City of Palm Bay v. Wells Fargo Bank, N.A.
114 So. 3d 924 (2013)
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Rule of Law:
A municipal ordinance granting superpriority status to its code enforcement liens is invalid if it conflicts with a state statutory scheme that establishes the priority of interests in real property. Municipal home rule power does not authorize a local government to enact legislation that conflicts with state law.
Facts:
- Wells Fargo Bank, N.A. held a mortgage on a property, and this mortgage was recorded in the public records.
- The City of Palm Bay enacted Ordinance 97-07, which purported to give its code enforcement liens superpriority status, making them 'superior in dignity to all other liens, titles, and claims.'
- After Wells Fargo's mortgage was recorded, the owner of the subject property committed a code violation.
- As a result of the violation, the City of Palm Bay recorded a code enforcement lien against the property.
- This created a dispute over lien priority between Wells Fargo's pre-existing mortgage and the City of Palm Bay's subsequent code enforcement lien.
Procedural Posture:
- The City of Palm Bay and Wells Fargo Bank, N.A. became involved in a legal dispute over the priority of their respective liens on a parcel of real property.
- The case was heard by the Fifth District Court of Appeal of Florida, which ruled in favor of Wells Fargo.
- The Fifth District Court of Appeal held that the City's ordinance superpriority provision was invalid because it conflicted with state statute.
- The City of Palm Bay, as petitioner, sought review from the Supreme Court of Florida.
- The Fifth District Court of Appeal certified a question of great public importance, and the Supreme Court of Florida accepted jurisdiction to review the case.
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Issue:
Under Florida's constitutional and statutory home rule framework, does a municipality have the authority to enact an ordinance granting its code enforcement liens superpriority status over prior recorded mortgages, thereby conflicting with the state's general statutory scheme for lien priority?
Opinions:
Majority - Canady, J.
No. A municipality does not have the authority to enact an ordinance granting its code enforcement liens superpriority status when that ordinance conflicts with the state's statutory scheme for lien priority. The Palm Bay ordinance provision establishing superpriority is invalid because it irreconcilably conflicts with the priority established by state law in Chapter 695, Florida Statutes. Municipal ordinances are inferior to state laws and cannot stand when they conflict with a controlling statute. Although municipalities have broad home rule powers under the Florida Constitution, that power is limited by the phrase 'except as otherwise provided by law,' establishing the supremacy of state legislative power. The fact that the state legislature has created its own specific statutory exceptions to the general priority rule does not grant municipalities the authority to create their own competing exceptions.
Dissenting - Perry, J.
Yes. The City of Palm Bay has the authority under its home rule powers to enact the superpriority ordinance because state law has not expressly prohibited it. Municipalities may exercise any power for municipal purposes unless 'expressly prohibited by law' or the subject is 'expressly preempted.' The state's recording statutes are mechanical and do not expressly preempt local ordinances regarding lien priority. The state legislature has created numerous exceptions to the 'first in time, first in right' rule, which demonstrates that the state's statutory scheme is not so pervasive as to occupy the entire field. Therefore, the City was acting within its concurrent legislative authority to create another such exception.
Analysis:
This decision reaffirms the principle of state legislative supremacy over municipal home rule powers in Florida. It clarifies that 'conflict preemption' invalidates a local ordinance even without an express preemption statement from the legislature if the ordinance directly undermines a comprehensive state statutory scheme. The ruling protects the stability and predictability of the statewide real estate recording system, ensuring that lenders and purchasers can rely on the priority rules established by state law without needing to research unique ordinances in every municipality. It establishes that the power to create exceptions to a state law rests solely with the state legislature, not with local governments.
