Owner of purchase option has standing to apply for variance in Nebraska

by Gary Taylor

Field Club Home Owners League v. Zoning Board of Appeals of the City of Omaha
(Nebraska Supreme Court, May 11, 2012)

Volunteers of America (VOA) proposed to build an apartment-style building for veterans in Omaha.  To construct the building as planned, VOA applied to the Omaha Zoning Board of Appeals (Board) for variances from area and use restrictions. The appellants, Field Club Home Owners League and Thornburg Place Neighborhood Association (Field Club) opposed the application. The Board granted the variances, concluding that the 1987 Code created an unnecessary hardship because it did not contemplate a project like VOA’s. The district court affirmed the Board’s decision, and Field Club appealed to the Nebraska Supreme Court.

Field Club argued that VOA lacked standing to request variances from the Board because VOA had not obtained a certificate of authority pursuant to Neb. Rev. Stat. 21-20,169(1), which provides that “[a] foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.”  The Nebraska Supreme Court found the provision inapplicable because, although VOA is a foreign corporation, VOA was not “maintaining” a court proceeding. It was Field Club that petitioned the district court and named VOA as a defendant.

Field Club also contended that because the owner of the property was Kiewit Construction Company, and not VOA, that VOA lacked standing because it had no legally cognizable interest in the property. The Supreme Court noted that the majority of courts that have considered the issue hold that a prospective purchaser under a purchase agreement subject to the grant of a variance or rezoning has standing to seek the change. Similarly, courts have held that the holder of an option to purchase property has standing to apply for a variance when the holder is bound to purchase the property if the variance is obtained or when the property owner anticipated that the option holder would seek the variance to complete the sale.  The Supreme Court agreed with these other jurisdictions, and further noted that the principles hold true in administrative proceedings as well as judicial proceedings.

However, the Supreme Court noted that Field Club did not raise the issue of standing until the case reached the Supreme Court.  Partly as a result of this, the record did not contain evidence addressing VOA’s interest in the property.  Therefore, the Supreme Court remanded the case to district court to receive additional evidence and determine whether VOA had sufficient interest in the property to seek the variances.

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