Owner of fourplex forfeited right to continue as nonconforming use when two apartments remained unoccupied for more than one year

by Rachel Greifenkamp and Gary Taylor

Rodehorst Brothers v. City of Norfolk Board of Adjustment

(Nebraska Supreme Court, March 28, 2014)

The City of Norfolk, Nebraska zoning code includes the following provision with regard to nonconforming uses:

In the event that a nonconforming use is discontinued, or its normal operation stopped, for a period of one year, the use of the same shall thereafter conform to the uses permitted in the district in which it is located.

The Rodehorst Brothers partnerships owns a fourplex in Norfolk an area zoned R-2 for one and two family use. The fourplex is a legal, nonconforming use. In 2010 and 2011 Rodehorst applied for building permits to replace a roof, fix some electrical issues, and remodel the apartments in the building. The first two were granted by the building inspector but the third (apartment remodels) was denied because the inspector concluded that Rodehorst had forfeited its right to continue its nonconforming use of a fourplex because several of the apartments in the building had been unoccupied for more than one year.

Rodehorst appealed the denial of the permit to the City of Norfolk Board of Adjustment (Board), and also requested that they grant a use variance to allow the building to continue operating as a fourplex. Rodehorst argued that simply failing to rent out the apartments did not cause a forfeiture of the right to operate as a fourplex, and that it had been trying to “fix up” the building for years.  Rodehorst also argued that it would suffer an undue hardship without the use variance.  The City argued that the right to operate the building as a fourplex was forfeited because the apartments were unoccupied for more than one year.  The City further argued that the Board did not have authority to grant a use variance because the zoning code defines “variance” as “relief from or variation of the provisions of [the zoning code], other than use regulations, as applied to a specific piece of property, as distinct from rezoning.” The Board agreed with the City on both arguments, and Rodehorst appealed the decision to the district court.

At the district court Rodehorst employed the same arguments but went on to say that the Board’s ruling was an unconstitutional taking. The district court, however, affirmed the Board’s ruling in all respects.

Rodehorst appealed the decision of the District Court to the Nebraska State Supreme Court using the same three arguments as when it appealed to the District Court.

Right to continue nonconforming use.  Nebraska Revised Statutes provides that, with regard to nonconforming uses for cities of the first class, “if a nonconforming use is in fact discontinued for a period of twelve months, such right to the nonconforming use shall be forfeited and any future use of the building and premises shall conform to the regulation.”  The Supreme Court first noted that the choice of the word “discontinued,” as opposed to “abandoned,” is important.  Abandonment requires not only a cessation of the nonconforming use, but also an intent by the user to abandon the nonconforming use.  Where a legislature or other zoning authority has used the word “discontinued”…instead of “abandoned” their purpose is ‘to do away with the need to proved intent to abandon.'”  This squares with the plain, ordinary meaning of the term “discontinue,”  and is consistent with the notion that nonconforming uses are disfavored because they reduce the effectiveness of the zoning ordinance, depress property values, and contribute to the growth of urban blight.

Rodehorst argued that the nature and characteristics of the building control; in other words, that the building is and always was divided into four separate living units.  The Court disagreed. After reviewing cases from several other jurisdictions, the Court concluded that

The degree of occupancy is the critical factor in determining whether a multifamily dwelling nonconforming use remains in effect, while the existing characteristics of the building (such as separate units and features) generally go to whether the user intended to abandon the nonconforming use.  As noted earlier, intent to abandon is not relevant because [Nebraska] zoning laws speak in terms of discontinuance….Thus, the degree of occupancy of the building is the central inquiry.

Noting that “this is not a situation where the discontinuance was involuntary” but rather that no effort had been made to rent the apartments for a number of years, the Court ruled that “a discontinuance period will run where the landlord did not really try to rent the premises.” Thus, the Court affirmed the district court on this argument.

Authority to grant use variance.  Citing the relevant provision of Nebraska Revised Statutes, which allows for the grant of a variance “when by reason of exceptional narrowness, shallowness, or shape of a specific piece of property…or exceptional topographic conditions” the Court denied Rodehorst’s argument for a use variance because the request was based on its desire to continue using its building as a fourplex, not because of any physical characteristic of its property.

Taking.  While acknowledging that discontinuance provisions may work a taking in some cases, the Court denied that such a claim could be sustained in this case.  Using the three-factor test from Penn Central, the Court concluded that (1) even assuming a 50 percent diminution of value, that level of loss generally does not equate to a regulatory taking; (2) Rodehorst bought the property when it was already a nonconforming use, and thus his reasonable investment-backed expectations should have been that he could continue it as a fourplex only so long as its use as such was not discontinued for a period of one year; and (3) the character of the governmental action – to gradually eliminate nonconforming uses over time – is a recognized good.

Abandonment of nonconforming use need not be established, but abandonment is evidence of discontinued use

by Gary Taylor

Moyer v. City of Des Moines Zoning Board of Adjustment
(Iowa Court of Appeals, May 29, 2013)

Don Moyer owns Hawkeye Motors, Inc. By 1997, Hawkeye Motors held title to multiple parcels of property on the corner of East 14th Street and Washington Avenue in Des Moines, including the lot located at 1433 East 14th Street (Lot 1433). Lot 1433 spans 20,500 square feet over two parcels and contains a 1652 square foot building originally built for auto repair.  From the time Hawkeye Motors purchased the property until 2006, the company either sold vehicles from Lot 1433 or leased the property to other tenants to sell or repair used cars. The lot was originally zoned as C-2, 2, which allowed used vehicle display. The city later rezoned Lot 1433 as C-1, a “neighborhood retail commercial district” that prohibits used vehicle display. On August 23, 2001, the city granted the property a legal nonconforming status for used auto sales and issued a certificate of occupancy to Hawkeye Motors to utilize the property as a “used automobile sales lot.”

Moyer held a used car dealer’s license issued to Hawkeye by the Iowa Department of Transportation that included Lot 1433, but allowed the license on the lot to lapse in 2004. In January 2006, Moyer leased Lot 1433 to Diaz Tinting, Inc. The city issued Leonardo Diaz a certificate of zoning compliance, which on January 10, 2006, authorized “building reuse from used cars to detailing and tinting.” The certificate provides: “No change of use may be made at this location unless a new Certificate of Occupancy is granted for such use and no change in this building or land may be made without first consulting the Zoning Enforcement Office.” In March 2007, Hawkeye Motors sold Lot 1433 on contract to Don and Gloria Moyer (his wife) personally, and issued the deed to the couple in 2011. During a property inspection by the city in January 2009, the enforcement officer discovered cars were being sold and repaired on Lot 1433. The city notified the Moyers six days later, and again in May 2009, that this parcel lost its legal nonconforming use status and consequently the auto sales and repair activities were unauthorized. The Moyers did not appeal either determination.  An April 24, 2010 inspection of Lot 1433 found continued illegal auto repair, and the city again notified the Moyers of “illegal business operations….”  When the Diaz Tinting lease ended one year later Moyer asked the city for a letter to the DOT stating that Lot 1433 was properly zoned for displaying and selling used cars. The city denied Moyer’s request. Moyer appealed the city’s denial, but the zoning board of adjustment upheld the city’s refusal.  Moyer appealed.

The Iowa Court of Appeals made the following statements regarding nonconforming uses on its way to upholding the decision of the zoning board of adjustment:

  • Sometimes intent to abandon may be inferred from a failure to apply for a license to carry on the nonconforming use.  [The same may be inferred] from amending the licensed use of the property.
  • Because [the Des Moines Ordinance] sets a time frame for determining when discontinuation of a property’s former use triggers the loss of its nonconforming designation, the city need not prove the owner’s intent to abandon. But intent to abandon presupposes discontinued use. Therefore, while proof of intent is not necessary to establish abandonment, an inference of the owner’s intent to abandon is relevant to nonuse.

The court concluded that because Moyer was without a dealer’s license to sell vehicles on the property, and his tenants had a certificate permitting the property’s repurpose to detailing and tinting, the board of adjustment could properly infer discontinued use as a used car display lot for at least six months [required under the ordinance] between 2006 and 2009.  Moyer attempted to distinguish between his 2001 “Certificate of Occupancy” and Diaz’s 2006 “Certificate of Zoning Compliance,” arguing that the latter could not revoke the former, and therefore could not be used as evidence of abandonment; however, the Des Moines zoning officer explained that the purpose of the Certificate of Zoning Compliance is “to document the change in use mostly for office use.” Both forms read substantially the same, including the requirement that “this certificate must be posted in a conspicuous place on the premises.” The court found that the board was entitled to rely on the 2006 certificate as circumstantial evidence the property no longer served as a used car lot.

Discontinued nonconforming use could be resumed within 1 year

by Gary Taylor

C. Line, Inc., vs. Malin and the City of Davenport
(Iowa Court of Appeals, December 7, 2011)

In February 1997, C. Line opened an adult cabaret business in Davenport called “Chorus Line.” In 2001, the City  adopted an ordinance providing for the licensing and regulation of “adult entertainment” businesses.  Two years later C. Line filed a petition in federal court claiming the ordinance was unconstitutional. This lawsuit was resolved in August 2004 when the parties entered into a consent decree that issued a license to C. Line, allowed for the sale of C. Line without loss of the license, and declared C. Line to be a pre-existing nonconforming use.

In 2008 C. Line voluntarily closed Chorus Line, and the business was evicted from its location by a forcible entry and detainer petition granted in favor of the landlord.  The following year the ownership of C. Line was transferred to Nadeem Mazhar, who applied to the city for a license to reopen the adult cabaret business in the same location as before, based on the pre-existing nonconforming use stipulation in the consent decree.  Dr. John’s Lingerie Boutique opened in the same building, however, in August 2008 under a retail business license.  Dr. John’s sells lingerie, shoes, and hosiery as well as novelties, movies, and magazines of a sexual nature.  Malin, the Davenport city administrator, performed a site inspection for the C. Line application, and after observing Dr. John’s advertising and merchandise, a letter – under the signature of the city’s chief financial officer – was issued denying C. Line’s adult cabaret license as violating the Davenport Municipal Code section prohibiting two adult entertainment businesses from being located on the same lot or within 500 feet of each other.  C. Line appealed under city administrative procedures that provided for the city administrator (Malin) to act as the hearings officer.  C. Line filed objections to Malin acting as the hearing officer and moved that he recuse or disqualify himself, but the objections were denied.

The city called one witness, an inspector, at the administrative appeal.  The inspector testified that by his observations Dr. John’s was an “adult store.”  He did not make any square footage measurements or county any inventory.  C. Line called several witnesses.  Among them, the store manager for Dr. John’s testified that at no point in time has the City of Davenport required the store obtain an adult entertainment business license. She further stated that several of the lingerie and novelty items could be found at similar retail stores, like Victoria’s Secret and Spencer Gifts.  The chief financial officer testified that he never inspected Dr. John’s and was basing the denial letter solely on information obtained from the Malin.

Following the conclusion of the hearing the Malin performed a follow-up inspection of Dr. John’s, and based upon his measurements, calculations, and direct observations of the store’s space and displays, the Malin concluded that Dr. John’s was an “adult store” and upheld the denial of C. Line’s adult cabaret license application. Malin made no attempt to address C. Line’s argument that it was a legal preexisting nonconforming use.  C. Line appealed to district court, and after a litany of procedural moves the district court ruled for C. Line on the ultimate land use issue.  Although appeals and cross appeals were filed, this brief focuses on the nonconforming use issue.

Pre-existing nonconforming use. It was undisputed that the express words of the consent decree provided C. Line with an adult cabaret license and the status of a preexisting nonconforming use. As such, C. Line was permitted to continue until legally abandoned. The court cited Davenport Municipal Code section 17.46.020, concerning abandonment:  “In the event that a nonconforming use of any building or premises is discontinued or its normal operation stopped for a period of one year, the use of the same shall thereafter conform to the regulations of the district in which it is located.”  The city argued the nonconforming use was abandoned either when C. Line ceased operations in November 2008 or when the forcible entry and detainer petition was granted in December 2008.  The court noted, however, that the city’s ordinance does not require any subjective intent, but effectively extinguishes nonconforming uses based solely on discontinuance of the use for a specified period of time.  Since C. Line voluntarily ceased operations in November 2008 and was evicted in December 2008, but sought to reopen in July 2009, C. Line did not stop using the site as an adult cabaret for over one year and did not lose its status as a legal nonconforming use under the Davenport Municipal Code.  The nonconforming use did not become the landlord’s upon eviction either, as the city suggested.  Although possession may have been transferred from C. Line in December 2009, C. Line reestablished possession of the land prior to the one-year expiration date.  This argument was premised on a finding that the nonconforming use “leapfrogged” to Dr. John’s, which was incorrect because Dr. John’s was not an adult store and the city had never recognized it as such.

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