Business growth is a self-created hardship for variance purposes

by Kaitlin Heinen

Larry Hacker et al. v. Sedgwick County, Kansas Board of Zoning Appeals
(Kansas Court of Appeals, September 14, 2012)

Norman and Leatha Hein have operated a lawn care business from their rural home for 30 years. Their property is zoned as RR Rural Residential. In 2010, the Heins filed a petition with the Sedgwick County, Kansas Board of Zoning Appeals for three variances: “(1) to allow up to 20 employees with no more than 15 on site in excess of 1 hour per day; (2) to allow the use for business purposes of existing outbuildings with a combined floor area exceeding 3,000 square feet; and (3) to allow outdoor storage closer to the street than the buildings used for the business and closer than 200 feet from property lines.” The Heins alleged that these variances were necessary because they had acquired additional customers. Also, more equipment was stored at their property, and the new variances would allow the employees to perform necessary equipment maintenance on the property, especially during inclimate weather.

In October of 2010, the Board held a meeting at which the Heins’ petition was considered. The Board looked at the five criteria under K.S.A 12-759(e)(1) that must be met before the Board can grant a variance as well as the Board staff’s report, which recommended that only two of the three variance be granted under certain conditions. At this meeting, Norman Hein explained that the first variance was necessary to allow six drivers to transport lawn care equipment instead of the four needed in the past. It would also allow employees to gather at the property and share rides with each other to the job sites and account for the need to perform equipment maintenance on the property.

Several neighbors and customers spoke in support of the Heins’ petition at the meeting.  The exceptions were Richard Gronniger and Terry and Larry Hacker.  Gronniger owned property south of the Heins’, and Hacker operated Kansas Paving (a sand pit) on Gronniger’s property. Kansas Paving was paying for maintenance of the road (~$15,000 per year) that separates Gronniger’s and the Heins’ properties in accordance with the conditional use permit given to operate the sand pit. Gronniger and Hacker argued that the Heins should also be required to apply for a conditional use permit and contribute to road maintenance costs.

The Board initially found that all five criteria under K.S.A. 12-759(e)(1) had been met for each variance and granted all three for the Heins.  Larry Hacker, Terry Hacker, Richard Gronniger, and Kansas Paving filed a petition in the district court challenging the reasonableness of the Board’s decision. After the district court twice reversed the Board’s decision, the Board appealed to the Kansas Court of Appeals, arguing that the plaintiffs lacked standing to appeal the Board’s decision, and so the district court, by extension, lacked jurisdiction to rule on the matter. The Board also argued that there was substantial evidence to support its finding of a hardship that was not self-created by the Heins in accordance with 12-759(e)(1)(C).

The Board argued that the plaintiffs’ only way to appeal its decision was under K.S.A. 12-759(f), which allows appeals from any person “dissatisfied with” a board of zoning appeal’s decision. The Board urged that the district court interpret the phrase “dissatisfied with” so as to give standing only to the original parties of a board’s proceedings, which is a smaller class of persons than those who may be “aggrieved by” a board’s decision under K.S.A. 12-760. The Board also argued that the plaintiffs did not have a particularized interest affected by its decision. To the contrary, the plaintiffs argued that they can appeal under both K.S.A. 12-759(f) and K.S.A. 12-760. The plaintiffs alleged that the Board’s above interpretation would prevent neighbors from appealing a board’s decisions that adversely affect their interests. The plaintiffs also held that they have a particularized interest in the increased traffic on and the increased maintenance costs of the road in question.

The Kansas Court of Appeals addressed the two relevant statutes at issue in this case: K.S.A. 12-759(f) and K.S.A. 12-760. The court held that a specific statute will control over a general statute. Since K.S.A. 12-759(f) applies only to decisions made by a board of zoning appeals, it is more specific than K.S.A. 12-760, which applies to multiple kinds of boards. Even so, the court ruled that the test for “dissatisfied with” in K.S.A. 12-759(f) should be considered the same as the test for “aggrieved by” in K.S.A. 12-760. The Kansas Court of Appeals cited its former decision in Tri-County Concerned Citizens, Inc. v. Board of Harper County Comm’rs that found that the plaintiffs had standing under K.S.A. 12-760 because the plaintiffs would suffer a pecuniary loss as a result of the county’s decision to allow a waste disposal company to build a new landfill nearby. Applying this decision to the current case, the court ruled that the Hackers, Gronniger, and Kansas Paving had a substantial grievance and a pecuniary interest in the effects of the Board’s decision, granting them standing under K.S.A. 12-759(f).

The Kansas Court of Appeals stated that under K.S.A. 12-759(e)(1), a board of zoning appeals is authorized to grant a variance only if all five statutory criteria are met. The only criterion at issue was the finding of an unnecessary hardship. In the past, the Kansas courts have held as a general rule that a variance may not be granted to relieve a self-created hardship. The Board argued that an unnecessary hardship may be found where hardship is imposed by self-created business growth. The plaintiffs argued that it cannot.  Citing four different cases as precedent, the Kansas Court of Appeals found that there was no indication that the Heins would lose their business without the variances; the business would simply be less profitable. Considering this, self-created business growth is not an exception to the general rule that an unnecessary hardship may not be self-created.

The Kansas Court of Appeals concluded that the district court rightly found that the Board acted outside its scope of authority in granting the variances. The Heins expanded their business with full knowledge of the zoning regulations under which they were operating. Because the Board’s findings were not supported by substantial evidence, the district court’s rule to vacate the variances granted by the Board was affirmed.