Category: Procedural Issues

Legally sufficient hearing must allow public comment on the underlying reason for the requested zoning amendment

hdankbar

by Hannah Dankbar

Campbell, et al., v. Franklin County and Union Electric Company d/b/a Ameren Missouri
Missouri Supreme Court, February 3, 2015

Multiple individuals joined the Labadie Environmental Organization (LEO) to file a writ of certiorari claiming that Franklin County Commission made errors in their adoption of zoning amendments that would allow Union Electric Company to build an ash-coal landfill next to its power plant in Labadie.

The organization made two claims on appeal: (1) the commission did not conduct a legally sufficient hearing before adopting the zoning amendments that would allow the coal-ash landfill, and (2) the court erred in finding that the zoning amendments were promoting public health, safety and welfare and are therefore valid.

Ameren (the owner of the Labadie Power Plant) publicly announced the proposal to build the coal-ash landfill on the land next to the power plant. The plant is the only public utility power plant in Franklin County and the only possible location for the coal-ash landfill. LEO alleges that the chairman of the Planning and Zoning Commission told speakers at the public hearing that they could not discuss Ameren or the proposed site for the landfill, and that county officials “interrupted speakers when they attempted to discuss Ameren’s proposed Labadie landfill site…”  LEO alleges that placing limitations on what the public was allowed to speak about meant that the county had not conduced a legally sufficient hearing.

After LEO filed their petition, the court asked the county to produce records from the meeting. The county did, and the commission and Ameren filed motions to dismiss for failure to state a claim. The court dismissed the first count of LEO’s petition and determined that the zoning amendments were valid.  LEO appealed.

The Missouri Supreme Court noted that the statute does not expressly provide whether a public hearing is required, nor does it explicitly define what constitutes a “hearing.”   The Court concluded first that it would be “nonsensical” to require public notice of a non-public hearing.  The hearing, therefore, was a public hearing.

Following that is the question whether the public hearing was insufficient because the commission precluded the public from addressing Ameren’s proposed coal-ash landfill.  A dictionary definition of “hearing” is “a session…in which testimony is taken from witnesses,” “an opportunity to be heard to present one’s side of a case, or to be generally known or appreciated,” and “a listening to arguments.”  Given the plain language meaning of the word “hearing,” the Court concluded that the legislature intended for members of the public to be able to present their side of the case.  The hearing, therefore, should be conducted so that the public can address the subject matter of the proposed zoning amendments.  Assuming LEO’s allegations are true, the manner in which the hearing was conducted arguably denied the citizens of Franklin County a fair opportunity to be heard and to present their side of the case.  It prevented them from discussing the actual, underlying subject of the amendments.

The Missouri Supreme Court remanded the case to the circuit court to direct the county to hold a legally sufficient hearing.

 

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MN township not authorized to levy permit review expenses against landowner

by Rachel Greifenkamp

Great Western Industrial Park, LLC v. Randolph Township
Minnesota Court of Appeals, September 8, 2014)

South of the Twin Cities along the Minnesota-Wisconsin border lies Randolph Township. Here, Recovery Technology Solutions (RTS) was considering purchasing land from Great Western Industrial Park, LLC to use as the site for a facility for recycling asphalt shingles. RTS submitted an application to Randolph Township for a conditional use permit that was denied, and so RTS decided against purchasing the available land. After the denial of the application RTS received a letter stating that it was to reimburse the township for all expenses incurred in the application review, which totaled $31,666.41 (mostly legal and consulting fees). When RTS did not pay the expenses the township wrote a letter to Great Western (the landowner) notifying it of its responsibility for the expenses, as well as interest, late charges, recording charges, and attorney’s fees. The township also informed Great Western that the amount was going to be certified to the County Auditor for collection with the 2014 property taxes.  Great Western sued.

Minn. Stat. 366.012 states:

If a town is authorized to impose a service charge for a governmental service provided by the town, the town board may certify to the county auditor of the county in which the recipient of the services owns real property, on or before October 15 for each year, any unpaid service charges which shall then be collected together with property taxes levied against the property.

Minn. Stat. 462.353 provides:

A municipality may prescribe fees sufficient to defray the costs incurred by it in reviewing, investigating, and administering an application for an amendment to an official control established pursuant to sections 462.351 to 462.364[governing municipal planning and development] or an application for a permit or other approval required under an official control established pursuant to those sections. Except as provided in subdivision 4a,[1] fees as prescribed must be by ordinance. Fees must be fair, reasonable, and proportionate and have a nexus to the actual cost of the service for which the fee is imposed.

Noting that any prescribed fee “must be by ordinance,” the Court of Appeals reviewed the township’s zoning and fee ordinances and found no provision that permits the township to impose a fee on a property owner when a CUP application is denied and the CUP applicant fails to pay the costs incurred by the township in processing the application. The township relied on a section in the fee ordinance that requires that a $300 nonrefundable fee and a minimum $1,200 escrow payment be submitted with a CUP application, but the court found that this language does not authorize the township to impose a service charge on the owner of the property for which the CUP was sought.

The township was not authorized to impose a service charge against Great Western for the expenses incurred by the township in processing RTS’s conditional use permit application, and the ruling fell in favor of Great Western.

 

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Issue preclusion can be applied to bar zoning board proceedings, but applicants for 1998 and 2011 special exceptions were different

Gary Taylor

by Gary Taylor

Prybil Family Investments, Ltd., v. Board of Adjustment of Iowa City
(Iowa Court of Appeals, September 5, 2013)

In July 2011 Streb Construction Company filed an application for a special exception to operate a wet batch concrete plant on land zoned “General Industrial”  in the Scott-Six Industrial Park in Iowa City.  After a public hearing the Iowa City Board of Adjustment (Board) approved the special exception in September 2011.

Prybil Family Investments owns agricultural property adjacent to the land in question.  The land has been used for farming, and will continue to be for the forseeable future. Prybil filed a writ of certiorari to contest the Board’s decision.  Prybil’s main argument was that the same property owner filed an application for a special use permit to operate a cement plant on the same property in 1998, and was denied.  Therefore the doctrine of issue preclusion prevented the Board from considering the 2011 application (issue preclusion prevents the same issue from being reconsidered again in a later proceeding).  Alternatively, Prybil argued that the Board’s decision was not supported by substantial evidence. The district court disagreed on both claims and allowed the permit to stand.  Prybil appealed to the Iowa Court of Appeals.

The Court of Appeals began by noting that Iowa case law has never addressed whether the concept of issue preclusion applies to zoning board determinations.  It did acknowledge that in Johnston v. Christenson, the Iowa Supreme Court stated that “an administrative adjudication by an entity such as the board of adjustment can have a preclusive effect in a judicial proceeding..”  It also referenced Am. Jur. 2d, Zoning and Planning, which states that “res judicata (a concept that encompasses issue preclusion) applies to administrative zoning decisions in order to promote finality of decisions unless it is shown that there has been a substantial change of circumstances since the earlier ruling.” The Court, therefore, determined that issue preclusion can be applied to bar a second application for a special exception if the following elements, cited in Johnston v. Christenson, are met: (1) the issue must be identical; (2) the issue must have been raised and litigated in the prior action; (3) the issue must have been material and relevant to the disposition of the prior action; and (4) the determination made in the prior action must have been essential and necessary to the resulting judgment.” “However,” the Court noted, “if there has been a substantial change of circumstances” the concept will not apply.

Before beginning its analysis of the four factors it cited, it determined that, in any event, Prybil’s issue preclusion claim failed because the applicant for the 2011 special exception was not the same as the applicant for the 1998 special exception. Even though “Streb Construction Company” applied for the 2011 permit, and “A.F. Streb” applied for the 1998 permit the Court concluded that “Prybil presented no evidence showing that the parties were identical or [in close legal relation].”  The Court went on, however, to note that Prybi’s claim would also fail on the Christenson factors.  The mobile wet batch plant desired in 2011 incorporates improved environmental protections.  The 2011 and 1998 applications were for different lots in the Industrial Park.

After a lengthy discussion about what issues related to the substantial evidence claim were properly preserved for appeal by Prybil, the Court addressed the substantial evidence claim itself.  Prybil contended that the dust pollution from the plant will interfere with Prybil’s use an enjoyment of its property by damaging crops, but the Court did not disagree with the Board’s conclusion that conditions attached to the special exception – requiring Streb to pave the surrounding roads and plant trees to act as a screen from adjacent properties – were sufficient to satisfy the concern.  Prybil also contended that its property values would be diminished by the plant, but the Court again found sufficient evidence to support the Board’s conclusion that there were no Heavy Industrial zones in Iowa City where the plant could locate by right and any opinions on effect on future property values were merely speculative.  Although Prybil offered contrary testimony from two realtors, the Court said that the information presented at the hearing was sufficient to support the Board’s decision.

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Landowner not entitled to injunction when ownership of easement rights in dispute

by Kaitlin Heinen

Hawkeye Land Company v. City of Coralville, Iowa
(Iowa Court of Appeals, June 12, 2013)

Hawkeye Land Company filed an application for injunction on April 6, 2012, which involved a parcel of land and railroad tracks located on the southern end of Coral Ridge Avenue in Coralville, Iowa. The application was filed in response to the City of Coralville’s decision to extend Coral Ridge Avenue over the tracks in order to provide access to a developing subdivision. Prior to construction of the extension, “Coralville did not initiate eminent domain proceedings.” The City negotiated with Heartland Rail Corporation, believing that Heartland, rather than Hawkeye, had the rights to approve the street extension over the railroad tracks. An agreement between Coralville and Heartland was reached.

Both Hawkeye and Heartland claimed to have received ownership from the railroad’s original owner, Chicago Pacific Corporation (CPC). Heartland claimed to have purchased rights from CPC and to have been granted rights to operate the rail line including the right to grant easements, such as construction of a street over the tracks. Coralville argued its purchased such an easement from Heartland. On the other hand, Hawkeye argued it purchased rights from CPC including the right to grant easements for “transportation and transmission systems” by “whatever means,” which arguably includes streets. The most contentious issue between parties was which party possessed rights to grant easements necessary to extend Coral Ridge Avenue over the railroad tracks and whether that party had been properly compensated. If Hawkeye possessed rights, the extension could constitute a taking requiring eminent domain proceedings and payment to Hawkeye. If Heartland possesses rights, eminent domain proceedings are not necessary because Coralville had compensated Heartland. The district court denied Hawkeye’s application for injunction because it found that Hawkeye failed to show that it had suffered irreparable harm and had no adequate remedy at law.

To obtain an injunction, the owner must prove irreparable injury and that no adequate legal remedy is available. “When property has been subject to condemnation, the landowner may permanently enjoin the eminent domain proceedings.” Also, “[i]n each case where a permanent injunction has enjoined condemnation under eminent domain, condemnation has occurred first.” The Iowa Court of Appeals held that this did not happen in this case. Coralville brought no condemnation proceedings, but Iowa law provides a remedy for a taking that has occurred without condemnation proceedings. Mandamus, or inverse condemnation, is available as a remedy when an agency has taken private land for public use without condemnation proceedings or employing eminent domain. So, the Iowa Court of Appeals ruled that the rights of the parties need not be decided at this time because the question before the court in this case was whether Hawkeye was entitled to an injunction. “A mandamus action is available to it, and as that action will result in the same outcome as a condemnation proceeding, it provides an adequate remedy at law.” Yet, “[b]ecause Hawkeye is unable to satisfy the necessities to obtain an injunction,” the district court’s decision was affirmed.

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Sierra Club must exhaust administrtative remedies before challenging Iowa DOT highway extension proposal

by Kaitlin Heinen

Sierra Club Iowa Chapter, Linda Biederman, and Elwood Garlock v. Iowa Department of Transportation
(Iowa Supreme Court, June 7, 2013)

The Iowa chapter of the Sierra Club has more than 5000 members residing in the state, some of which hike in Rock Island State Preserve and Rock Island County Preserve. The Iowa Department of Transportation (IDOT) is a state administrative agency that has proposed extending Highway 100 west of Cedar Rapids, which would run adjacent to Rock Island State Preserve and through Rock Island County Preserve, thus negatively impacting the ecosystems in the two preserves.

The Sierra Club Iowa Chapter and two of its members filed a petition for judicial review challenging IDOT’s Highway 100 project. The IDOT responded with a motion to dismiss, which was granted by the district court because the Sierra Club “had not exhausted administrative remedies by first seeking a declaratory order from IDOT under section 17A.9(1)(a).” The Sierra Club did not participate in any administrative proceedings with IDOT prior to filing the petition for judicial review.

On appeal, the Iowa Supreme Court addressed the issue “if a party challenging agency action must seek a declaratory order from the agency under section 17A.9(1)(a) before petitioning for judicial review in order to satisfy the exhaustion doctrine.” Important to note, Iowa Code § 17A.19(1) provides: “A person or party who has exhausted all adequate administrative remedies and who is aggrieved or adversely affected by any final agency action is entitled to judicial review thereof . . . .”  There are situations when a party can bypass the exhaustion doctrine; however, “the Sierra Club has not preserved error on an argument for one of these exceptions to apply.”

The Sierra Club filed a complaint in federal court, captioned “Complaint for Declaratory and Injunctive Relief.” The complaint involved the United States Secretary of Transportation and the Administrator of the Federal Highway Administration as defendants. The Sierra Club alleged that “the secretary and administrator did not follow the applicable federal statutes and regulations when they issued and approved the Final Supplemental Impact Statement for the Highway 100 project.” Because of the complaint’s caption, the Iowa Supreme Court held that the Sierra Club requested declaratory and injunctive relief. Because the Sierra Club sought declaratory relief, “the court must [construe] section 17A.9 to determine whether declaratory orders are mandatory or permissive.” Section 17A.9 was adopted in 1974 as part of the Model State Administrative Procedure Act. When enacted, 17A.9 required “any agency with authority to issue declaratory rulings to do so within thirty days after a party files the petition…Failure of the agency to do so results in the administrative remedy being ‘deemed inadequate or exhausted.’”

To construe such a statute, the court must determine legislative intent. If the statute’s language is unambiguous, the court looks no further. One could argue that “the requirement to file a petition for declaratory relief with the agency is permissive because the word ‘may,’ as found in section 17.9(1)(a), is unambiguous.” The Iowa Code’s rules of statutory construction state: “The word ‘shall’ imposes a duty. . . . The word ‘must’ states a requirement. . . . The word ‘may’ confers a power.” Further, “the legislature’s use of the word ‘may’ usually indicates legislative intent for the statute to apply permissively…[so] a person can argue that a party need not exhaust administrative remedies before filing a declaratory judgment action with the court.” But to the contrary, “when a statute provides a person with an administrative remedy and uses the word ‘may,’ but does not explicitly state the administrative remedy is the exclusive remedy, the person is still required to exhaust the administrative remedy before seeking court intervention…[so] a person can also argue that a party must file a declaratory order with the agency before seeking court intervention, because the Code uses the word ‘may.’” As a result of these competing interpretations, the court found the statute ambiguous.

After assessing the statute in its entirety, the court concluded the legislature’s intent when enacting section 17A.9(1)(a) “requires the Sierra Club to first petition IDOT and therein ask the agency to determine whether IDOT complied with sections 314.23(3) and 314.24 in extending Highway 100 adjacent to the Rock Island State Preserve and through the Rock Island County Preserve.” First, by using the term “inadequate or exhausted,” the legislature indicated that a party must first exhaust his or her administrative remedies before seeking court intervention. Second, an article written by the 1973-1974 counsel to the Subcommittee, Arthur Bonfield, “revealed that the legislature created the administrative procedure for agency-issued declaratory orders to replace the court-provided remedy of declaratory judgments for matters within an agency’s jurisdiction,” which means that the legislature clearly “intended section 17A.9 to be the preferred method for obtaining a declaratory order when a person challenges the agency’s administration of a statute.” Third, “in a declaratory order proceeding, the agency must state in its order the facts it relied upon and the basis for its decision…[which] ensures the agency will make a complete record and the parties will know the rationale supporting the agency’s decision.” Fourth, though the Sierra Club argued it would be futile to ask the agency to reverse its own decision, the court did not agree. In the past, “agencies…have decided many issues within their purview…[with] no evidence to suggest agencies will conduct declaratory order proceedings in a biased, unprofessional manner and without regard for the rules promulgated by the legislature.” Finally, “any party to a declaratory order may seek judicial review of that order…[which] protects a party to a declaratory order proceeding if the agency makes the incorrect decision.”

Therefore, the Iowa Supreme Court “concluded [overall] that the Sierra Club must first seek a declaratory order under Iowa Code section 17A.9(1)(a) before asking the court for relief; and thus, the exhaustion doctrine bars its petition.” The Iowa Supreme Court affirmed the district court’s judgment.

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Federal 6th Circuit dismisses defamation, other claims

by Kaitlin Heinen

Rondigo, LLC, Dolores Michaels v. Township of Richmond, Michigan
(Federal 6th Circuit Court of Appeals, March 28, 2013)

Rondigo, LLC is a Michigan limited liability company in Macomb County owned by Dolores Michaels. Rondigo and Michaels (the plaintiffs) have operated a farm in Richmond Township since 2004. In February 2006, the plaintiffs began composting on the farm and started constructing a driveway to assist with the composting. The Supervisor of Richmond Township, Gordon Furstenau, issued a stop-work order. The Township filed suit in state court in regards to the  driveway’s construction, which they claimed violated several zoning ordinances.

The Michigan Department of Agriculture also received complaints from neighbors about the farm’s odor. So the Department inspected the farm in October 2006 and ordered the plaintiffs to submit a compost operations plan by December 2006. The Department inspected the farm again in January 2007 and found that the plaintiffs had been stockpiling leaves. The Department advised them to remove the piles because runoff from the leaves could negatively impact groundwater in the area. The plaintiffs did not remove the piles, allegedly because they could not do so without the driveway. The Department sent a letter in April 2007, saying it would refer the matter to the Michigan Department of Environmental Quality (MDEQ) if the leaves were not removed. So the plaintiffs filed an emergency motion with the state court to remove the bar on the driveway’s construction. The court granted the motion, but the plaintiffs did not remove the leaves. So the matter was referred to the MDEQ.

In January 2008, the plaintiffs filed this suit against Richmond Township, Furstenau, Four Township Citizens’ Coalition, more than 20 Macomb County residents, 2 Department employees, and 3 MDEQ employees. “The plaintiffs asserted five claims: (1) a 42 U.S.C. § 1983 claim that the defendants violated the plaintiffs’ constitutional rights; (2) a 42 U.S.C. § 1985(3) claim that the defendants conspired to deprive the plaintiffs of their constitutional rights; (3) a 42 U.S.C. § 1986 claim that the defendants knowingly failed to prevent the violation of the plaintiffs’ constitutional rights; (4) a civil-conspiracy claim under Michigan state law; and (5) a defamation claim under Michigan state law.” The plaintiffs also asserted that the Township’s zoning ordinances were unconstitutionally vague. The district court dismissed all these claims, so the plaintiffs appealed to the 6th Circuit.

First, the plaintiffs argued that the district court erred in holding that “res judicata” bars their claims against the Township and Furstenau. Under Michigan law, “res judicata” bars an action if it involves the same parties as a prior action and if the matter could have been resolved in that prior action. The plaintiffs could have asserted their claim against the Township and Furstenau in state court. The plaintiffs did not pursue many of the claims they used as defenses against the Township’s complaint. The claims previously brought before the state court and the claims presented in this case arose from the same events. So “res judicata” precludes the plaintiffs from asserting their claims against the Township and Furstenau because these claims could have raised in a prior state action.

Next, the plaintiffs argued that the district court erred in dismissing their § 1983 claims against the Four Township’s Citizens’ Coalition and the Macomb County residents. The plaintiffs cannot maintain these claims against these defendants, however, because they are not state actors. Also, the plaintiffs did not appeal the dismissal of their § 1985(3) or § 1986 claims against these defendants. Therefore they waived these claims. The plaintiffs do appeal the dismissal of their state-law claims, but they failed to develop their argument against the dismissal. So the plaintiffs waived these claims as well.

Finally, the plaintiffs argued that the district court erred in dismissing their defamation and civil-conspiracy claims against the Department and MDEQ employees. In regards to the defamation claim, “the plaintiff must allege that the defendant made a false and defamatory statement about the plaintiff. But a qualified privilege protects the defendant from the defamation claim if the defendant had an interest or duty to make the statement to someone having a corresponding interest or duty.”  The plaintiffs alleged that the defendants made defamatory statements to state employees and to the plaintiffs’ neighbors. But these statements were made while investigating complaints about the farm. The defendants had an interest in communicating with their co-workers and the plaintiffs’ neighbors to facilitate the investigation. And the employees and neighbors had a shared interest in the investigation. So the plaintiffs did not overcome the qualified privilege, which protects the defendants from the plaintiffs’ defamation claims. Additionally, a civil-conspiracy claim cannot “exist in the air.” So the plaintiffs cannot maintain civil-conspiracy claims because there were no other claims left in this case.

The 6th Circuit Court affirmed the dismissal of the plaintiffs’ claims by the district court.

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Supermajority requirement for county (MN) zoning ordinance amendment allowed to stand

Gary Taylor

by Gary Taylor

Motokazie! Inc., et al., v. Rice County, Minnesota
(Minnesota Court of Appeals, December 17, 2012)

Motokazie! Inc., sought to build a motorsports facility in Rice County, Minnesota that would include snowmobile and go-kart racing – land uses not allowed in the zoning district. Motokazie! and co-appellant Portinga Brothers LLC applied for a text amendment to Rice County Zoning Ordinance so that the uses they desired could be allowed with a conditional use permit. The Rice County Board of Commissioners (Board) considered the proposal and voted three-to-two in favor of the proposed change; however, under the Rice County zoning ordinance a supermajority (four-fifths) vote is required to adopt a zoning amendment.  Therefore, the amendment proposed by Motokazie! and Portinga was deemed defeated.

Motokazie! and Portinga brought an action against Rice County, arguing that: (1) the zoning amendment was actually approved by the three-to-two vote because Minn. Stat. § 375.51(1) dictates that a simple majority approves such amendment, and (2) the zoning amendment was automatically approved under Minn. Stat. § 15.99(2)(a) because it was not approved or denied within 60 days. The district court denied relief on both arguments.  The case was appealed to the Minnesota Court of Appeals.

Supermajority.  The Court of Appeals concluded that while there is no explicit or specific grant of authority to create the supermajority requirement , such authority is clearly contemplated within chapter 394.  Minn. Stat. § 394.21(1) authorizes counties “to carry on county planning and zoning activities.” Minn. Stat. § 394.25(7)(a) authorizes a county to adopt “procedures to be employed in land development.”  Minn. Stat. § 394.312 refers to “procedures for the administration of official controls.”  Moreover, it is well settled that counties have the authority to exercise not only the powers as are expressly granted to them by the state, but also have the authority to enact such procedural rules and requirements necessary to exercise such powers.  Because chapter 394 authorizes the county to enact procedural controls, the enactment of a supermajority rule for zoning amendments was within the authority of the county and is not inconsistent with the procedural requirements of section 375.51.

60-day deadline. Minn. Stat. § 15.99(2)(a) states in part that “an agency must approve or deny within 60 days a written request relating to zoning, septic systems, watershed district review, soil and water conservation district review, or expansion of the metropolitan urban service area for a permit, license, or other governmental approval of an action. Failure of an agency to deny a request within 60 days is approval of the request….”  Motokazie! and Portinga argued that the 60-day rule required approval of the requested amendment and that it was undisputed that respondents did not comply with the 60-day rule.  The county responded that the 60-day deadline was extended by Motokazie’s agreement to a timeline that went beyond 60 days, and by an e-mail from a county official indicating that the decision would come after the 60-day deadline had passed.  The county further argued that a text amendment request is not “a written request relating to zoning . . . for a permit, license, or other governmental approval of an action” within the meaning of the statute. The Court of Appeals sided with the county on the statutory interpretation argument, concluding that a text amendment is of a different character than a permit or license, and therefore not contemplated by section 15.99(2)(a).  The Court observed that amending the text of a zoning ordinance would apply to all properties of that type in the county, rather than the specific property to be permitted, licensed, subdivided, or rezoned; making it “a pure exercise of the legislative power of the county.”  Also, approval of text amendment request would not allow the applying party to undertake an action, rather the request is for the government to take an action. The Court viewed this conclusion as being consistent with the policy goals for section 15.99, believing that “it benefits the public interest to have [text amendments that affect a] large class of property be made with adequate time for a fully deliberated decision” rather than having an automatic approval penalty result in approval without any justifications.

The district court decision was affirmed.

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E-mail from planning department staff member after building permit issued was not an “appealable decision” regarding the permit

Gary Taylor

by Gary Taylor

BT Residential, LLC v. Board of Zoning Adjustment of the City of Kansas City
(Missouri Court of Appeals, December 4, 2012)

On July 16, 2010, the City of Kansas City issued a permit for the construction of a cellular tower to the American Tower Corporation (ATC). In early August 2010, BT Residential (BT), the owner of a neighboring property, became aware of the construction of the cellular tower after a 150-foot, steel pole was erected and contacted the City to review the plans for the tower. On August 10 representatives for BT met with members of the City Planning Department to discuss perceived violations of the Development Code. On August 17 the attorney for BT met with the Director of the Department and explained why BT believed that the building permit had been improperly issued because the cellular tower and equipment building on the property did not meet the requirements of the Development Code. On August 18 BT’s attorney sent a follow-up email reiterating his points and asking the Department to issue a stop-work order and to revoke the permit. On August 29 the attorney sent an email to another member of the Department indicating that he had not yet received a written response from the Department. On August 30 The Department member sent the attorney an email stating: “My apologies if there was any miscommunication, I intended the written response to follow once information to allow a complete response was available. We have been unable to locate the documentation related to the demonstration of need provisions, but have been in contact with the applicant and now expect receipt by midweek. We will continue to follow-up with the applicant as needed, and will provide you an update once we have confirmed compliance to those provisions.” The e-mail went on to cite the relevant provisions of the Development Code as they related to the project.  On September 3 BT filed an appeal with the Board of Zoning Adjustment (BZA) claiming to challenge “the determination of the City’s Building Official… that the permit issued to American Tower Corporation for construction of a new cell tower complies with the City’s Zoning and Development Code, Chapter 88.” ATC filed a response opposing BT’s appeal and moving for dismissal of that appeal based upon the fact that BT had not filed its appeal within fifteen days of the issuance of the building permit or within fifteen days of discovering that such a permit had been issued as required under the Development Code.  The BZA dismissed BT’s appeal, concluding that the August 30 email from the staff member of the Planning Department was not an appealable decision under the Development Code.  When BT appealed the BZA decision the trial court affirmed.

In response to BT’s claims that the August 30 email constituted an appealable administrative determination, the Court of Appeals reviewed the City’s Development Code and concluded that in order for the e-mail to constitute an appealable decision two elements must be present: (1) that the Director of the Planning Department had the authority to revoke the building permit and (b) that he delegated that authority to the staff member who sent the e-mail.  The Court determined that neither were the case.  No provision of the City Development Code grants the Director the authority to revoke a previously granted building permit based on considerations which existed at the time of the permit’s original issuance. Furthermore, even if the authority did exist somewhere in the Development Code there was no evidence in the record that such authority was delegated to to the staff member or for that matter, whether the staff member even purported to exercise such authority. While BT argued that it could be inferred from the fact that the staff member handled communication with BT following BT’s request that the permit be revoked that the Director had authorized the staff member to decide whether to revoke the permit, the BZA was not required to make such an inference. In addition, the language contained in Franzen’s e-mail could just as reasonably be interpreted as an explanation of the Director’s decision to issue the permit, as opposed to a decision whether to revoke that permit. Thus, the BZA could reasonably have concluded that Franzen’s e-mail was not an appealable decision.

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Missouri Court of Appeals addresses neighbor’s standing in zoning board litigation

Gary Taylor

by Gary Taylor

Underwood v. St. Joseph (MO) Board of Zoning Adjustment; Sharon Kennedy (Appellant)
(Missouri Court of Appeals, January 17, 2012)

Underwood submitted construction plans to the city of St. Joseph to obtain a building permit for a detached garage measuring 1,328 square feet. The city approved the plan and issued a building permit. Approximately three months later, however, when the structure was 80% complete, the city received an anonymous complaint about the garage and issued a stop work order because the garage actually measured 1,427 square feet. In fact, the city zoning ordinance limits the size of a detached garage to “an area no greater than 30% of the rear yard area behind the principal structure” which, based on the size of Underwood’s yard, meant that the garage could be no larger than 1,035 square feet. The city advised Underwood to either obtain a demolition permit or seek an area variance from the city board of zoning adjustment (BZA). Underwood chose the variance route.

In response to Underwood’s variance request, the city mailed certified letters to adjacent landowners (including Kennedy) notifying them of the BZA hearing on the variance request. Prior to the hearing the city acknowledged that it erroneously issued the building permit for the 1,328-square-foot design and offered to pay 76% of Underwood’s cost to downsize the garage (the portion of excessive square footage attributable to the city’s error). Also prior to the hearing the BZA received written comments from three adjacent landowners regarding Underwood’s requested variance. One of the comments was from Kennedy, expressing her opposition to the variance based upon her concern that “the garage does not fit the character of the neighborhood due to its size and construction material.” and that it “may adversely affect property values in the neighborhood.” At the BZA hearing, however, no one appeared to testify in opposition to the variance request. Nonetheless, the BZA denied the variance. Underwood filed an appeal of the denial with the circuit court. Underwood was identified as “petitioner,” and the BZA and City were identified as “respondents.” On April 4, 2011, the circuit court entered a judgment reversing the BZA’s denial of the variance and remanding the case with orders that the variance request be granted. At a second BZA hearing held May 3, 2011, the city recommended that the BZA adopt the circuit court’s findings of fact and conclusions of law. Kennedy appeared at this second hearing and argued against granting the variance request based upon her previously stated reasons. At the second hearing, the BZA adopted the circuit court’s findings and granted the variance. One week later, Kennedy filed a notice of appeal in the Missouri Court of Appeals challenging the circuit court’s judgment.

The Court of Appeals determined that Kennedy lacked standing to bring the appeal before the Court of Appeals because Missouri statute limits the right to appeal to “any party” aggrieved by a decision of a circuit court, and Kennedy was not a party to the proceedings before the circuit court.  Kennedy cited two reasons why the statute should not be followed; first, that the Missouri Administrative Procedures Act allows any person “aggrieved by a decision in a contested case” to appeal and that, as a result, she was not required to be a party to the circuit court litigation.  The court rejected this argument because the zoning enabling statutes contemplate a different process that makes this provision of the Administrative Procedures Act inapplicable. Second, Kennedy argued that when the city chose not to appeal the circuit court’s decision, standing transferred to those for whom the city was acting in a representative capacity; i.e., those like Kennedy who would be aggrieved by the decision. The court rejected this argument as well, stating that state law allows aggrieved persons to formally intervene in litigation when their interests are at stake.   Kennedy countered by pointing to Missouri caselaw that suggests that neighboring landowners do not have a right to intervene in circuit court proceedings stemming from BZA matters (because, in her interpretation, the BZA is adequately representing the interests of the neighbors).  The court rejected her interpretation of those cases, and pointed to other Missouri cases, including the dissent of a case where intervention was denied, that imply that a landowner may indeed be able to intervene in a BZA case at the circuit court level if the motion to intervene is timely.

The Court of Appeals dismissed Kennedy’s appeal for lack of standing.

Missouri Courts, Procedural Issues, standing, Zoning board of adjustment , ,
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Breach of contract claim on development agreement could not be amended by trial court

by Melanie Thwing

Honeyager v. City of New Berlin
(Wisconsin Court of Appeals, March 9, 2011)

In 2005 William and Elaine Honeyager and WED Development, LLC entered into a development agreement with the City of New Berlin, WI. This contract included the Honeyagers constructing a sewage system for their eight lots. This system would also benefit seven other lots that were already developed. The City agreed to specially assess the owners of the seven developed lots and these proceeds would go to the Honeyagers.

The Honeyagers state that it was their belief the City would collect the 7/15 of the total cost which was approximately $38,000. In a signed affidavit by the Honeyager this number was understood after a neighborhood meeting that occurred prior to the contract being signed.

In the signed contract the city engineer says that the additional lots would be, “collectively assessed half of the cost of the sewer main and individually assessed for the full cost of the sewer laterals connecting their respective properties to the sewer main.” Ultimately the City chose a different method of assessment and the other property owners were only charged $19,000.

The Honeyagers then filed a civil lawsuit against the City claiming a breach of the duty of good faith and fair dealing in contract. In trial court the City moved for summary judgment which was denied. The Honeyagers choose to file a trial brief with proposed jury instructions. In the brief it was pointed out that rarely did the City choose this method of assessment and that the Honeyagers were charged close to three times as much per lot as the existing homes.  It was the Honeyagers’ argument that the City had a duty to assess each property in a way that would cause uniformity in assessments for the area.

Then the morning of the trial at the City’s request the court changed the Honeyagers’s claim from one of breach of contract to one forproperty overassessment. Following this the trial court dismissed the action claiming that they had not followed the proper procedures for filing an overassessment claim, which should have been brought under Wis. Stat. § 66.0703(12).

The Honeyagers then appealed. In Autumn Grove Joint Venture v. Rachlin the court found that trial courts could amend pleadings under Wis. Stat. § 802.09(1) and (2) so that they conformed to the evidence. This can only happen, however, if the issues are tried, and evidence presented by both parties. This cannot apply here because no issue was tried.

The Wisconsin Court of Appeals also looked at the Honeyagers’s trial brief to determine whether it effectively amended their action to an overassessment claim. The court also rejected this claim because after reading the brief it concluded that the Honeyagers merely aimed at illustrating the harm inflicted by the City’s bad faith by stating how the assessment was divided and how they were put at a disadvantage.  It did not constitute a change in the nature of the claim.  If the trial court had found the pretrial brief inappropriate it had the right to reject it, but not the authority to change the action.

The case was reversed and remanded for further proceedings.

Procedural Issues, Wisconsin courts , ,
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