Year: 2012

Hamburg (IA) adult business licensing scheme preempted by state law

Gary Taylor

by Gary Taylor

Mall Real Estate, LLC v. City of Hamburg
(Iowa Supreme Court, July 27, 2012)

In 2008, the Hamburg city council passed its “Sexually Oriented Business Ordinance.” It contains provisions relating to licensing and zoning and imposes a range of regulations upon sexually oriented businesses.  Businesses subject to the terms of the ordinance include adult cabarets, which the ordinance defines, among other things, as any “business or entity that is with the emphasis on observation or viewing of nude or semi-nude performances whether the performers receive compensation or not, that regularly features persons who appear nude or semi-nude.” The ordinance requires a sexually oriented business to have a valid sexually oriented business license and an employee of a sexually oriented business to have a valid sexually oriented business employee license. Further, the ordinance regulates many aspects and activities of sexually oriented businesses, including the consumption of alcohol on the premises, exterior design aspects of the businesses including signage, hours of operation, the exhibition of sexually explicit films, live nudity, and siting. For example, the ordinance prohibits any person from intentionally or knowingly appearing in a state of nudity or from intentionally or knowingly violating Iowa Code section 728.5. The ordinance contains requirements that seminude employees remain more than six feet away from customers and on a stage at least two-feet high. It also prohibits the exchange of gratuities between customers and seminude employees and prohibits intentional contact between customers and seminude employees.  If a sexually oriented business licensee violates the ordinance or knowingly allows an employee to violate the ordinance, then the City may suspend or revoke the license of the business and the employee.

Mall Real Estate (MRE) leases space in Hamburg to the Hamburg Theatre for the Performing Arts, aka Shotgun Geniez.  Performers at the Hamburg Theatre perform nude, seminude, and fully clothed. At times during performances, performers physically contact customers, often by sitting in their laps. The performers also spend time talking to customers. The Hamburg Theatre does not have a liquor license or sell alcohol, but it does allow customers to supply their own alcohol.  Shortly after the City adopted the ordinance MRE filed a lawsuit seeking to declare the ordinance unconstitutional, and also that the ordinance is in conflict with, and is therefore preempted by state law. The district court upheld the validity of the Hamburg ordinance, and MRE appealed.  The Iowa Supreme Court decided the case on the preemption issue and did not address MRE’s constitutional claims.

MRE argued that because Iowa Code 728.5(3) creates a “theater exception” to the regulation of obscenity and the Hamburg ordinance did not, the ordinance is therefore in conflict with and preempted by state law.  The City argued that the final sentence of 728.11 – also in the state code chapter pertaining to obscenity – allows local governments to pass ordinances related to zoning and licensing of businesses dealing in obscene materials.

Iowa Code 728.5 provides in part:

1.  An owner, manager, or person who exercises direct control over a place of business required to obtain a sales tax permit shall be guilty of a serious misdemeanor under any of the following circumstances:
a.  If such person allows or permits the actual or simulated public performance of any sex act upon or in such place of business.
b.  If such person allows or permits the exposure of the genitals or buttocks or female breast of any person who acts as a waiter or waitress.
[c.  through f. contain more such circumstances]
2.  However, if such person allows or permits a minor to participate in any act included in subsection 1, paragraphs “a” through “d”, the person shall be guilty of an aggravated misdemeanor.
3.  Except for subsection 1, paragraph “f”, the provisions of this section shall not apply to a theater, concert hall, art center, museum, or similar establishment which is primarily devoted to the arts or theatrical performances and in which any of the circumstances contained in this section were permitted or allowed as part of such art exhibits or performances.
Iowa Code 728.11 is a “uniform application” (preemption) provision. It states:
In order to provide for the uniform application of the provisions of this chapter relating to obscene material applicable to minors within this state, it is intended that the sole and only regulation of obscene material shall be under the provisions of this chapter, and no municipality, county or other governmental unit within this state shall make any law, ordinance or regulation relating to the availability of obscene materials.  All such laws, ordinances or regulations shall be or become void, unenforceable and of no effect on January 1, 1978.  Nothing in this section shall restrict the zoning authority of cities and counties.
The Iowa Supreme Court looked to its previous cases construing these provisions and concluded that Hamburg’s ordinance is preempted by the Iowa Code.  In Chelsea Theater Corp v. Burlington the Court determined that chapter 728 was not limited to the dissemination of obscene materials to minors, but rather restricted local governments from enacting any local ordinances regulating obscene materials.  This led the Court to examine whether live nude dancing constituted “obscene materials” as the term is used in 728.11.  “Materials” is defined in 728.(3) as “any book, magazine, newspaper or other printed or written material or any picture, drawing, photograph, motion picture, or other pictorial representation or any statue or other figure, or any recording, transcription or mechanical, chemical or electrical reproduction or any other articles, equipment, machines or materials.”  “Obscene materials” is defined in 728.(5) as “any material depicting or describing the genitals, sex acts, masturbation, excretory functions or sadomasochistic abuse which the average person, taking the material as a whole and applying contemporary community standards with respect to what is suitable material for minors, would find appeals to the prurient interest and is patently offensive; and the material, taken as a whole, lacks serious literary, scientific, political or artistic value.” The Court looked to legislative history to conclude that the legislature intended to include live nude dancing within the meaning of obscene materials in the code.  As a result, Hamburg’s attempt to regulate live nude dancing through its licensing ordinance was preempted by chapter 728 of the Iowa Code.

The Court noted that, contrary to the City’s assertion, the last sentence of 728.11 only creates an exception to the preemption for local zoning authority, not for licensing or permitting authority.  “Accordingly, unless a local ordinance is a zoning ordinance it is preempted to the extent it regulates material regulated by chapter 728.”

Chief Justice Cady and Justice Waterman each filed separate dissenting opinions.  Chief Justice Cady took issue with the reasoning the majority followed to find that “obscene materials” included live nude dancing.  “In the judgement of the majority, ‘materials’ means a dancer to our legislature.  This conclusion not only defies common sense, it defies our accepted rules of [statutory] construction….Thus, for the majority to conclude it would be absurd for our legislature to have left nude dancing out of its preemption scheme is itself absurd.”

Justice Waterman joined in the preemption analysis of Justice Cady, and wrote further to express his opinion that not only is the Hamburg ordinance not preempted, it passes constitutional muster under well-settled precedent.

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Historic use and maintenance of established unpaved trail as public road

Gary Taylor

by Victoria Heldt

Clearwater County Board v. Terrance Bowman
(Minnesota Court of Appeals, May 21, 2012)

Mallard Grade is a 10-mile long, unpaved trail in Clearwater County.  It runs north from state highway 200 and was originally a railroad used to transport logs.  The rails were removed in 1913 and since then the trail has been “regularly used for logging, hunting and recreation by the public and for forestry management by the County.”  Terrance Bowman owns land that he purchased in 1996 that intersects Mallard Grade.  In 2009, Bowman erected a gate across Mallard Grade where it enters his property from the south.  Clearwater County requested, both formally and informally, that he remove the gate, but he refused.  The County brought this action to have Mallard Grade declared a public road and to prohibit Bowman from blocking it with a fence.

Minn. Stat. § 160.05 states “when any road or portion of a road has been used and kept in repair and worked for at least six years continuously as a public highway by a road authority, it shall be deemed dedicated to the public to the width of the actual use and be and remain, until lawfully vacated, a public highway whether it has ever been established as a public highway or not.”  The issues taken to district court were (1) whether Mallard Grade was used or worked for six continuous years and, if so, (2) the width of the road.

The County brought forth a team of several witnesses to describe the character and usage of Mallard Grade.  Bruce Cox, the County’s Land Commissioner, testified that the vegetation growth on either side of the trail show that the county had historically maintained the trail to a width of 18 feet and that it had provided “very little maintenance” to the trail.  Milo Fultz, a retired forester and road worker, testified that he installed culverts, trimmed vegetation, filled holes, bladed, and spread gravel over the trail annually for eight to ten years during the 1980s and 1990s.  He estimated the trail to be between 16 and 18 feet wide.  Nicholas Severson, another former forester, testified that he bladed Mallard Grade annually between 1990 and 2004 and that the trail was about 18 feet wide.

Gary Anderson, a township supervisor, stated he used Mallard Grade for logging operations since the 1970s until Bowman put up the gate in 2009.  Virgil Norquist, a property-owner near highway 200 since the mid-1930s, testified that the trail was about 18 feet wide in the 1970s and 1980s.  John Miller, another property-owner, testified that he began using the trail before 1945 to access hunting grounds and that it was best maintained during the 1980s when the logging operations were active.  Bowman testified, however, that the County had not maintained Mallard Grade since he purchased the property in 1996.  He further testified that the trail was only seven and one-half feet wide.

The district court found that Mallard Grade has been used by the public since at least the 1940s and that the County has maintained the trail for eight to ten consecutive years.  It determined the road to be 18 feet wide and to be a public road pursuant to section 160.05 of Minnesota statute.  Bowman appealed.

Bowman first challenged the court’s determination that the road had been kept in repair for at least six years as required by statute.  The Court looked to the extent of the maintenance how it compared to the requirements.  In a previous case brought under the same statute, it was determined that “the maintenance must be of a quality and character appropriate to an already existing public road.”  In Ravenna Twp. v. Grunseth, the Supreme Court ruled a road had not been properly maintained because the county had not installed ditches or culverts and had only graded and graveled the trail twice in 40 years.  In Leeper v. Hampton Hills, Inc., the Supreme Court concluded that a road had been properly maintained by installing culverts, grading and graveling the trail, and plowing the snow during the winter.  The Court noted that the maintenance performed on Mallard Grade was more like that done in the Leeper case than in the Ravenna Twp. case since several people testified to filling potholes, clearing brush, blading, and spreading gravel on the trail.  It determined the trail had indeed been properly maintained for at least six years.

Bowman next argued that the trial court erred in light of his testimony that he never saw any maintenance on Mallard Grade take place since 1996.  The Court concluded that his argument was flawed.  The trail was made into a public road before Bowman purchased his property in 1996 by the fact that the trail had been maintained since the 1980s according to the witnesses.  The road only needed to be maintained for six years from that time on to be considered a public road.

Bowman then challenged the district court’s finding that the road measures 18 feet wide.  The Court noted that a statutorily-dedicated road is established “to the width of the actual use” (Minn. Stat. §160.05, subd. 1).  and that the width of a road “is not limited to that portion of the road actually traveled; it may include the shoulders and ditches that are needed and have actually been used to support and maintain the traveled portion.”  The district court provided an exhibit describing the trail as 18 feet wide.  That conclusion was supported by the testimonies of Cox, Fultz, Severson, Norquist, and Anderson, who all testified about the historical use of the road.  The Court determined the district court’s findings were supported by the record.  It affirmed the decision.

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MN Court of Appeals affirms decision to allow 450-foot tower on edge of Boundary Waters

Gary Taylor

by Gary Taylor

State of Minnesota, by Friends of the Boundary Waters v. AT & T Mobility, LLC
(Minnesota Court of Appeals, June 18, 2012)

The Boundary Waters Canoe Area Wilderness (Boundary Waters) is a 1.1 million-acre wilderness area composed of federal and state lands in northeastern Minnesota. The Boundary Waters consists of 1,175 lakes, hundreds of miles of streams and rivers, and surrounding forested areas. It is the most heavily used wilderness area in the country and the only wilderness area that has an airspace reservation prohibiting flights below 4,000 feet. Visitors to the BWCAW value its scenic beauty and remoteness, as well as its lack of evidence of human existence. The Boundary Waters was one of the first federally designated wilderness areas, and it is protected by the federal Wilderness Act of 1964 and the Boundary Waters Act of 1978. The Minnesota legislature also protects the Boundary Waters by statute, recognizing that the it is an area “of surpassing scenic beauty and solitude, free from substantially all commercial activities and artificial development.”

Appellants AT&T Mobility LLC and American Tower Inc. applied for a conditional use permit (CUP) in Lake County, seeking permission to construct a wireless-communications tower. The tower will be approximately 1.5 miles outside of the border of the Boundary Waters.  It will be 450 feet high and have five sets of three guy wires. The tower will be lit with red or white blinking lights 24 hours a day to increase its visibility and comply with federal aviation requirements. The CUP application stated that the proposed tower is “deemed the optimum size tower to provide the most amount of coverage in this rural area with the least amount of visual impact.” The Lake County Planning Commission concluded that there is “a need for this tower for the health and safety of residents, tourists, and businesses.” Lake County approved appellants’ CUP application on July 20, 2009.  Friends of the Boundary Waters Wilderness (Friends) filed a complaint in Hennepin County District Court seeking a declaration that the proposed tower would violate the Minnesota Environmental Rights Act (MERA).  The district court enjoined construction of the proposed tower, determining that the proposed tower would materially adversely affect the scenic and esthetic resources in the Boundary Waters. The district court also determined that appellants failed to establish an affirmative defense under MERA. AT&T and American Tower appealed.

The Minnesota Court of Appeals reversed the district court.  In doing so it cited five factors from a previous case, Schaller v. Blue Earth County, for determining “whether conduct materially adversely affects or is likely to materially adversely affect the environment under MERA”:

(1) The quality and severity of any adverse effects of the proposed action on the natural resources affected; (2) Whether the natural resources affected are rare, unique, endangered, or have historical significance; (3) Whether the proposed action will have long-term adverse effects on natural resources, including whether the affected resources are easily replaceable (for example, by replanting trees or restocking fish); (4) Whether the proposed action will have significant consequential effects on other natural resources (for example, whether wildlife will be lost if its habitat is impaired or destroyed); and (5) Whether the affected natural resources are significantly increasing or decreasing in number, considering the direct and consequential impact of the proposed action.

The Court of Appeals concluded that the district court committed legal error by failing to weigh and analyze the relative severity of the adverse effect of the proposed tower on scenic views in the Boundary Waters under the first factor.    The Court of Appeals noted that the district court’s factual findings established that less than fifty percent of the proposed tower will be visible from less than one percent of the BWCAW’s 1,175 lakes, several of which have scenic views that include signs of human existence already.  According to the Court of Appeals, the district court failed to analyze whether this met the “severe” threshhold of the first factor.

The Court of Appeals also found fault with the district court’s conclusions on the third, fourth and fifth factors. As for the third factor (long-term-adverse-effects factor) “…removal of the proposed tower, which would be located outside of the BWCAW, would immediately eliminate any adverse effect on scenic views in the Boundary Waters, thereby restoring the affected resource to its original condition.”  The district court’s finding with regard to the fourth factor (significant consequential effects on other natural resources factor), that it was “not possible . . . to confidently quantify how many of which species of [migratory] birds will be killed by the [p]roposed [t]ower,” was not sufficient to sustain the conclusion that this factor weighs against the tower. Finally, under the fifth factor (increasing or decreasing of the affected natural resources), although the district court found that scenic views “from the lakes and rivers in the [Boundary Waters] where there are no lasting signs of human impact, are limited and finite resources” and that “[t]hey are not increasing and unless protected they will decrease over time,” The Court of Appeals found the district court in err because it did not “address whether the potential decrease in scenic views is significant.”  Thus, only the second factor (rareness-and-uniqueness factor) weighs strongly against construction of the proposed tower.  Even though the rareness-and-uniqueness factor is compelling, and “each factor need not be met in order to find a materially adverse effect,” the Court of Appeals held that the district court’s factual findings and legal analysis did not sustain its legal conclusion that respondent proved a prima facie case of a materially adverse effect on the scenic and esthetic resources in the Boundary Waters. Because respondent failed to establish a prima facie case for judicial intervention under MERA, The Court of Appeals reversed the district court’s order enjoining construction of the proposed tower without addressing appellants’ other arguments in support of reversal.

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Filling sinkhole not an allowable activity under TNC conservation easement

Gary Taylor

by Victoria Heldt

The Nature Conservancy v. Larry and Marsha K. Sims
(United States Sixth Circuit Court of Appeals, May 21, 2012)

In December 2001 the Sims purchased a 100-acre farm from The Nature Conservancy, Inc. (TNC) in Kentucky.  The real estate agreement included an easement to “assure that the Protected Property will be retained forever substantially undisturbed in its natural condition and to prevent any use…that will significantly impair or interfere with the Conservation Values of the Protected Property.”  The easement also conveyed to the TNC a right to inspect the property annually to ensure the Sims comply with the easement.  Without the easement, the property was appraised at $260,400 and with the easement it was appraised at $60,000.  The Sims paid $60,084 for the property in addition to a $244,939 tax-deductible charitable gift to TNC.

The property consisted of two sections, one being a residential/agricultural area to be used for the Sims’ residence and for commercial agricultural uses.  The remaining portion of the land, known as Henslow Sparrow, was to be used only for grazing livestock and producing hay.  A detailed description of the condition of the property was included in the agreement.  In January 2005 TNC inspected the property and found several instances of non-compliance with the easement.  One such non-compliance was the fact that the Sims altered the topography on the property by excavating and re-grading a sinkhole behind their residence.  This action violated Section 2.5 of the easement.  The remaining instances of non-compliance were remedied by the Sims and the allegations dropped.

TNC’s expert geologist was permitted to survey the sinkhole and determine the contours of the ground before the sinkhole was filled.  The district court granted summary judgment in favor of the Conservancy, determining that the Sims did indeed violate the easement.  It noted that, although the Sims were allowed to make some changes to the property in relation to authorized activities, filling a sinkhole with an estimated 6,269 cubic yards of soil was not one of them.  In a later judgment, the court awarded the Conservancy $77,337.50 in attorneys’ fees and $18,9902.33 in expenses.  Upon examination of the hours billed to TNC, the court subsequently reduced the amount awarded to TNC by $11,774.  The Sims appealed both judgments.

In regards to the violation of the easement, the Court ruled that the district court was correct in determining that the Sims were in violation.  Section 2.5 of the easement  states “there shall be no ditching; draining; diking; filling; excavating; removal of topsoil, sand, gravel, rock, or other materials; or any change in the topography of the land in any manner except in conjunction with activities otherwise specifically authorized herein.”  Filling the sinkhole clearly violated this condition.

The Sims argued that they are allowed to “enhance their agricultural usage” of the land under Section 3.2 of the easement and in filling the sinkhole they were improving the farming process.  Furthermore, they pointed to the phrase within Section 2.5 that allowed for altering the land “in conjunction with activities otherwise specifically authorized herein” in support of their argument.  They asserted that farming is an authorized activity and thus they are allowed to fill the sinkhole to improve the agricultural use.  The Court rejected this argument, stating that filling is not a normal precursor to farming activities.  In addition, “filling” is strictly prohibited within Section 2.5.

Next, the Sims argued that Section 3.7 gives them the right to “dig wells” and “create ponds” and they should therefore be allowed to place the excavated dirt in a sinkhole on their land.  The Court dismissed this argument as unreasonable since it would allow the Sims to breach one provision of the easement in order to enjoy another.  The Sims further argued that the status of the depression as a “sinkhole” was not disclosed to them before they filled.  Regardless, the Court noted that “filling” is explicitly forbidden.  The Sims claimed they would not have built their residence so close to the sinkhole had they known they weren’t allowed to fill it.  The Court determined it was the builder’s task to recognize limitations of the property in regards to the construction of a home.

Finally, the Sims challenged the reasonableness of the amount of damages awarded to TNC.  The Court noted that the district court took into account all the necessary factors in determining the amount awarded.  It carefully examined the record of hours billed and the breakdown of the hours in its decision-making process.  The Court determined the award to be reasonable.  It affirmed the district court’s decision on both judgments.

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Scope of property listed on National Register of Historic Places a matter of city council discretion

Gary Taylor

by Victoria Heldt

Relators v. City of Dundas, Rejoice! Lutheran Church
(Minnesota Court of Appeals, May 7, 2012)

The Church of the Holy Cross, located in the City of Dundas, is listed on the National Register of Historic Places.  It is described by the Minnesota Historical Society as a “gothic church of locally quarried stone built in 1868.”  In 1964 a parish hall was added to the church and in 1998 a handicapped entry was added to the parish hall.  The church was added to the Register in 1982 after the construction of the parish hall addition.  The application for inclusion of the church on the Register included the statement:  ““The parish hall attached to the south side of the vestry was added in 1964; the similarity in materials and scale make it a sympathetic addition to the building.”  The listing of the property in the Register is simply “Church of the Holy Cross (Episcopal).”  Rejoice! Lutheran Church purchased the Church of the Holy Cross in 2010 with plans to build “a worship and office facility while preserving the historic stone sanctuary and adjacent cemetery.”  The additional office, worship, and classroom space totaled just less than 12,000 square feet.

In August 2010 the church applied for a conditional use permit (CUP) in order to move forward with its plan.  It received the permit, but residents raised the question of whether an environmental assessment worksheet (EAW) was necessary to begin the construction.  John McCarthy, the city zoning administrator, determined no EAW was necessary.  A petition was started to request an EAW be completed and garnered 32 signatures.  The Environmental Quality Board (EQB) determined that the city was the appropriate governing body to make a decision regarding the need for an EAW.  McCarthy responded to the EQB that no decision could be made on the matter until the church filed for a building permit, which it did a few months later.

The requirements stating when an EAW is necessary are found within a body of rules pursuant to the Minnesota Environmental Policy Act (MEPA).  The rules state that an EAW is required for the “destruction, in whole or in part, or the moving of a property that is listed on the National Register of Historic Places.”  In preparation for the hearing, members of the City staff prepared a report for the city council concluding that an EAW was not required.   The city council then received input from Jonathan Reppe (attorney for Dundas residents) who asserted that the property listed on the Register included the parish hall, which was to undergo destruction.  He cited Linda Pate, a preservation specialist from the Historic Preservation Office, who shared that view.

The council also heard from John Klockeman, a member of the Rejoice! building-team committee and a licensed architect, who asserted that the project would not result in the destruction of any of the property listed on the Register.  He argued that the only modifications to be made were the removal of the handicapped entrance that was constructed in 1998 and the removal of some limestone from the parish hall to be used elsewhere in construction.  At the hearing, the council determined that no EAW was necessary since the project would not result in any “destruction, in whole or in part, of a property that is listed on the National Register of Historic Places.”

On appeal, the Court was to determine whether the city council’s decision was arbitrary or capricious, made under an erroneous theory of law, or unsupported by the evidence.  It had to decide whether the council “has taken a ‘hard look’ at the salient problems and has genuinely engaged in reasoned decision-making.”  Upon examining the record, the Court noted that the city council did indeed take the required “hard look” at the situation.  It received input from opponents and proponents, received advice from city staff and legal counsel, and heard comments from the public.  The relators argued that the decision was improper as a matter of law because the property is listed on the Register and will undergo partial destruction; however, the Court noted that “relators point to no authority suggesting that the determination of the scope of the property listed on the
Register is a legal determination, much less that the city erred in making that determination.”  Noting again that the scope of judicial review is simply whether the council “engaged in reasoned decision-making” it affirmed the city council’s decision.

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Lakeway easement interpreted as providing access, not a park

Gary Taylor

by Victoria Heldt

Bedford, et. al., v. Joan Yvonne Rogers, Joan Yvonne Rogers Trust
(Michigan Court of Appeals, April 17, 2012)

The long list of plaintiffs in this case is comprised of property owners within the Glen Eyrie subdivision located on Crystal Lake.  The plat (recorded in 1920) and the parties’ deeds established a 100-foot wide strip of land designated as the “lakeway” between the plaintiffs’ property and the edge of Crystal Lake.  The lots do not extend all the way to the water.  The lakeway was to be “dedicated to the common use of property owners in Glen Eyrie plat.”  Sometime after 1920, Crystal Lake Drive was constructed parallel to, and partially within, the lakeway.  Surveys done in 2001 and 2010 indicated that the border separating the property owners’ lots and the lakeway is located near the center line of Crystal Lake Drive.

Historically, some of the property owners built boathouses or storage units in the lakeway.  When Rogers purchased her lot in 1987 a 20 x 28-foot boathouse was built in the lakeway in front of her property.  In September 2009 she applied to the township for a permit to build a new 28 x 34-foot boathouse to replace the existing one.  The township granted the permit and Rogers began construction in October 2009.  The new “boathouse” was to include running water, heat, toilet facilities, a kitchenette, a workshop, and a second floor cupola.

As Rogers’ construction was in its early stages, the plaintiffs wrote a letter through an attorney asking Rogers to cease construction since the lakeway was reserved for the common use of property owners.  Rogers refused to stop the construction.  In December 2009 the Lake Township Zoning Administrator wrote her a letter stating the building violated the township’s zoning ordinance since it “includes substantial space designated by the Building Department as living quarters” and issued a stop work order.  Rogers appealed the administrator’s opinion and, in April 2010, the Board of Appeals voted that the boathouse constructed should be “allowed as a compatible non-commercial recreational facility.”  The Board did place certain conditions on the property that included the removal of certain residential features (e.g. a tub, shower, and certain fixed kitchen appliances).

In trial court, the plaintiffs filed a request for summary disposition citing trespass and nuisance.  They argued that the plat dedication granted property owners an “irrevocable easement over the lakeway property and prevented defendant from exclusively using the portion of the lakeway in front of her lot by constructing a new structure that expanded the footprint of the old boathouse.”  Rogers also filed for summary disposition, arguing she owned the portion of the lakeway in front of her property and had the right to make use of it.  The court noted that a tacit agreement existed among land owners that 100% of the lakeway was not dedicated for common use since most property owners built boathouses for personal use.  History supported that claim since most of the structures had existed for over 40 years.  The court acknowledged that the expansion of this boathouse by several feet would not further prevent other land owners from using and enjoying the lakeway.  It determined the expansion should be allowed.

On appeal the Court of Appeals first noted that a use under a plat dedication must be within the scope of the dedication and must not interfere with the owners’ use and enjoyment of the property.  In this case, the plaintiffs interpreted the plat dedication to create a park for common use by the lot owners.  This Court of Appeals disagreed.  The dedication stated that “the drive, court, spring road and lakeway” were dedicated for common use.  When interpreting language like this, it is in accordance with precedent to treat word groups in a list as having related meanings.  The drive, court, and spring road are all used as right-of-ways (access) for lot owners to travel to, from, and within the plat, not as a park (which implied open space without obstructions).  The Court stated that the lakeway is to be considered similar; i.e., as a right-of-way.  The Court further noted that the term “lakeway” suggests it should be used as a right-of-way rather than a park (since the word “way” is found within the term.)

Subsequently, the Court determined that “the scope of the dedication created an easement within the lakeway for common use of lot owners of the land as a right-of-way that allows lot owners to use the lakeway in the same manner as the drive, court, and spring road.”  Since Crystal Drive, which runs through the lakeway, satisfies the purpose of a right-of-way providing access, there is no need to prohibit obstructions such as boathouses from the lakeway.   The Court determined that the slightly larger boathouse would not prevent residents from using and enjoying the lakeway for its purpose as right-of-way any more so than the previous boathouse did.  Thus, it affirmed the trial court’s decision.

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Under Pontiac (MI) zoning, proposed use is a permitted outpatient clinic, not a crisis center

Gary Taylor

by Victoria Heldt

Common Ground v. City of Pontiac, Pontiac Planning Commission, Pontiac City Council
(Michigan Court of Appeals, May 3, 2012)

Common Ground owns a piece of land in the City of Pontiac on which it wanted to develop administrative offices and provide mental health services.  Catering to children, youth, and families in crisis, the services provided would include psychiatric screening, referrals, and outpatient counseling.  The land in question is zoned C-2, Central Business District.  This zoning classification allows for, among other things, “physical culture and health services.”  Property zoned C-2 also allows for any uses that are permitted in C-1 zones, which includes “medical clinics (outpatient only) and offices of doctors…and similar or allied professionals.”

Common Ground’s application was presented to the Pontiac Planning Commission at four separate meetings throughout 2008.  Provided with the application were reports from Madhu Oberoi (the city’s planning administrator) and David Breneau (City Planner) that stated the intended mental health center was a permitted use under the C-2 zoning district.  The planning commission also received complaints about the proposal on the grounds that it was not consistent with plans for the redevelopment of downtown Pontiac.  Pontiac’s Downtown Development Authority (DDA) opposed the proposal because it believed downtown Pontiac was “oversaturated…with mental health care facilities.”

Subsequently, the planning commission held a closed meeting with an outside attorney.  It received a legal opinion stating Common Ground’s proposed facility was considered a “crisis center” that was not a permitted use under C-2 zoning.  In September 2008, the commission voted against the proposal without articulating in the minutes of the meeting an explanation for the vote or the findings of the commission.  About a week later Oberoi, who was not a member of the planning commission, wrote a letter detailing the reasons for the plan’s denial.  Among the reasons was that Common Ground’s proposed use was not a stated use within C-1 or C-2 districts and that the development would not be compatible with the surrounding neighborhood.  Common Ground appealed the decision to the city council, which affirmed the denial.

The circuit court ruled that the planning commission’s decision was procedurally defective since it did not articulate its reasons for denial as required by statute.  It also determined that the proposed site was within the “permitted principle uses” of C-2 districts, so the commission should not have denied the application on that basis.  It noted the proposed facility was clearly an outpatient clinic and constituted a “physical culture and health services” facility regardless of the fact that the commission labeled it a “crisis center.”  It remanded the case to the planning commission for reevaluation.

On remand, the planning commission acknowledged that Common Ground’s proposed use was permitted under the zoning district.  It found, however, that any facility where patients stay longer than 18 hours, are admitted against their will, or restrained is contrary to the goal of district C-2 zoning development as it does not attract “heavy pedestrian activity” or enhance the “economic welfare” of the area.  It further found that an ambulance bay is not a permitted accessory to clinics in C-2 districts.  It conditionally approved Common Grounds proposal so long as its exterior was modified to comply with the design guidelines in the area and it did not contain any residential quarters or detention areas.  It further prohibited any patients from being brought to the clinic restrained, against their will, or in an ambulance vehicle.    Common Ground appealed the commission’s restrictions, arguing the circuit court already declared the facility was a permitted use and that the restrictions the commission identified lie outside the governing scope of the Zoning Ordinance.  It claimed the few instances of restraint and the use of ambulances are ancillary to the principal use.  The Pontiac City Council again ruled in favor of the planning commission and affirmed the conditions placed on Common Ground’s development.

Common Ground brought the matter back to circuit court.  It objected to the exterior design stipulation because the ruling did not identify how to comply with the current building design standards and because it claimed the DDA Design Committee did not have the authority to dictate such matters.  Common Ground challenged the conditions regarding patient detention and ambulance transportation on the grounds that the relevant Zoning Ordinance only pertained to “physical characteristics of the building exterior and site” and not to activities and use of the site.  This time around, the trial court determined that an ambulance bay should be permitted because it was included in the application from the start and therefore falls within the permitted use.  It also stated Common Ground should be allowed to have a detention center for similar reasons, but maintained the prohibition of residential quarters.

On appeal, the City argued the circuit court erred when it determined Common Ground’s proposal was a permitted use.  The Court disagreed.  It noted that the zoning district clearly allows “medical clinics (outpatient only) and offices of doctors…and similar or allied professionals” and “health services.”  The City failed to show that a “crisis center” is anything other than a form of outpatient mental health clinic.  Furthermore, the Court ruled that the circuit court did not err when it found the planning commission’s ruling procedurally defective.  The zoning ordinance clearly states that the commission is required to articulate its reasoning and findings when making a decision regarding a permit.  The City’s last argument was that the conditions regarding the detention center and the ambulance bay do not comply with the district’s zoning goals because it does not attract pedestrians and enhance the economic welfare of the area.  In support of this argument, it asserted the city’s police powers authorized the commission to place conditions upon the site plan.  The Court noted that no other legal authority was cited and the argument was insufficient.  It affirmed the circuit court’s ruling.

Minnesota courts , ,
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Demolition not necessary to correct hazards posed by two historic Detroit structures

Gary Taylor

by Victoria Heldt

City of Grosse Pointe Park v. Detroit Historic District Commission
(Michigan Court of Appeals, April 19, 2012)

The City of Grosse Pointe Park (the City) wanted to demolish two buildings it owns on East Jefferson Street in Detroit – immediately adjacent to the City – to possibly construct a bus turnaround loop on the property.  One building was built in 1918 and the other in 1920.  In April 2007 the City applied to the Detroit Building Safety and Engineering Department (BS&E Department) for a permit to tear down the buildings, which it received.  Three days later, the BS&E Department issued a “stop work” order.  Since the properties are in a main street overlay area, the Detroit Planning and Development Department needed to sign off on the demolition and construction plans to ensure that it was “consistent with the design standards of the subdivision.”

In May 2007 the Jefferson Avenue Business Association asked the Detroit City council to establish the area as an interim historic district, which it agreed to.  The Historic Designation Advisory Board was ordered to study whether the property qualified for historic-designation status and the Detroit Historic District Commission (DHD commission) was to review the demolition and building permit applications within the scope of the Local Historic Districts Act (LHDA).

During April 2008 the City applied to the DHD commission for permission to demolish the buildings, noting that statue allows demolition where public safety is an issue.  It provided an affidavit from Ronald Supal, a building inspector, in which he stated the properties were “dangerous to human life and public welfare” and recommended they be demolished.  Jack Durbin, a professional engineer, also submitted a report recommending the buildings be razed.  Susan McBride, a staff member of the DHD commission, submitted a report noting that the City had never stated the cost of rehabilitating the building and argued the building should remain due to its historical and architectural value.  She claimed it is “one of the few remaining commercial districts that reflect commercial architecture and suburban development on the east side of Detroit during the 1920’s.”  At a public hearing, the DHD commission denied the application because it did not meet the United States Secretary of Interior’s standards for rehabilitation.

Soon after the hearing, the city council passed an ordinance that established the Jefferson-Chalmers Historic Business District, which included the buildings in question.  In July 2008 the City filed an appeal to the review board challenging the DHD commission’s denial.  It argued that the DHD commission’s decision was arbitrary and capricious since the buildings were only an interim historic district when the application was denied.

In July 2009 the review board affirmed the DHD commission’s denial to demolish.  It noted the level of expertise present in the DHD commission and its authority to decide these matters.  It also found that the opinions the City provided from Supal and Durbin failed to establish that the buildings were a public hazard.  The board took issue with Durbin’s report because it lacked specific facts to support the conclusion.  It further found that the City “failed to establish that demolition was necessary to improve or correct any problematic condition.”  The City appealed in circuit court, which affirmed the review board’s decision.

On appeal, the City claimed that the circuit court misapplied the substantial-evidence test.  The Court disagreed.  It noted that the evidence the City presented was unconvincing.  The pictures provided in Supal’s report showed the deterioration in the buildings was “far less severe than is seen in many buildings which are routinely rehabilitated in Detroit.”  The City argued that buildings needed to be demolished because they did not meet current safety codes.  This claim was not sufficient because code compliance is the most common reason for buildings to be rehabilitated.  It further noted that, even if the buildings were shown to be a hazard to public safety, the City would have needed to prove that the proposed work (demolition) was “necessary to substantially improve or correct” the situation.  The evidence did no such thing.  Rehabilitation, too, could substantially improve or correct the situation. The Court concluded that the review board’s decision to deny the demolition request was reasonable and supported by the evidence.

The City’s last argument was that, according to statute, it was not required to prove the buildings posed an immediate or imminent hazard to the public.  The Court admitted that the words “immediate” and “imminent” are not necessarily contained in the governing statute, but that the specific wording in this case is a minor issue.  The statute clearly provides that an applicant must prove a building is a hazard to the safety of the public.  Additionally, the circuit court did not rule that the building did not constitute an immediate or imminent hazard, but rather that the evidence failed to convince the review board that demolition was necessary.  The Court affirmed the circuit court’s decision.

Abandoned/unsafe buildings, Historic preservation , ,
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Non-profit association has standing to challenge major North Dakota coal gasification facility; loses on merits

Gary Taylor

by Gary Taylor

Dakota Resource Council, et al. v. Stark County Board of County Commissioners
(North Dakota Supreme Court, June 7, 2012)

Great Northern planned to construct and operate a coal gasification facility on 8,100 acres of land in Stark County. Great Northern’s planned complex would include a coal gasification plant, chemical fertilizer plant, electrical power plant, coal mine, solid waste landfill, and facilities for manufacture and storage of hazardous, explosive, and odorous products. Great Northern submitted an application to the Stark County Zoning Commission (Commission) to change the zoning of the land from agricultural to industrial and to allow nine conditional uses of the land, including “[m]ineral and other substance exploration or excavation and mining [in] accordance with provisions of Sec. 6.10” of the Stark County Zoning Ordinance. The Commission scheduled a hearing and sent notice by certified mail to all persons who owned land within 200 feet of the boundaries of the proposed rezoned tract. Following the hearing, the Commission voted to recommend that the County Board of Supervisors (Board) approve the application, conditioned upon Great Northern obtaining all necessary local, state, and federal permits or approvals. The Board subsequently approved the application to rezone the property from agricultural to industrial and approved the requested conditional uses. The Board’s approval was subject to several express conditions, including a requirement that Great Northern “obtain all the necessary local, state and federal approvals, licenses and permits relative to the operation of the coal mine.”

The Dakota Resource Council (Council) is a membership-based non-profit corporation which, among other things, works for preservation of family farms, regulation of coal mining and oil and gas development, protection of ground water and clean air, and sound management of solid and toxic wastes. Neighbors United is an unincorporated association which promotes the protection of farming and ranching. The Council, Neighbors United, and several individuals who owned land near the rezoned tract appealed the Board’s decision to the district court. The district court initially determined that the Council, Neighbors United, and the individual landowners had standing to challenge the Board’s decision, but the district court affirmed on the merits the Board’s decision to rezone the property and allow the conditional uses.

The Council, Neighbors United, and landowners appealed.  The Board and Great Northern cross-appealed, arguing that the Council lacked standing to appeal the Board’s decision to the district court.

Standing.  The North Dakota Supreme Court noted at the outset that “standing is the concept used to determine if a party is sufficiently affected so as to insure that a justiciable controversy is presented to the court.”  A not-for-profit association such as the Council that has not suffered an injury itself must satisfy a three-pronged test to demonstrate standing: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. In addition, a nonprofit membership corporation has standing to seek judicial review on behalf of its members, of governmental or municipal regulations directly affecting such members.  The Board and Great Northern challenged the Council’s standing only on the first prong of the test.  The Court affirmed the district court’s conclusion that the Council had standing in this case, at the same time acknowledging that it presented a “close question.” The Stark County Zoning Ordinance requires that, when a proposed amendment to the Zoning Ordinance and Map affects a property use, all property owners within 200 feet of the affected property must be notified of the hearing by personal service or certified or registered mail. In this case, the record demonstrated that at least two individuals identified as Council members received notice of the scheduled hearing from Stark County by certified mail because they owned property within 200 feet of the proposed rezoned tract.  The Court saw the notice requirement “effectively [as] a legislative determination that landowners within 200 feet of the proposed rezoned property have a significant, protectable interest in the Board’s decision whether to grant an application to rezone the property and permit requested conditional uses.  The notice requirement established that Kenneth Kudrna and Randall Kudrna’s property interests were affected by the Board’s decision in a manner different than that suffered by the public generally, and they were more than just an elector and resident taxpayer affected by the decision….We do not believe it can be seriously argued that an 8,100 acre industrial complex, including a coal gasification plant, chemical fertilizer plant, electrical power plant, coal mine, solid waste landfill, and facilities for manufacture and storage of hazardous, explosive, and odorous products, would not adversely affect the Kudrnas’ use and enjoyment of their respective properties located within 200 feet of the proposed complex.”

Rezoning decision.  The Council contended that the Board failed to correctly interpret and apply the Stark County Zoning Ordinance. The Court began this analysis by noting that although interpretation of an ordinance presents a question of law fully reviewable on appeal, the interpretation of a zoning ordinance by a governmental entity is a quasi-judicial act, and a reviewing court should give deference to the judgment and interpretation of the governing body rather than substitute its judgment for that of the enacting body.  The Council argued that Great Northern was required by the ordinance to submit all application materials necessary to apply for a land disturbance permit.  The Board disagreed.  The Court disagreed, as well.  The Board, construing its Zoning Ordinance in light of the facts presented in this case, concluded that the Zoning Ordinance allowed the Board to issue a conditional use permit for mining operations, subject to the requirement that Great Northern ultimately comply with another section of the ordinance and obtain a land disturbance permit before commencing any exploration, excavation, or mining activities on the property.  The Board viewed the granting of the conditional use permit as merely the first step in a lengthy and complex process, and its approval of the conditional use was contingent upon Great Northern complying with all of the enumerated special conditions imposed upon the conditional use permit.  The Court concluded that “this is a reasonable interpretation of the Zoning Ordinance, and we give deference to the Board’s interpretation and will not substitute our judgment for that of the Board.”

The district court decision was affirmed in all respects.

Conditional Uses/Special Uses, North Dakota courts, Rezoning, standing , , , ,
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Conditional use permit requirement did not constitute a taking

Gary Taylor

by Victoria Heldt

Peter J. Butzen, D/B/A Falls Metals, Inc. v. City of Sheboygan Falls
(Wisconsin Court of Appeals, February 29, 2012)

Peter J. Butzen owns a piece of property within the City of Sheboygan Falls that is zoned C2 commercial.  He operated a scrap metal recycling business on the land during the 1990s which grew in size to the point that it appeared to be a junkyard.  In January 2000 the City decided the use of the land exceeded the scope of what was permitted in the C2 district.  It advised Butzen to clean up and make some modifications and apply for a conditional use permit, which Butzen did in February.  In April 2000 (before it considered Butzen’s application) the City amended the ordinance under which Butzen applied with Ordinance 11.  This ordinance eliminated all permitted uses in C2 zoning districts unless the owner received a conditional use permit.  The City advised Butzen that if he performed the specified cleanup actions, the committee would recommend his permit application be granted.  Butzen was given several deadlines through 2001 to complete the cleanup, but never completed the actions.

In November 2007 Butzen filed for a conditional use permit but was denied since the application was incomplete.  In July 2008 the Supreme Court decided Town of Rhine v. Bizzell in which it concluded that a zoning provision such as Sheboygan Falls’ Ordinance No. 11 is unconstitutional on its face if it precludes any use as of right in a zoning district and if the limitation bears no substantial relation to the public health, safety, morals or general welfare.  In response, the Sheboygan Falls passed a moratorium on development in its C1, C2, and C3 zoning districts to prevent any further development until it decided how to move forward after the Town of Rhine ruling.

Butzen continued to use his property and filed a complaint seeking a judicial determination regarding the constitutionality of Ordinance 11 and questioning the validity of the City’s moratorium.  The circuit court, following the lead of the Supreme Court in the Town of Rhine case, declared Ordinance 11 to be unconstitutional.  It did, however, uphold the validity of the moratorium.  Butzen filed an inverse condemnation complaint asserting that the City’s actions amounted to a taking of his property.  He also raised a substantive due process claim under 42 U.S.C. §1983 that the City’s efforts to enforce the ordinance violations were arbitrary and capricious.  The circuit court found that he did not sufficiently establish either of the claims and that they were barred by a statute of limitations.  This appeal followed.

On appeal, Butzen focused only on the “takings” claim.  He asserted that “because of the Town of Rhine ruling, Ordinance No. 11 unconstitutionally eliminated all use of his C2-zoned property without a conditional use permit, resulting in a regulatory taking.”  According to statute, a regulatory taking occurs when a regulation denies a landowner all or substantially all practical uses of his or her property.  The Court noted that Butzen overlooked two key findings within the circuit court’s rulings.  First, the denial of Butzen’s permit was based on the ordinance in effect prior to Ordinance 11, so the determination of Ordinance 11 as unconstitutional was not relevant to his claimed injury.  Second, the fact that Butzen needed a conditional use permit to run the scrap metal shop did not deprive him of “substantially all” beneficial uses of the property since he could still conduct other business there.  The Court concluded Butzen did not sufficiently show that a regulatory taking occurred and affirmed the circuit court’s decision.

Conditional Uses/Special Uses, Junkyards, Takings, Wisconsin courts , , ,
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