Sunset Harbour Condominium Ass'n v. Robbins

We have on appeal a decision of the Third District Court of Appeal declaring section 192.042, Florida Statutes (1997), unconstitutional. Section . 192.042 requires property appraisers to assess all real property according to its just value as of January 1 of each year. However, if improvements to a parcel of property are not substantially completed on January 1, no valuation is to be placed on those improvements for that year. We hold that: (1) Sunset Harbour Condominium Association waived any objection to the property appraiser’s affirmative defense that section 192.042 is unconstitutional; and (2) section 192.042 reasonably implements the provisions of article VII, section 4 of the Florida Constitution (which directs the Legislature to prescribe regulations that will secure a just valuation of property) and, therefore, is constitutional. We reverse the district court’s decision and remand the case for proceedings consistent with this opinion.

STATEMENT OF THE CASE AND FACTS

Sunset Harbour Condominium, located in Miami, was in the final stages of construction as of January 1, 1997. The Miami-Dade County Property Appraiser, Joel Robbins, determined that the structure was substantially complete as of January 1, 1997, and assessed the property a value of $22,935,100. The Sunset Harbour Condominium Association filed suit and argued that under section 192.042(1), Florida Statutes (1997), the improvements to the property should have been assessed no value because the condominium was not “substantially complete” on January 1, 1997. Robbins raised as an affirmative defense that the statute violated article VII, section 4 of the Florida Constitution, and moved for . summary judgment on this ground. The trial court held that the statute was unconstitutional and granted summary judgment in Robbins’ favor. The Third District affirmed the trial court, Sunset Harbour N. Condo. Ass’n v. Robbins, 837 So.2d 1181 (Fla. 3d DCA 2003), for the reasons stated, in its earlier decision in Fuchs v. Robbins, 738 So.2d 338 (Fla. 3d DCA 1998). Fuchs was reversed by this Court after the Court held that the property appraiser did not have standing to challenge the statute in question. See Fuchs v. Robbins, 818 So.2d 460 (Fla.2002). Standing was not raised by the parties in this case in either the trial court or the Third District Court of Appeal. However, it was raised by Sunset Harbour in its initial brief to this Court and was addressed by several amici curiae.

The Florida Department of Revenue was named by' Sunset Harbour as a party defendant in the original action, as required by statute. The department joined Sunset Harbour as an appellant after the circuit court held section 192.042 to be unconstitutional.

We begin our analysis by determining whether Sunset Harbour preserved its objection to Robbins’ standing to raise the affirmative defense. We also address the constitutionality of section 192.042.

I. FAILURE TO RAISE AN OBJECTION TO THE AFFIRMATIVE DEFENSE

Sunset Harbour and amici curiae argue that Robbins lacked standing to raise the constitutionality of section 192.042 as an affirmative defense. As support for his argument that the affirmative defense was properly asserted, Robbins relies on obiter dictum from Fuchs. This dictum states that a property appraiser may raise a defensive challenge to the constitutionality of a statute.

We hold that Sunset Harbour waived any objection to the validity of the asserted affirmative defense because no objection was raised in either the trial court or the district court. As a general rule, it is not appropriate for a party to raise an issue for the first time on appeal. Dade County Sch. Bd. v. Radio Station WQBA, 731 So.2d 638 (Fla.1999) (a claim not raised in the trial court will not be considered on appeal); Dober v. Worrell, 401 So.2d 1322 (Fla.1981) (appellate court will not consider issues not presented to the trial judge on appeal from final judgment on the merits). “In order to be preserved for further review by a higher court, an issue must be presented to the lower court and the specific legal argument or ground to be argued on appeal or review must be part of that presentation if it is to be considered preserved.” Tillman v. State, 471 So.2d 32, 35 (Fla.1985). Because an objection to the availability of this affirmative defense to the property appraiser was not made at the trial court or the district court, we hold that any objection to the defense was waived.

II. THE CONSTITUTIONALITY OF SECTION 192.042, FLORIDA STATUTES

Having held that Sunset Harbour waived any objection to the affirmative defense asserted by Robbins, we now address the constitutionality of section 192.042. Robbins argues that section 192.042(1) is unconstitutional because article VII, section 4 of the Florida Constitution requires all property and structures to be assessed at fair market value, regardless of whether the structures are substantially completed. He argues that section 192.042(1) creates an unconstitutional fifth exception to the just valuation requirement in article VII, section 4. In Culbertson v. Seacoast Towers East, Inc., 212 So.2d 646 (Fla.1968), we rejected the claim that the predecessor substantially complete statute constituted an exception to the “just valuation” requirement. We recognized that the statute did not create an exception to the constitutional requirement that property be assessed at its fair market value but, instead, determined the time at which property improvements should be assessed (i.e., when they are substantially complete). Id. The same reasoning applies to this case.

We begin our analysis by restating the appropriate standard of review. We then address the state of the substantial completion statute after Culbertson. Finally, we discuss the legislative method for achieving a just valuation.

A. STANDARD OF REVIEW

This Court’s review of the district court’s decision is de novo. See Florida Fish & Wildlife Conservation Comm’n v. Caribbean Conservation Corp., Inc., 789 So.2d 1058, 1054 (Fla. 1st DCA 2001) (holding that whether a state statute is constitutional is a pure question of law subject to de novo review), approved, 838 So.2d 492 (Fla.2003).

Statutes come before this Court “clothed with a presumption of constitutionality.” Dep’t of Legal Affairs v. Sanford-Orlando Kennel Club, Inc., 434 So.2d 879, 881 (Fla.1983). Therefore, it is a fundamental rule of statutory construction that, if at all possible, a statute should be construed to be constitutional. See Van Bibber v. Hartford Accident & Indem. Ins. Co., 439 So.2d 880, 883 (Fla.1983). In fact, this Court is bound “to resolve all doubts as to the validity of [the] statute in favor of its constitutionality, provided the statute may be given a fair construction that is consistent with the federal and state constitutions as well as with the legislative intent.” State v. Stalder, 630 So.2d 1072, 1076 (Fla.1994) (quoting State v. Elder, 382 So.2d 687, 690 (Fla.1980)). In interpreting constitutional provisions, “[t]he fundamental object to be sought in construing a constitutional provision is to ascertain the intent of the framers and the provision must be construed or interpreted in such manner as to fulfill the intent of the people, never to defeat it.” Gray v. Bryant, 125 So.2d 846, 852 (Fla.1960).

B. THE SUBSTANTIAL COMPLETION STATUTE AFTER CULBERTSON

In 1968 this Court upheld the constitutionality of section 193.11, the predecessor to section 192.042, under the 1885 version of the constitution. See Culbertson v. Seacoast Towers East, Inc., 212 So.2d 646 (Fla.1968). The Court stated:

The statute constitutes only a temporary postponement of valuation and assessment of incomplete improvements on real property provided the prescribed conditions are met on the annual assessment date. The requirement is simply that the separate classification of such property shall bear some reasonable relationship to the legislative power to prescribe regulations to secure a just evaluation of property. Factors analogous to those here involved have in numerous instances been made the basis for special statutory treatment.

Id. at 647. We find no basis to believe the 1968 revisions to the just valuation provision were intended by the drafters or the public to invalidate the substantial completion statute. Although Culbertson was decided prior to the 1968 constitutional amendments, both the 1968 and 1885 constitutions mandate a “just valuation” for all property. See art. IX, § 1, Fla. Const. (1885); art. VII, § 4, Fla. Const. (1968). Article VII, section 4 of the Florida Constitution states:

By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation, provided:

(a) Agricultural land, land producing high water recharge to Florida’s aquifers, or land used exclusively for noncommercial recreational purposes may be classified by general law and assessed solely on the basis of character or use.

(b) Pursuant to general law tangible personal property held for sale as stock in trade and livestock may be valued for taxation at a specified percentage of its value, may be classified for tax purposes, or may be exempted from taxation.

(c) All persons entitled to a homestead exemption under Section 6 of this Article shall have their homestead assessed at just value as of January 1 of the year following the effective date of this amendment. This assessment shall change only as provided herein.

(d) The legislature may, by general law, for assessment purposes and subject to the provisions of this subsection, allow counties and municipalities to authorize by ordinance that historic property may be assessed solely on the basis of character or use. Such character or use assessment shall apply only to the jurisdiction adopting the ordinance. The requirements for eligible properties must be specified by general law.

(e)A county may, in the manner prescribed by general law, provide for a reduction in the assessed value of homestead property to the extent of any increase in the assessed value of that property which results from the construction or reconstruction of the property for the purpose of providing living quarters for one or more natural or adoptive grandparents or parents of the owner of the property or of the owner’s spouse if at least one of the grandparents or parents for whom the living quarters are provided is 62 years of age or older. Such a reduction may not exceed the lesser of the following:

Article VII, section 4 of the 1968 Constitution replaced article IX, section 1 of the 1885 Constitution, which stated:

The Legislature shall provide for a uniform and equal rate of taxation ... and shall prescribe such regulations as shall secure a just valuation of all property, both real and personal, excepting such property as may be exempted by law for municipal, educational, literary, scientific, religious or charitable purposes.

The phrase “just valuation” has been construed by this Court to mean “fair market value.” See Mazourek v. Wal-Mart Stores, Inc., 831 So.2d 85, 88 (Fla.2002) (citing Valencia Center, Inc. v. Bystrom, 543 So.2d 214, 216 (Fla.1989)); see also Walter v. Schuler, 176 So.2d 81, 85-86 (Fla.1965) (“fair market value” legally synonymous with “just valuation”).

Robbins relies on Interlachen Lakes Estates, Inc. v. Snyder, 304 So.2d 433 (Fla.1973), to support his argument that the 1968 constitutional amendments, enumerating specific instances where property may be valued according to different valuation standards, affect the holding in Culbertson. This argument is without merit. In Interlachen, this Court held that section 195.062(1), Florida Statutes’(1971), violated article VII, section 4 of the 1968 Florida Constitution. Section 195.062(1) provided that “platted lands unsold as lots shall be valued for tax assessment purposes on the same basis as any unplatted acreage of similar character until 60 percent of such lands included in one plat shall have been sold as individual lots.” Interlachen, 304 So.2d at 434. The Court stated, “It is true that the donstitutiónal provision allows the Legislature to prescribe regulations for the purpose of securing a just valuation of all property, but such regulations must apply to all property and not to any one particular class.” Id: The Court held that the statute created a classification based on ownership, effectively giving a subdivision developer a “tax break by treating his unsold lots as unplat-ted for tax valuation purposes.” Id. at 435. The Court pointed out in Interlachen that the statute taxed similar property differently, depending on who owned it. If the lot had been sold, the land was taxed; if it had not been sold, the land was not taxed. The Court also noted its concern that assessment standards and criteria might be manipulated to favor certain taxpayers over others. Unlike section 192.042(1), the statute at issue in Interla-chen did not permit a “just valuation” of all property. For this reason, Interlachen is distinguishable from Culbertson and the case currently before us. The Fourth and Fifth District Courts of Appeal have recognized this fact. Indeed, they have relied on Culbertson to uphold the constitutionality of the same statute at issue in this case. In 1983, the Fourth District Court of Appeal held that section 192.042 did not violate article VII, section 4 of the 1968 constitution. See Markham v. Yankee Clipper Hotel, Inc., 427 So.2d 383 (Fla. 4th DCA 1983). The Fifth District followed suit in its 1988 decision in Hausman v. Bayrock Inv. Co., 530 So.2d 938 (Fla. 5th DCA 1988). The court stated: “We think the validity of the statute is settled by [Culbertson ] and [Markham ].” Id. at 939 (citations omitted). We agree.

C. THE METHOD FOR ACHIEVING A JUST VALUATION

While the Florida Constitution requires that “[b]y general law regulations shall be prescribed which shall secure a just valuation of all property,” art. VII, § 4, Fla. Const., the framers of the constitution delegated to the Legislature the responsibility for deciding the specifics of how that “just valuation” would be secured. See Collier County v. State, 733 So.2d 1012, 1019 (Fla.1999) (the constitution requires the Legislature to enact the general law regarding the collection of ad valorem taxes, and the Legislature has established a specific statutory scheme for the timing of the valuation and assessment). One of these determinations, of course, was when the various types of property would be assessed. The Legislature fulfilled its constitutional obligation in section 192.042, which states in part:

All property shall be assessed according to its just value as follows:

(1) Real property, on January 1 of each year. Improvements or portions not substantially completed on January 1 shall have no value placed thereon. “Substantially completed” shall mean that the improvement or some self-sufficient unit within it can be used for the purpose for which it was constructed.

§ 192.042, Fla. Stat. (1997). This statute reflects the Legislature’s intent to delay valuation of improvements to property until such time as these improvements are substantially completed. In upholding the constitutionality of a predecessor statute to section 192.042(1), this Court noted the timing decision contemplated by the statutory scheme. See Culbertson, 212 So.2d at 647. We believe in this case, as we did in Culbertson, that “[t]he statute constitutes only a temporary postponement of valuation and assessment of incomplete improvements on real property provided the prescribed conditions are met on the annual assessment date.” Id.; see also Yankee Clipper, 427 So.2d at 385 (“The legislature’s determination that an incomplete structure, unusable for the purposes intended upon its completion, should not be assessed in that condition is a matter of perception.”). As this Court stated in Collier County v. State, 733 So.2d 1012 (Fla.1999):

The constitution requires the Legislature to enact the general law regarding the collection of ad valorem taxes, and the Legislature has established a specific statutory scheme for the timing of the valuation and assessment. Section 192.042(1) makes clear that partial year assessments are not authorized for improvements to real property substantially completed after January 1, which “shall have no value placed thereon.” There is no ambiguity in the statute. It appears that any benefit to taxpayers was specifically contemplated by the legislative scheme....

If there is a windfall created by the current statutory scheme, as the County claims, the County’s redress lies with the Legislature. While we do not know why the Legislature has declined to .act, as observed by the trial court in this case: “We clearly have able and competent legislators who are obligated to do the right thing.”

To achieve the relief sought, the counties must persuade the Legislature to provide the cure, not the courts.

Id. at Í019.

The “substantial completion” statute implements the provisions of article VII, section 4 in such a way as to provide predictability in the assessment rolls which serve as the basis for revenue projections in the local government budget-making process. The statute prescribes reasonable guidelines for valuation of incomplete improvements for property tax purposes, which infuse uniformity and certainty into ad va-lorem taxation. The absence of a -“substantial, completion” statute would only promote uncertainty and encourage litigation.

In essence, we previously upheld the constitutionality of the substantial completion statute against a constitutional challenge in Culbertson v. Seacoast Towers East, Inc., 212 So.2d 646 (Fla.1968). We do the same here. While the constitution requires a just valuation of all property, the Legislature is given the responsibility for deciding the specifics of how that just valuation is secured. We hold that section 192.042 is a reasonable and, therefore, constitutional implementation of article VII, section 4 of the Florida Constitution.

CONCLUSION

We hold that: (1) Sunset Harbour waived any objection to the property appraiser’s affirmative defense that section 192.042 is unconstitutional; and (2) section 192.042 does not violate article VJI, section 4 of the Florida Constitution. We hereby reverse the decision of the Third District Court of Appeal and remand for proceedings consistent with this opinion.

It is so ordered.

PARIENTE, C.J., and WELLS, ANSTEAD, LEWIS, QUINCE, CANTERO, and BELL, JJ., concur.

BELL, J., concurs specially with an opinion, in which PARIENTE, C.J., concurs.

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

. Section 192.042(1), Florida Statutes (1997), provides:

All property shall be assessed according to its just value as follows:

(1) Real property, on January 1 of each year. Improvements or portions not substantially completed on January 1 shall have no value placed thereon. “Substantially completed” shall mean that the improvement or some self-sufficient unit within, it can be used for the purpose for which it was constructed.

.The trial court in Fuchs declared section 192.042(1), Florida Statutes, unconstitutional, A three judge panel of the Third District reversed the trial court’s finding. See Fuchs v. Robbins, 738 So.2d 338 (Fla. 3d DCA 1998). However, on rehearing en banc, the court affirmed the trial court and declared the statute unconstitutional.

. The terms "fair market value” and "just valuation” are synonymous in this context. See Walter v. Schuler, 176 So.2d 81, 85-86 (Fla.1965).

. Section 193.11 provided:

All taxable lands upon which active construction of improvements is in progress and upon which such improvements are not substantially completed on January 1 of any year shall be assessed for such year, as unimproved lands. Provided, however, the provisions hereof shall not apply in cases of alteration or improvement of existing structures.

§ 193.11(4), Fla. Stat. (1967). Section 193.11 was renumbered in 1969 as section 193.071. See ch. 69-55, § 2, at 241, Laws of Fla. In making these changes, the Legislature indicated that "the substantive impact of every section is completely unchanged.” See id. § 4, at 257 (revisor's note). In 1970, the Legislature reorganized and simplified the ad valorem taxation statutes. Section 193.071 was repealed and section 192.042 took its place. See ch. 70-243, § 4, at 713, § 49, at 740, Laws of Florida.

. Section 192.042, Florida Statutes (1997), states:

All property shall be assessed according to its just value as follows:

(1) Real property, on January 1 of each year. Improvements or portions not substantially completed on January 1 shall have no value placed thereon. "Substantially completed” shall mean that the improvement or some self-sufficient unit within it can be used for the purpose for which it was constructed.

(2) Tangible personal property, on January 1, except construction work in progress shall have no value placed thereon until substantially completed as defined in s. 192.001(1 l)(d).

(3) Intangible personal property, according to the rules laid down in chapter 199.