Iowa Supreme Court Rules that Cities May Take Possession of Abandoned Properties

Cby Eric Christianson

Eagle Grove v. Cahalan Investments
(Iowa Supreme Court, December 1, 2017)

Cahalan Investments purchased two residential properties in the City of Eagle Grove, one in 2002 and the other in 2011. Both properties have remained unoccupied and in deteriorating condition since their purchase. The properties were the subject of multiple complaints by neighbors and were found to be unfit for human occupancy.  In 2014 the city began an effort to clean up a number of nuisance properties, these properties were among those targeted. The city sent several letters to Cahalan advising them that they were in violation of the city’s nuisance ordinance. Cahalan made no effort to abate the nuisance and would later testify that they had no intention of making either property habitable in the foreseeable future

Iowa Code section 657A.10A allows cities to petition a district court to transfer ownership of abandoned properties to the city. The code details the following criteria that a court is to use when determining if a property has been abandoned.

a. Whether any property taxes or special assessments on the property were delinquent at the time the petition was filed.
b. Whether any utilities are currently being provided to the property.
c. Whether the building is unoccupied by the owner or lessees or licensees of the owner.
d. Whether the building meets the city’s housing code for being fit for human habitation, occupancy, or use.
e. Whether the building is exposed to the elements such that deterioration of the building is occurring.
f. Whether the building is boarded up.
g. Past efforts to rehabilitate the building and grounds.
h. The presence of vermin, accumulation of debris, and uncut vegetation.
i. The effort expended by the petitioning city to maintain the building and grounds.
j. Past and current compliance with orders of the local housing official.
k. Any other evidence the court deems relevant.

The code then states that if the court finds the property is abandoned, “the court shall enter judgment awarding title to the city.” In this case, the district court found that Cahalan’s properties were indeed abandoned under the definition set forth in the statute. In fact Cahalan Investments does not dispute this finding; however, Cahalan argued that awarding ownership of these properties to the city without compensation violated the takings clause of the US Constitution. In this case, the district court found Cahalan Investment’s argument convincing and did not award title to the City of Eagle Grove.

The City of Eagle Grove appealed the district court’s decision to the Iowa Supreme Court.

The Iowa Supreme Court revisited the question of whether awarding ownership to a city under Iowa Code section 657A.10 is constitutional.

Proving that a section of state code is unconstitutional is not easy. The court quotes an earlier decision stating that, “statutes are cloaked with a presumption of constitutionality. The challenger bears a heavy burden, because it must prove the unconstitutionality beyond a reasonable doubt.”

Takings jurisprudence is based primarily on the takings clause of the Fifth Amendment which states that, “private property [shall not] be taken for public use, without just compensation.” To determine if a governmental action has violated the takings clause, the court uses the following framework:

(1) Is there a constitutionally protected private property interest at stake? (2) Has this private property interest been “taken” by the government for public use? and (3) If the protected property interest has been taken, has just compensation been paid to the owner?

In this case, Cahalan’s case fails on the first question. The court cites an earlier ruling which states that “the State has the power to condition the permanent retention of [those] property right[s] on the performance of reasonable conditions that indicate a present intention to retain the interest[s].” Ownership of property comes with many rights, but is not absolute. Here the court is saying that in Iowa a property owner’s rights do not include allowing properties to remain abandoned. By doing so here, Cahalan has forfeited their rights.

By allowing the properties to persist in a condition unfit for human habitation, allowing the properties to remain vacant, and failing to make timely and reasonable efforts to remedy the public nuisances created by the properties after notification of the problems, Cahalan did not comply with the section 657A.10A(3) criteria. Thus it failed to “indicate a present intention to retain the interest.” See id. at 526, 102 S. Ct. at 790. We conclude the district court erred in concluding Cahalan holds a constitutionally protected private property interest in the abandoned properties for which just compensation is owed.

Finding that Cahalan Investment’s stake in the properties was not a constitutionally protected right is enough to decide the case, but for completeness the court did examine the second question as well.

Assuming that Cahalan did have a constitutionally protected private property right the court still found that takings jurisprudence supports the city’s actions. A taking occurs when the government denies a property owner “all economically beneficial or productive use” of property. In this case there is no dispute that Cahalan Investments has been deprived of all use of these two properties. Generally when that occurs, the government is required to pay just compensation. However, there is a public nuisance exception in takings jurisprudence. The state has the “power to abate nuisances that affect the public generally, or otherwise,” and this action, “is not a constitutional taking for which compensation is required.”

The court also examined whether the fact that Cahalan Investments purchased these properties before the enactment of this particular section of 657A would prevent it from being applied in this case. Here the court found that the state’s existing legislation as well as the principles of nuisance law already in place at the time of purchase were sufficient to hold that Cahalan never possessed the right to maintain properties in an abandoned state.

The Iowa Supreme Court reversed the finding of the district court that the city’s exercise of 657A constituted an unconstitutional taking and remanded the case back to district court.

Awarding title to city under abandonment statute not an unconstitutional taking

by Gary Taylor

Nicol and Street v. City of Monroe
Iowa Court of Appeals, May 3, 2017

Nicol and Street took title to property in Monroe, Iowa by warranty deed in 2013.  Beginning in May 2013, and over the two years that followed, the city sent them five letters regarding their failure to maintain the property.  Nicol and Street failed to take action, and so in April 2015 the city filed municipal infractions against the couple for several violations regarding junk, vehicles, and garbage on the property.  After a hearing in August 2015 the court entered judgments assessing civil penalties, and ordering them to fully abate the violations.  They did not do so.  Additionally, they failed to pay property taxes since purchasing the property, and utilities were not turned on at the property after June 2015.

In January 2016 the city petitioned for title to the property, alleging it was abandoned under Iowa Code 657A.10A.  Nicol and Street moved for dismissal, alleging that the statute is an unconstitutional taking of private property for a public purpose without just compensation.  The court denied the motion, and found at the end of a bench trial that the property met the definition of “abandoned” under the statute.  It entered an order awarding title to the city, and the couple appealed.

Statutes are presumed to be constitutional, and to prove otherwise a petitioner must “negate every reasonable basis upon which the statute could be upheld as constitutional.”  In determining whether the statute is reasonable, courts consider “such things as the nature of the menace against which it will protect, the availability and effectiveness of other less drastic protective steps, and the loss which appellants will suffer from the imposition of the ordinance.”

The Court of Appeals reviewed the procedural safeguards incorporated into 657A.10A, including that the city cannot act less than 60 days from the filing of the petition and must show that the owner did not make a good-faith effort to comply with the order, and concluded that awarding title to the property is a reasonable “final resort against those property owners who have otherwise failed to comply with housing codes, building codes, nuisance laws, or tax assessments when less drastic steps toward compliance have failed.”  It further noted:

Even in the event of a complete taking, the State is not required to compensate a property owner if it can show that the owner’s bundle of rights never included the right to use the land in the way the regulation forbids….657A.10A provides a sanction for those who use their property in a manner that was already prohibited.  Because the statute does no more than duplicate the result that could have been achieved in the courts by adjacent landowners under the law of private nuisance, or by the State [in the case of public nuisances] it is not a constitutional taking for which compensation is required.

Judgment for the city of Monroe.

Dangerous Conditions Cause Mobile Home Park to Lose Legal Nonconforming Status **Decision overturned**

The decision discussed below has been overturned by the Iowa Supreme Court. 

This post will be left as it was, but please read the Iowa Supreme Court’s Ruling on Des Moines v. Odgen for an update to the case.

by Eric Christianson

Des Moines v. Ogden
Iowa Court of Appeals, June 7, 2017

Frank Ogden owns and operates a nonconforming mobile home park on the south side of Des Moines. He purchased the property in 2013 from his uncle. The property consists of a narrow u-shaped access road with mobile homes around the interior and exterior of this road. Although the 1953 Des Moines zoning ordinance prohibited mobile home parks in the city, the owner of the property obtained a certificate of occupancy for the mobile home park in 1955. The historical record is not clear, but its use as a mobile home park dates back to some time between 1947 and 1955.

The best record documenting historical use is an aerial photograph from 1963. The photograph depicts “permanent homes that are in close proximity to each other with additional structures attached to the homes.”

Current photographs depict the property as:

[A] congested, dilapidated, and hazardous jumble of structures. Many of the mobile homes are within feet of each other based on the addition of porches, decks, and living space. Residents park cars throughout the property narrowing portions of the already inadequate access road. Bulk trash items—such as tires, boats, and storage bins—are littered throughout the property. Grills, fences, gardens, and children’s toys also crowd the property.

The city did not issue any warnings or citations regarding the use of the property as a mobile home park until 2014. In 2014, a zoning administrator notified Ogden by letter of numerous violations of the 1955 Des Moines Municipal Code, under which the original certificate of occupancy had been awarded. These included setback violations, failure to maintain the access road, and additions to trailers among other issues. The letter also warned that the park’s violations posed a threat to the health and safety of the occupants.

Ogden did not take any action to remedy the violations. In October 2014, the city sought an injunction to close the park for the above listed violations. At trial the Des Moines Fire Marshall testified that the proximity of the mobile homes and the narrow access road created potentially dangerous conditions for residents.

The trial court found the fact that the occupancy permit was issued is proof enough that the property was in compliance with the above regulations at the time that the legally nonconforming use was established. This means that Ogden had the right to continue his nonconforming use subject to the laws in place in 1955 as long as the nature and character of the use as it existed in 1955 is not changed.

The court held that even under the laws in place in 1955, the certificate of occupancy should be revoked as the park poses a threat to “the safety of life or property”. The court also held that, “’use of [the] property has intensified beyond acceptable limitations’ because the conditions ‘pose a real threat in the event of an emergency.’”

Ogden appealed to the Iowa Court of Appeals arguing that the court was wrong to find that the nonconforming use posed a threat to life or property and that the use had been unlawfully expanded. He also argued that estoppel prevents the city from obtaining an injunction.

In addition to procedural questions relevant to this case the Court of Appeals examined the questions of nonconforming use and whether estoppel prevented the city from obtaining an injunction to close the park.

Nonconforming Use A nonconforming use is “one that lawfully existed prior to the time a zoning ordinance was enacted or changed, and continues after the enactment of the ordinance even though the use fails to comply with the restrictions of the ordinance.” A nonconforming use may continue indefinitely until abandoned, but it may not be “enlarged or extended”. The Des Moines Municipal Code adds that a nonconforming use may lose its protected status if discontinuance is “necessary for the safety of life or property”.

The Iowa Supreme Court has never ruled on whether the addition of structures or the expansion of homes in a mobile home park constitutes and an unlawful expansion of the nonconforming use. Other state courts, however, have found that replacing mobile homes with larger models or enlarging existing mobile homes in violation of setback requirements may constitute an unlawful intensification of the nonconforming use.

The Appeals Court found that:

Although this mobile home park has not changed in size or use, the record demonstrates it has grown within its borders in the numbers and location of structures attached to the mobile homes resulting in a narrowing of open space on the roadways and between the homes. […] these changes over a half century have enhanced and intensified the non-conforming use to the point where it is a danger to life and property. […] Ogden’s use of the property is not a lawful intensification of an existing nonconforming use. The present congestion and crowding between structures and narrowing the roadway changes the nature and character of the 1955 non-conforming use and presents a danger to residents and neighbors of the park.

Equitable Estoppel Further, Ogden argued that equitable estoppel bars the city from closing the mobile home park. The Court Defined equitable estoppel as, “a common law doctrine preventing one party who has made certain representations from taking unfair advantage of another when the party making the representations changes its position to the prejudice of the party who relied upon the representations.”

The court states that to prove estoppel Ogden must demonstrate:

  1. a false representation or concealment of material fact by the city,
  2. a lack of knowledge of the true facts by [Ogden],
  3. the city’s intention the representation be acted upon, and
  4. reliance upon the representations by [Ogden] to their prejudice and injury.

The court found that Ogden’s claim failed under the first element of the test. The city’s failure to enforce the zoning ordinance does not amount to false representation or concealment of material fact. The city does not notify property owners of every infraction. Instead the city’s enforcement is triggered by complaints.

The court affirmed the grant of the city’s request for an injunction against Ogden’s use of the property as a mobile home park.

Chief Judge Danilson partially dissented. He argues that the city failed to prove either that the mobile home part exceeded its original non-conforming use or that it poses a threat to the safety of people or property. In his opinion, there is no conclusive evidence of the condition or number of homes in the part in 1955, and the size and use of the park have not changed. He argues that although the condition of the park has likely deteriorated, there are less dramatic ways to improve conditions in the park.

Further, Danilson argues that there is insufficient evidence to conclude that the park poses a danger to people or property. The city or fire department have not taken any actions based on unsafe conditions, and the fire chief’s testimony was too general to draw any specific conclusions about the park’s safety.

Subjective desire to maintain building insufficient to overcome determination of ‘abandoned building’

by Hannah Dankbar

City of Harlan v Walter Rogers
Iowa Court of Appeals, January 27, 2016

Rogers obtained a house built in 1885 after the death of his father-in-law in 2004.  Rogers made minor maintenance to the property at that time, such as fixing a leaky roof and cleaning up the yard, but Rogers lived in California and had problems maintaining the property. Between 2007 and 2014 Rogers received and paid a dozen special assessments. Nobody lived in the house during this time.  Also during this time, the house was broken into multiple times and multiple antiques were stolen.

In 2011 Harlan police received a nuisance complaint about the house. As a result of that call a Shelby County Environmental Health Specialist inspected the property who reported that is was, “very apparent that the owners have let this property go for many years without any maintenance or upkeep.”

In 2012 the City filed its petition under section 657A.10A and sent Rogers an order stating that the house and garage were a nuisance and were in violation of local housing codes. Because Rogers made “substantial compliance with the pre-condemnation demands” made by the City, both parties filed for a continuance multiple times. In September 2014, however, Rogers’s attorney moved to withdraw from the case stating that Rodgers had not followed the advice of the attorney. After that, Rodgers represented himself in trial in January 2015. The Shelby County Environmental Health Specialist did a final assessment of the house and found that the house still did not comply with the City housing code.  The trial court concluded that the property posed a danger to neighboring properties and residents because of its’ condition.  The court declared the property abandoned and awarded the title of the house to the City. Rogers appealed this decision.

Rogers argued that the district court should not have determined that the property was abandoned. Iowa Code section 6577A.1(1) defines an “abandoned” building as one that “has remained vacant and has been in violation of the housing code of the city in which the property is located…for a period of six consecutive months.” The code offers a list of factors a court “shall consider” to determine whether a property has been abandoned. Rogers argued his desire to “maintain his ownership in the property in Harlan” is sufficient to overcome the conclusion that the property was abandoned, but the court did not agree. Even though Rogers was up to date on his property taxes and special assessments, the house did not have utilities for more than twelve years and was vacant during this entire time. According to inspectors the house did not meet code for human habitation; it was not a house that would be habitable simply by turning on the utilities. Rogers claimed he was working on getting the the house fixed and intended to move into it upon his retirement, but the court stated that Rogers subjective desire to maintain the property was not the controlling factor.  Because the property has been vacant for more than six months, the court determined that it met the statutory test for a abandoned property and ruled in favor of the City.

No need to make specific finding that building qualified as accessory building when granting special exception

by Hannah Dankbar

Hasanoglu v Town of Mukwonago and Town of Mukwonago Plan Commission
Wisconsin Court of Appeals, October 14, 2015

The Hasanoglus appealed a circuit court decision upholding a decision of the Town of Mukwonago Plan Commission to grant a special exemption to the Hollerns to build an accessory building on their property. The Hasanoglus argue that the Plan Commission does not have jurisdiction to grant this exception and that the exception was arbitrary and unreasonable.

The Hollerns applied for a zoning permit to build a riding arena on their property in rural Mukwonago. Mukwonago determined that the arena would be in “substantial compliance” with the town ordinances, except for the height and square footage of the building. The Plan Commission met and approved the proposal by granting a exception to the zoning ordinance. Their neighbors, the Hasanoglus, filed a certiorari action which sustained the decision.

On appeal, the Hasanoglus argued that according to the Town of Mukwonago Municipal Code §82-25(a)(2)(b)(2) the Town Board could grant this exception, but the Plan Commission does not have jurisdiction to do so in this case. While it is true that this section of the code gives this power to the Town Board, a different part of the code gives the same power to the Plan Commission (Town of Mukwonago Municipal Code §82-25(b)(3)). The court determined that §82-25(b)(3) is the appropriate subsection because there was no finding of a rural accessory building on the Hollerns’ property as is required by §82-25(a)(2)(b)(2).

Next, the Hasanoglus argued that: (1) the Hollerns did not follow the correct procedure to apply for the special exception; (2) that the Plan Commission agenda was not specific enough to give notice of the Hollerns’ request; and (3) the Plan Commission did not conduct a sufficient inquiry into whether the proposed riding arena qualified as an accessory building.

First, the question of whether the Hollerns followed the correct procedure was not raised in circuit court and the section of the municipal code that the Hasanoglus cite is only for property owners seeking exceptions for setbacks. This argument was not considered on appeal.

Second, the Plan Commission’s agenda states, “ACCESSORY BUILDING HEIGHT AND SIZE INCREASE FOR S64W27645 RIVER ROAD, MICHAEL AND LAURA HOLLERN PROPERTY OWNER.” The minutes show approval of the request. The Plan Commission is not obligated to be any more specific than that.

Lastly, The Plan Commission is not required to record a specific discussion and determination in its minutes that a building qualifies as an accessory structure.  The Plan Commission placed multiple conditions on the approval of the exception (an example being that there can be no commercial use) which demonstrated that it considered the issue and exercised its judgment.

These arguments failed, so the decision was upheld.

Notice of intent to demolish building “reasonably calculated” to inform owners of pending action

by Andrea Vaage

Yang v. City of Wyoming
Federal 6th Circuit Court of Appeals, July 13, 2015

Ming Kuo Yang and Julie Yang owned a commercial property in Wyoming, Michigan. The Yangs previously rented the property to a series of restaurants; eventually, the property was listed for sale in late 2010. The lease on the last restaurant ended in February 2011. The property was never sold and was then neglected. The owners continued to pay property taxes. In October 2011, city officials posted an abandonment notice on the building. The notice was also mailed to the address of the abandoned building, but listed the former owner as the recipient, not the Yangs. In July 2012, the city sent a “Notice and Order to Repair or Demolish” by signature-required certified mailing to the building address. This notice also listed the former owner as the recipient. Two months later, the post office returned the mail to the city as unclaimed. The City did a title search of the building and identified the Yangs as the correct owner. The City then sent both previous notices to the Yangs’ correct address by certified mail in September 2012.

The City did not receive a response from the Yangs. It then scheduled a hearing about demolishing the property for November 1, 2012. The City sent the Yangs a hearing notice by regular mail and also sent a notice to the Yangs’ realtor. Soon thereafter, the post office returned the original certified mailing to the Yangs as unclaimed. This information was not present. The Yangs did not appear to the hearing on November 1 where the board decided to demolish the property. The property was demolished in January 2013, and a $22,500 bill was sent to the Yangs’ address for the work.

The Yangs then discovered their building was demolished and claimed the city violated their procedural due process rights by demolishing the property without adequate notice. The standard of review is whether the City’s efforts were “reasonably calculated” to inform the Yangs of the action taken on their property. The City of Wyoming attempted to contact the Yangs through posted notices, mailed notices to the Yangs, mailed notice to the realtor, and the post-hearing notice. Michigan caselaw has established that a posted notice is, by itself, an appropriate way to inform a person of the proceedings against him. Another precedent notes that notice mailed to a person’s home address generally satisfies due process requirements. The Yangs argue, however, that notice by itself is not adequate, since the hearing notice did not provide the reasons for demolishing the property and the post-hearing notice would have come too late for the Yangs to prepare to defend themselves.

The Court found that all of the information contained in all of the notices, taken in the aggregate, were sufficient to meet due process requirements. Even though the Yangs did not actually receive notice, as the certified mailing was returned unclaimed, the additional efforts made by the City were reasonable attempts to contact the Yangs. The Court found the city’s attempts at contacting the Yangs were “reasonably calculated” to give the Yangs adequate notice.

Dissent

The dissent argued that the majority misconstrued the facts of the case and the contents of the notices provided by the City. The final four attempts at contacting the Yangs were not adequate because they did not provide the reasons for the potential demolition of the building, providing “less information than the average parking ticket.” The issue wasn’t whether the forms of notice were adequate, but whether the notices actually informed the owner of the issue. In the case, the dissent argues the City failed to provide the reasons for demolition in the follow-up notices and thus violated procedural due process.

In the end, the Cleveland Clinic got its helipad

by Hannah Dankbar

Cleveland Clinic Found. v. Cleveland Bd. of Zoning Appeals
(
Ohio Supreme Court, November 5, 2014)

The Board of Zoning Appeals of the City of Cleveland denied a permit to Cleveland Clinic Foundation and Fairview Hospital to build a helipad on the roof of a two-story addition to the hospital.

The land that the hospital sits on is zoned as a Local Retail Business District, meaning “a business district in which such uses are permitted as are normally required for the daily local retail business needs of the residents of the locality only.” (Cleveland Code of Ordinances (C.C.O.) 343.01(a)). The hospital has been granted many variances since this zoning was put in place.

In October 2010, the Clinic filed an application with the City’s Department of Building and Housing seeking approval of three construction projects, including the construction of the helipad. The City cited C.C.O. 343.01(b)(8), which says “accessory uses” are allowed “only to the extent necessary [and] normally accessory to the limited types of neighborhood service use permitted under this division,” and rejected all three projects.

The Clinic appealed to the Board of Zoning Appeals (BZA).  Opponents testified about potential noise and traffic problems.  The hospital representatives testified that almost all of the hospitals in the Cleveland metropolitan area have helipads, and that the use of helicopters in the transport of patients reduces travel time and, therefore, saves lives.   The BZA approved the other two projects, but denied the permit to construct the helipad citing C.C.O. 343.01(b)(8) by saying, “those uses that the Zoning Code characterizes as retail businesses for local or neighborhood needs would not involve a helipad as normally required for the daily local retail business needs of the residents of the locality.”

From here the Clinic appealed the denial to the Cuyahoga county Court of Common Pleas, who reversed the decision. This court used C.C.O. 343.01(b)(1) that provides that with limited exceptions, all uses permitted in the Multi-Family District are also permitted in the Local Retail Business District. Hospitals are expressly permitted in the Multi-Family district, and so the Court of Common Pleas concluded that a helipad is “customarily incident to” a hospital and therefore qualifies as an “accessory use.”

The BZA appealed to Eighth District Court of Appeals, who reversed again. The court found that ambiguity exists in C.C.O., and ultimately decided to give deference to the BZA and its original decision, saying “When the BZA reasonably relies on a code provision, its determination should hold so long as its decision is not unconstitutional, illegal, arbitrary, capricious, unreasonable, or unsupported by the preponderance of substantial, reliable and probative evidence on the whole record,” This is to be true regardless of the fact that the law requires any ambiguity in a zoning ordinance to be construed in favor of the property owner.

The Supreme Court of Ohio determined that the wrong standard of review was used by the Eighth District Court of Appeals. Rather than review the BZA’s decision for clear error, the Court of Appeals should have been reviewing the Court of Common Pleas decision, and only overruling the Court of Common Pleas if the decision is not supported by a preponderance of reliable, probative and substantial evidence. Reversal is only appropriate when there is an error in the application or interpretation of law.

The Supreme Court of Ohio refers to C.C.O. 325.02 and 325.721 (to define “accessory use”), 337.08 (types of buildings permissible in a Multi-Family District), and 343.01(b) (permitted buildings in a Local Retail Business District). “Given the record before us, we have little trouble concluding that the preponderance of substantial, reliable, and probative evidence supports the [Court of Common Pleas’] conclusion that helipads are customarily incident to hospitals, at least in Cleveland.”

Unreasonable-to-repair provision in Brighton (MI) unsafe structure ordinance passes constitutional muster

by Gary Taylor

Bonner v. City of Brighton
(Michigan Supreme Court, April 24, 2014)

Under the City of Brighton, Michigan’s code of ordinances, if a structure is determined to be unsafe and the cost of repairs would exceed 100 percent of the true cash value of the structure when it was deemed unsafe, then the repairs are presumed unreasonable, the structure is presumed to be a public nuisance, and the city may order demolition of the structure without providing the owner an option to repair it.  The unreasonable-to-repair presumption can be overcome by presenting a viable repair plan, evidence from the landowner’s own experts that the repair costs would not exceed 100 percent of the property value, or evidence that the structure has some sort of cultural, historical, familial, or artistic value.

The City ordered Leon and Marilyn Bonner to demolish three unoccupied residential structures on their property after determining that repairs would exceed 100 percent of the true cash value of each of the structures (thereby providing the Bonner’s no option to repair).  The Bonners sued the City, and the circuit court and Michigan Court of Appeals determined that the above-discussed provisions of the Brighton Code of Ordinances violated property owners’ substantive and procedural due process rights.  The City appealed to the Michigan Supreme Court.

The Supreme Court determined that the Court of Appeals erred by failing to separately analyze the Bonners’ substantive and procedural due process claims. The substantive component of due process protects against the arbitrary exercise of governmental power, whereas the procedural component ensures constitutionally sufficient procedures for the protection of life, liberty, and property interests.

Substantive Due Process.  Because property owners do not have a fundamental right to repair a structure deemed unsafe by a municipality before that structure can be demolished, the government’s interference with that right need only be reasonably related to a legitimate governmental interest. The Brighton ordinance did not constitute an unconstitutional deprivation of substantive due process because the ordinance’s unreasonable-to-repair presumption was reasonably related to the city’s legitimate interest in promoting the health, safety, and welfare of its citizens. Nuisance abatement is a legitimate exercise of police power, and demolition is a permissible method of achieving that end. The ordinance was not an arbitrary and unreasonable restriction on a property owner’s use of his or her property because the ordinances provided for circumstances under which the unreasonable-to-repair presumption could be overcome and repairs permitted.

Procedural Due Process.  The Supreme Court further determined that the  demolition procedures provided property owners with procedural due process by providing the right to appeal an adverse decision to the city council, as well as the right to subsequent judicial review. The City is not required to afford a property owner an option to repair as a matter of right before an unsafe structure could be demolished, nor is the City required to provide for a reasonable opportunity to repair the unsafe structure in order for the ordinance to pass constitutional muster.

Error to interpret list of accessory uses as an exhaustive list precluding other uses

by Kaitlin Heinen

City of Orono v. Jay T. Nygard, et al.
(Minnesota Court of Appeals, October 22, 2012)

Jay and Kendall Nygard live in a district of the City of Orono zoned as One-Family Lakeshore Residential (LR-1B). On October 13, 2010, the Nygards applied for a permit to erect a wind turbine on their property. Two days later on October 15, the City denied the Nygards’ permit application in a letter from the City’s Planning and Zoning Coordinator, which stated that wind turbines are not a permitted accessory use on property zoned LR-1B. On November 12, 2010, city employees observed a concrete footing being installed on the Nygards’ property, which they believed was being done to erect the wind turbine despite the City’s denial of their permit application. On November 16, 2010, the City issued a stop-work order and demanded that the Nygards remove the concrete footing. The Nygards disregarded this order and completed the wind turbine by February 2011.

In March 2011, the City filed suit in district court for a declaratory judgment that the Nygards’ wind turbine was not in compliance with the City’s zoning  ordinance.  In April 2011, the Nygards’ filed a separate suit against the City, challenging the City’s denial of their permit application. The district court consolidated the two cases. In March 2012, the district court granted the City’s motion and denied the Nygards’, holding that the City’s zoning ordinances clearly set forth a list of lawful accessory uses, which does not include wind turbines. The Nygards appealed to the Minnesota Court of Appeals.

The Nygards argue that the City misinterpreted 78-329 of the Orono City Code as setting forth an exhaustive list of lawful accessory uses, thereby forbidding wind turbines on LR-1B property. In contrast, the Nygards argued that section 78-329 is a non-exhaustive list and that their wind turbine is within the general definition of accessory uses. In reviewing the City’s interpretation of its zoning ordinance, the Minnesota Court of Appeals considered three principles: “First, courts generally strive to construe a term according to its plain and ordinary meaning…Second, zoning ordinances should be construed strictly against the city and in favor of the property owner…[Third,] A zoning ordinance must always be considered in light of its underlying policy.”

In regards to the first principle, the zoning ordinance should be interpreted according to its plain and ordinary meaning. It is reasonable to interpret 78-329 to mean that the nine accessory uses listed are the only lawful accessory uses in the LR-1B district. But the Nygards argue that 78-329 also can be reasonably interpreted to allow accessory uses that are not listed because the language of section 78-329 is different from the language of nearby sections of the zoning code, which are more explicit in foreclosing the possibility of other allowed uses.  Section 78-329 – the section in question – states that “the following uses shall be permitted accessory uses.”  Section 78-327, in contrast, states that “no land or structure shall be used except for” a list of specified uses, while another section – Section 78-566 – states that “no accessory structure or use of land shall be permitted except for one or more of the following uses.” Because 78-329 does not use the same type of strong language to negate the possibility of lawful accessory uses not listed within the ordinance, it is reasonable to interpret 78-329 more broadly to allow other accessory uses. Furthermore, the city conceded that it has interpreted 78-329 in other past situations to allow accessory uses that are not expressly mentioned. For example, the City has allowed structures such as flagpoles, basketball hoops or clotheslines within the LR-1B district.

In light of the City’s inconsistent interpretation of 78-329, the Minnesota Court of Appeals did not uphold the City’s denial of the Nygards’ permit application.  It ruled that the City erred when it denied the Nygards’ permit application, and that the district court also erred in entering judgment in favor of the City. The Minnesota Court of Appeals reversed the district court ruling and remanded the matter to the City for further consideration of the Nygards’ permit application.

City granted new trial after being found liable for wrongful building demolition

by Kaitlin Heinen and Gary Taylor

Dave McNeill v. City of Kansas City, Missouri
(Missouri Court of Appeals, August 7, 2012)

In summer 2008, McNeill purchased property, containing a building that had been on the City of Kansas City’s dangerous buildings list since August 2001. McNeill notified the City of his plans to renovate the building into a multi-tenant residential building. He began various renovations, but the work on the building stagnated when McNeill’s bank backed out of a construction loan.

In June 2009, the City sent a letter to McNeill instructing him to remove some debris sitting on the property and some weeds  The city requested a meeting with him. McNeill complied with the cleanup request. On June 24, 2009, McNeill met with City Inspector Smith and Codes Enforcement Supervisor Parks, who was filling in for Crider, the Codes Enforcement Supervisor regularly assigned to that file. McNeill explained his plans for continued renovation and that he would obtain more funding soon. Smith and Parks agreed to allow McNeill more time. They also ordered McNeill to remove more debris from the side of the building, so McNeill hired a contractor to remove the debris and grade the yard in July 2009. McNeill notified Smith and Parks of the completed work on July 20. On July 31, McNeill received preliminary commitment for another construction loan.

On August 8, 2009, the City demolished the building without contacting McNeill, disregarding the policy of the Dangerous Buildings Division to send the property owner a pre-demolition notice. Crider had recommended the demolition based on records on file, which included neither Smith and Parks’ notes from June 24 indicating their promise to McNeill for more time, nor a record of McNeill’s July 20 phone call.  The City subsequently sent McNeill a bill for the demolition.

On August 7, 2010, McNeill filed a petition, claiming the city wrongfully demolished his building. The trial’s jury returned a verdict in favor of McNeill’s claim for $150,000. The City then claimed that the trial court had erroneously submitted to the jury an instruction containing a roving commission. (A ‘roving commission’ is “an abstract instruction…in such broad language as to permit the jury to find a verdict without being limited to any issues of fact or law developed in the case.”) The trial court agreed and granted the City a new trial.  McNeill appealed to the Missouri Court of Appeals.

The Missouri Court of Appeals agreed with the trial court’s conclusion that its jury instruction created a roving commission.  The Court of Appeals agreed that the instruction given to the jury as to finding whether the building was “wrongfully demolished” was too general because it did not identify the acts or omissions of the City that might be considered “wrongful.”  The Court of Appeals noted that there are no Missouri Approved [Jury] Instructions -nor is there any case law interpreting – the state statute (Section 67.450) regarding wrongful demolition. Without precedent, the protocol then is to apply the word’s “plain and ordinary meaning,” which can be appropriately found in the dictionary. The Court of Appeals found that the term “wrongful” does not need to be defined; rather the instruction should simply request the jury to find that (a) plaintiff owned a building, (b) the City demolished it, (c) that the City‟s demolition of the structure was wrongful in one or more specified ways, and (d) plaintiff was damaged as a direct result thereof. In its simplest context, the word “wrongful” or “wrongfully” “only requires the result to be incorrect, regardless of whether the City’s conduct was mistaken, careless, negligent, reckless or intentional.” The submission of the way or ways in which the demolition was wrongful will differ from case to case.

The trial court’s grant of a new trial was affirmed.  The Court of Appeals recommended that on retrial the trial court refer to Section 67.450 to establish the criteria on which the jury should be specifically instructed, and that the jury be instructed that any demonstrations of wrongful demolition must be supported by evidence.

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