City sues Nikolits over condo appraisals
March 4th, 2007 - Category: Condo, Real EstateThe people are crying over too-high property taxes. But West Palm Beach Mayor Lois Frankel says they’re not high enough.
In an unprecedented move by a city, West Palm Beach is suing Palm Beach County Property Appraiser Gary Nikolits, demanding he boost tax assessments on three new downtown condominiums so the city can collect more taxes on them.
The city says the assessments on the 610 Clematis, The Prado and One City Plaza condos are too low, having been calculated on the properties’ land value only, instead of the completed buildings.
But Nikolits, who insists his assessments are correct, is fighting back. He’s gone to the 4th District Court of Appeal to have the city’s lawsuit tossed, arguing cities don’t have the right to sue property appraisers. Nikolits just won the first round: The court has asked the city to show why its case shouldn’t be dismissed.
Ah, the irony of it all.
The beleaguered Nikolits is under attack from taxpayers countywide who say his assessments are too high. Now West Palm Beach says his assessments are too low, proving no good deed goes unpunished. Nikolits called West Palm Beach “anti-taxpayer. It points to the greed of those wanting more tax dollars so they can spend them.”
Property assessments determine an owner’s yearly tax bill. One homeowner at One City Plaza said taxes for her incomplete condo were set at $1,800 for 2006. As a completed condo, taxes will be $10,000 for 2007 - more than five times as much money.
Nikolits says he has a good reason for his low assessments: Construction wasn’t finished on the buildings by Jan. 1, 2006. In fact, only parts of each building received temporary certificates of occupancy early last year, after Jan. 1. (The exception: Units on floors 1-4 of 610 Clematis, which had certificates before Jan. 1 and were taxed as completed.)
Without a certificate, buyers couldn’t close on their units and obtain homestead exemptions by the Jan. 1 deadline. Even with the certificates, though, the buildings were finished incrementally, floor by floor. Many common elements, such as swimming pools, weren’t finished until months after buyers moved in.
“The city obviously wants the most money they can get into their coffers,” Nikolits said. “But it’s an issue of fairness. If you can’t use a piece of property, and you can’t even close on it, how can you be taxed for it?”
But the city isn’t wavering. City officials believe the lower assessments are depriving the city of millions of dollars. And that money has to be made up somewhere.
“By undertaxing those people, other people got overtaxed,” said Ken Spillias, an attorney representing the city. Spillias said Nikolits erred because he focused too much on temporary certificates of occupancy instead of other factors, such as whether the building is fit for occupancy.
There is one thing both sides can agree on: The case is a first in Florida.
Nikolits, who said he’s never been sued by a municipality before, believes the case could set a dangerous precedent statewide. “There are 67 property appraisers,” Nikolits said.
“If the courts were to find taxing authorities can sue property appraisers, we’d be spending a lot of time in court.”
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For the second time in five years, venerable trusts and estates lawyer Joseph Fleming is being accused of having a sharing problem.
Lawyers at Fleming’s latest ex-law firm say he didn’t share the fees he earned as a personal representative and trustee on several estates - including one estate worth $200,000 in fees alone.
Watterson & Zappolo in Palm Beach Gardens clocks the total unreported fees at a whopping $1.1′million. Now the firm wants Fleming to cough up triple damages, or more than $3 million, according to a lawsuit filed in Palm Beach County Circuit Court.
Although the firm says it fired Fleming in 2004 after it learned of the undisclosed fees, the money dispute remains unresolved, resulting in a lawsuit replete with claims of civil theft and conversion.
Who is Joseph Fleming? He is a top-notch lawyer with a knack for attracting rich clients. He was also a founding partner of the boutique North Palm Beach law firm, Fleming Haile & Shaw.
We say “was” because Fleming left his own firm in 2002. Reasons for his departure were unclear. But when he joined Watterson’s firm in 2003 (starting salary: $200,000) he says he left his old firm because he was tired of being around “incompetent” lawyers, the lawsuit says.
The Watterson lawsuit paints a different picture. Once Fleming was bounced in July 2004, lawyers cleaning out Fleming’s office were “shocked” to find documents showing Fleming was fired from Fleming Haile & Shaw, the lawsuit says. The alleged reason: Not disclosing trustee and personal representative fees.
“If you ask me if the allegations are true, I can’t deny them,” said Fleming’s former partner, Robert Haile. He wouldn’t talk further, citing confidentiality rules.
In an interview, Fleming and his attorney also wouldn’t talk details of his departure from his first ex-firm.
But they did say the second ex-firm, Watterson’s firm, never required that Fleming hand over his non-legal compensation.
Trustee fees aren’t legal fees because you don’t need to be a lawyer to be a trustee, explained Bernard Lebedecker, Fleming’s lawyer.
“That doesn’t make any sense,” said Watterson’s lawyer, Gerald Richman. He questioned why anyone would hire a part-time lawyer with a lucrative side business outside the firm’s reach. “Fleming breached his fiduciary duty to the firm as a professional,” Richman said.
But Fleming has an answer: He said the Watterson firm knew about his trustee work from the get-go, but only started caring about his extra income when Fleming began questioning how the law firm was being run.
Fleming is trying to have the lawsuit dismissed.
Meanwhile, Fleming has given up trying to work with outsiders. He’s started his own firm in North Palm Beach with his two sons.
Alexandra Clough writes about business and the law. Contact her at The Palm Beach Post, 2915 Congress Ave., Delray Beach, FL 33445; 561-820-3469 or 561-279-3469; e-mail: alexandra_clough@pbpost.com.
Source: www.palmbeachpost.com
