Florida Supreme Court Rules Municipal Ordinance Superiority Provision is Invalid and Bank's Prior Recorded Mortage is Superior
In City of Palm Bay v. Wells Fargo Bank, N.A., No. SC11-830 (Fla. May 16, 2013), the Supreme Court of Florida ruled that a municipal ordinance superiority provision is invalid as conflicting with state law. The certified question the Court considered was the following: Whether under Article VIII, section 2(b), Florida Constitution, section 166.021, Florida Statues and Chapter 162, Florida Statutes, a municipality has the authority to enact an ordinance stating that its code enforcement lien, created pursuant to a code enforcement board order and recorded in the public records of the applicable county, shall be superior in dignity to prior recorded mortgages? In City of Palm Bay v. Wells Fargo Bank, N.A., 57 So.3d 226 (Fla. 5th DCA 2011), the Fifth District concluded that such a municipal ordinance superiority provision is invalid because it conflicts with a state statute. The Court also concluded that the City's lien accordingly did not have priority over the lien of Wells Fargo's mortgage that was recorded before the City's lien was recorded. On appeal, the City argued that the municipal ordinance superiority provision is within the "broad home rule powers" of the City. The City also argued that the legislative enactment of exceptions to a statutory scheme provides justification for municipalities to enact exceptions to a statutory scheme. In its analysis, the Court acknowledged that municipalities in Florida are given broad authority to enact ordinances under their municipal home rule powers." City of Hollywood v. Mulligan, 934 So.2d 1238, 1243 (Fla. 2006). The Court also acknowledged that under Section 166.021 - "a municipality may legislate concurrently with the Legislature on any subject which has not been expressly preempted to the State." Hollywood, 934 So.2d at 1243. But the Court noted that where concurrent state and municipal regulation is permitted because the state has not preemptively occupied a regulatory field, "a municipality's concurrent legislation must not conflict with state law." Thomas v. State, 614 So.2d 468, 470 (Fla. 1993). The Court noted that the critical phrase of Article VII, Section 2(b) pertaining to the extent of a municipality's power, "except as otherwise provided by law," establishes the constitutional superiority of the Legislature's power over municipal power. Accordingly, municipal ordinances are inferior to laws of the State and must not conflict with any controlling provision of a state. Thomas, 614 So.2d at 470. Further, the Court noted the ordinance established a priority that is inconsistent with the priority established by Chapter 695 of the Florida Statutes. In finding that the ordinance superiority provision is invalid, the Court stated that this municipal ordinance superiority provision would destroy rights that the Legislature established by state law. As Justice Canady put it, "A more direct conflict with a statute is hard to imagine." For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.