by Gary Taylor
C. Line, Inc., vs. Malin and the City of Davenport
(Iowa Court of Appeals, December 7, 2011)
In February 1997, C. Line opened an adult cabaret business in Davenport called “Chorus Line.” In 2001, the City adopted an ordinance providing for the licensing and regulation of “adult entertainment” businesses. Two years later C. Line filed a petition in federal court claiming the ordinance was unconstitutional. This lawsuit was resolved in August 2004 when the parties entered into a consent decree that issued a license to C. Line, allowed for the sale of C. Line without loss of the license, and declared C. Line to be a pre-existing nonconforming use.
In 2008 C. Line voluntarily closed Chorus Line, and the business was evicted from its location by a forcible entry and detainer petition granted in favor of the landlord. The following year the ownership of C. Line was transferred to Nadeem Mazhar, who applied to the city for a license to reopen the adult cabaret business in the same location as before, based on the pre-existing nonconforming use stipulation in the consent decree. Dr. John’s Lingerie Boutique opened in the same building, however, in August 2008 under a retail business license. Dr. John’s sells lingerie, shoes, and hosiery as well as novelties, movies, and magazines of a sexual nature. Malin, the Davenport city administrator, performed a site inspection for the C. Line application, and after observing Dr. John’s advertising and merchandise, a letter – under the signature of the city’s chief financial officer – was issued denying C. Line’s adult cabaret license as violating the Davenport Municipal Code section prohibiting two adult entertainment businesses from being located on the same lot or within 500 feet of each other. C. Line appealed under city administrative procedures that provided for the city administrator (Malin) to act as the hearings officer. C. Line filed objections to Malin acting as the hearing officer and moved that he recuse or disqualify himself, but the objections were denied.
The city called one witness, an inspector, at the administrative appeal. The inspector testified that by his observations Dr. John’s was an “adult store.” He did not make any square footage measurements or county any inventory. C. Line called several witnesses. Among them, the store manager for Dr. John’s testified that at no point in time has the City of Davenport required the store obtain an adult entertainment business license. She further stated that several of the lingerie and novelty items could be found at similar retail stores, like Victoria’s Secret and Spencer Gifts. The chief financial officer testified that he never inspected Dr. John’s and was basing the denial letter solely on information obtained from the Malin.
Following the conclusion of the hearing the Malin performed a follow-up inspection of Dr. John’s, and based upon his measurements, calculations, and direct observations of the store’s space and displays, the Malin concluded that Dr. John’s was an “adult store” and upheld the denial of C. Line’s adult cabaret license application. Malin made no attempt to address C. Line’s argument that it was a legal preexisting nonconforming use. C. Line appealed to district court, and after a litany of procedural moves the district court ruled for C. Line on the ultimate land use issue. Although appeals and cross appeals were filed, this brief focuses on the nonconforming use issue.
Pre-existing nonconforming use. It was undisputed that the express words of the consent decree provided C. Line with an adult cabaret license and the status of a preexisting nonconforming use. As such, C. Line was permitted to continue until legally abandoned. The court cited Davenport Municipal Code section 17.46.020, concerning abandonment: “In the event that a nonconforming use of any building or premises is discontinued or its normal operation stopped for a period of one year, the use of the same shall thereafter conform to the regulations of the district in which it is located.” The city argued the nonconforming use was abandoned either when C. Line ceased operations in November 2008 or when the forcible entry and detainer petition was granted in December 2008. The court noted, however, that the city’s ordinance does not require any subjective intent, but effectively extinguishes nonconforming uses based solely on discontinuance of the use for a specified period of time. Since C. Line voluntarily ceased operations in November 2008 and was evicted in December 2008, but sought to reopen in July 2009, C. Line did not stop using the site as an adult cabaret for over one year and did not lose its status as a legal nonconforming use under the Davenport Municipal Code. The nonconforming use did not become the landlord’s upon eviction either, as the city suggested. Although possession may have been transferred from C. Line in December 2009, C. Line reestablished possession of the land prior to the one-year expiration date. This argument was premised on a finding that the nonconforming use “leapfrogged” to Dr. John’s, which was incorrect because Dr. John’s was not an adult store and the city had never recognized it as such.