agreements between Clean Energy and the property owners who

participate in its PACE Program. Specifically, we remand with instructions for the

circuit court to require Clean Energy to amend the financing agreement to remove

all references to judicial foreclosure and to file the amended agreement in the

circuit court following its approval by Clean Energy’s governing board. Cf. State

v. City of Venice, 2 So. 2d 365, 367-68 (Fla. 1941) (remanding to circuit court

“with directions to require the amendment of the resolution and the bonds” to

correct language regarding the pledged funds that was “too broad to be sustained”


                                        -9-
and stating that “when the same are so amended the decree of validation . . . will

stand affirmed”).

      Finally, we agree with the circuit court that the Broward County residents

lack standing since Clean Energy’s voluntary dismissal of all Broward County

property owners, taxpayers, and citizens divested them of any justiciable interest in

the bond validation proceeding. Rich v. State, 663 So. 2d 1321, 1324 (Fla. 1995)

(holding that a “person interested” and therefore entitled to intervene in a bond

validation proceeding pursuant to section 75.07, Florida Statutes, “is anyone who

has a justiciable interest in a bond validation proceeding because he or she stands

to gain or lose something as a direct result of the bond issuance”).

                                  CONCLUSION

      For the foregoing reasons, we affirm the circuit court’s final judgment

validating Clean Energy’s bonds, but remand with instructions for the circuit court

to require Clean Energy to amend the financing agreement as described herein.

      It is so ordered.

LABARGA, C.J., and PARIENTE, LEWIS, QUINCE, CANADY, and PERRY,
JJ., concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.

An Appeal from the Circuit Court in and for Leon County – Bond Validations
     John C. Cooper, Judge – Case No. 13-CA-3457




                                        - 10 -
John Stephen Menton of Rutledge Ecenia, P.A., and James C. Dinkins of Mark G.
Lawson, P.A., Tallahassee, Florida,

      for Appellants

Edward George Guedes and Jeffrey Daniel De Carlo of Weiss Serota Helfman
Cole & Bierman, P.L., Coral Gables, Florida,

      for Appellees




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