Carruth v City of Etowah

The Tennessee Court of Appeals issued a new opinion last week on condemnation procedures. In this case, the city missed the boat. Proper procedure was not observed.

The case is Carruth v City of Etowah, and the city was intent on the demolition of a residential structure located within the city. Unfortunately, the city inspector failed to hold the administrative hearing which is normally required by state law, TCA §13-21-101 et seq. As is the case in many municipalities, if the structure could not be repaired with the expenditure of less than 50% of the value, it was subject to condemnation. The city inspector determined that it would cost more than 50%, but did not specify how much it would cost to repair or the total value. Furthermore, although he invited the owner to his office to discuss the issues involved, there was no true administrative hearing held in any event.

Once the city finally informed the property owner that he had 30 days to tear down the building, the owner filed suit and asked for a temporary injunction (within the world of certiorari procedure, this is usually referred to as a writ of supersedeas). The trial court issued the injunction (writ of supersedeas) and ultimately held a hearing, the proof, and concluded that there was insufficient evidence upon which to conclude that would cost more than 50% of the value of the property to repair.

In fact, according to the Tennessee Court of Appeals, the only testimony concerning the cost to repair was the estimate by the owner himself who testified that would cost approximately $2000 to fix it up entirely. The owner testified that most of the difficulties were cosmetic and could be repaired at little cost. The owner testified that the value the property was approximately  $20,000, although the city contested them by showing the appraised value the property was $7400. The court pointed out that even if it was $7400 as a correct value (which it seemed to doubt), 2000 was still less than 50%, and the cities determination of condemnation was therefore unfounded.

This case emphasizes two important points in condemnation procedure pursuant to the state statute. First, administrative hearing must be held or at least offered to the property owner. Failure to provide an administrative hearing, or again, simply offer one, maybe a violation of the owners civil rights, but more importantly, it will certainly make it difficult to support any findings that the property should be condemned.

Second, and many city codes departments overlook this issue, it is important to give an estimate of what the construction costs for repair might be, as it relates to the overall value of the property. There certainly have been some cases where the court has accepted a rough estimate that it would cost more than 50% for example to repair the property and as a result, the order of the administrative agency has been upheld. But it is far more reliable to give an estimate of the repairs, an estimate of the overall cost of the improvements on the property, and to calculate the relationship from that. For example, if the property is worth $150,000, and the repairs would cost $100,000, obviously then the cost of repairs exceeds 50% and the building may be condemned. But to simply say in the administrative findings that the cost would exceed 50%, without specifying either the cost of repairs or the value of the property, is much less precise and may lead to a reversal on appeal.

In my book, Legal Handbook for Tennessee Codes Officials, I devote an entire chapter (Chapter 6) to this issue. If you do any work in this area as a codes enforcement official, or if you're an attorney working in this area, it might pay to take a look at that chapter.

Growing Cities Sustainably

In the Spring edition of the Journal of the American Planning Association, four researchers from the United Kingdom published an article which essentially concludes, based on computer models of three different cities with three different levels of density, hyper-dense, moderately dense, and sprawling, that the compactness of the urban form has little impact on sustainability.

I certainly don’t have the academic credentials to critique the study, but it certainly seems to fly in the face of pure logic. On the other hand, when have human beings been accused of logical thinking?

Take a look at the article here.

Here's a brief newspaper account.

Is a homeless shelter a church?

In an interesting piece of litigation up in Lexington, Ky., a church is suing the city when the city revoked a permit to operate a homeless shelter in a business district. Much of the concern is raised by the neighbors, and the city took action revoking a permit it had originally issued. The city says it wasn't told the true nature of the use. Take a look at a local newspaper article. Here's the lawsuit itself.

The shelter houses 75 men and women from 7 pm until 8 am, seven days a week. However, it provides bible study session several times a week and traditional services on Saturday mornings.

Is it a church, or a shelter, or can they be the same?

Here in Tennessee, this question has already been answered. In Caps v Nashville Union Mission, the Tennessee Court of Appeals expressly held that the Mission was a church for purposes of the zoning regulations. In that case, the Tennessee Court of Appeals expressly concluded that the Union Mission, which  provides housing for literally hundreds of men and women each night in Nashville, was a church.

In this case, we find adequate material evidence to support the BZA’s conclusion that the mission is a church. The applicable definition of “church” was “a building set apart for public esp. Christian worship.” The record before the BZA included photographs of the pulpit and large chapel inside the Mission, which seats over 400 people. Chapel services are held at the Mission 365 days a year. In addition, crosses are displayed and engraved on the outside of the building. Although the Mission offers food, shelter, and other rehabilitative services to the public as well, an individual cannot take advantage of some of these services without attending chapel services. There are 13 ordained ministers on staff at the Mission, and 142,496 different individuals attended the Mission’s evening chapel services in the year prior to the BZA hearing. Approximately 120 individuals signed a petition which stated, “I attend regularly and consider the Nashville Rescue Mission my church.” Also, the Mission’s charter of incorporation, bylaws, and other documents were submitted which confirmed the religious nature of the organization.

This case was decided on Dec 3, 2008, before the adoption of the Tennessee Religious Freedom Restoration Act, TCA § 4-1-407. With that strong legislation now adopted in our state, the result in the Caps case is probably permanently reinforced. 

The interesting question is whether the same reasoning would apply if the church were in a suburban residential district?

Photo from the Lexington Hearld-Leader. Take a look at the paper's article linked above and the comments to get an idea of the controversy.

November 8, 2012 Update:

The Community Inn was given a stay of execution if you will when the local zoning board granted it another 4 months (through the winter) to remain open. The city and the inn are going to work together to find a suitable location for the use. Article here.

An Agent's Standing to File an Appeal

The Supreme Court of Nebraska decided an interesting variance case last May. The issue that makes the case interesting is the standing of the applicant for the variance. A group called Volunteers of America (VOA) applied for variances to build apartments for veterans in Omaha. The neighbors, Field Club Home Owners League, opposed application but the variances were granted. Field Club Home Owners League v. Zoning Board of Appeals of Omaha, 283 Neb. 847, 814 N.W.2d 102 (NEB 5/11/2012)

On appeal, the District Court affirmed the decision of the zoning board, and only after the decision was the issue of standing raised by the neighbors. The Field Club Home Owners League now argues that because VOA had no legally cognizable interest in the property, it lacked standing to file the appeal with the zoning board.

A party invoking a court's or tribunal's jurisdiction bears the burden of establishing the elements of standing. Here, it is true that the record fails to show that VOA has standing to seek the variances.

The Nebraska Supreme Court ultimately remanded the case for an evidentiary hearing concerning the standing of VOA. But it did discuss the standing issues.

A property owner obviously has standing to seek a variance from a zoning ordinance that, if strictly enforced, would adversely affect the owner's property rights or interests. And the majority of courts that have considered the issue also hold that a prospective purchaser under a purchase agreement subject to the grant of a variance or rezoning of the property has standing to seek the change. Similarly, courts have held that the holder of an option to purchase property has standing to apply for a variance when the holder is bound to purchase the property if the variance is obtained or when the property owner anticipated that the option holder would seek the variance to complete the sale.

The remand was ordered so as to give the applicant an opportunity to demonstrate that it did have some connection to the property.

The substantive rules articulated by the Nebraska Supreme Court certainly also apply here in Tennessee. Let’s think through some of the possibilities relating to the standing of an applicant for relief before a local Board of Zoning Appeals.

First, obviously the property owner, him, her, or itself may file the appeal.

Second, a contract vendee under a real estate purchase contract would have standing to file the appeal.

Third, the holder of an option to purchase property would have standing to file the appeal.

Forth, clearly the lessee of the property could file an appeal.

Fifth, the agent of any of the above parties could also file the appeal on behalf of of the owner, contract vendee, lessee or optionee. This fifth category of potential applicants probably needs to be a little more careful about demonstrating his/her agency.

Certainly in the case of an attorney, representing a client, the owner, contract vendee, optionee, or lessee, there is little difficulty. The attorney’s signature is a representation that he is signing on behalf of the appropriate party and should be sufficient.

But let’s suppose that some other agent signs the application to the board of zoning appeals. It could be the real estate agent, a contractor, an engineer, or some other third party. Is the simple signature of the agent sufficient?

That question gets a bit more difficult. In the absence of some verification from the owner, contract vendee, optionee, or lessee, there might be some question as to whether the agent is really acting at the behest of an appropriate party. Now, it seems to me, that not many people are going to apply to a board of zoning appeals for some kind of relief on behalf of another party unless they actually had been engaged to do so. My experience in these matters for over 30 years, bears that out.

However, it is certainly an opportunity for the opponents of the relief requested to raise what can be something of a difficult issue, especially here in Tennessee, where no additional proof is usually admitted before the trial court. Therefore, in the absence of some other rule, the failure of the applicant to demonstrate standing before the zoning board could be fatal.

Fortunately, Tennessee does follow a slightly different role. The party (in our case, the neighbors) contesting the standing of the applicant to file the appeal, must raise that issue before the board of zoning appeals or other administrative agency. If the applicant waits until the trial court, the issue is waived. City of Brentwood v Metro Board of Zoning Appeals, 149 S.W. 3d 49, 60 (Tenn. App. 2004). By the way, given this rule, it is not a bad idea for the representatives of either party (developer or neighbor) to raise the standing issue at the zoning board hearing. Sometimes, the other side may not be able to demonstrate standing and the case might be dismissed, or the opponent may simply fail to reply to the issue, raising the possibility of losing the issue on any subsequent appeal.

The Tennessee rule is a reasonably fair way to approach this difficulty. If the issue is raised in front of the board of zoning appeals, presumably the applicant will have the ability to demonstrate that he or she is the agent for the owner or other qualified person. If the agent cannot do so, then the board can simply deny the application for lack of standing.

If however, the opponents could wait until after the hearing before the board of zoning appeals, and raise the issue of standing in the trial court for the first time, where as I say, ordinarily no additional proof is permitted, then it would be impossible for the applicant to demonstrate to the court vendee there was standing.

It’s been about 15 years back now, but in a case here in Nashville, Jacksonian Foundation v Metro Board of Zoning Appeals, that very issue was brought up. A real estate agent had signed the application for the variances necessary with the board of zoning appeals on behalf of the ultimate lessee, Walgreens. Through that relationship, the agent was also acting on behalf of the owners of the property.

The issue regarding standing was not brought up at the hearing before the Board of Zoning Appeals. It was not until the case reached the trial court, that this issue became important. Ultimately, the court concluded that the agent clearly had appropriate authority, because several letters in support of the variances had been written by the owners, at least one of the owners was in the audience at the time of the hearing before the board of zoning appeals, in support of the application. As a result, the trial court affirmed the decision of the board of zoning appeals. No appeal was taken from this decision.

By the way, this is also interesting case to me in that it is one of the few variance cases over the years that I have seen where there is definitely an exceptional physical feature of the property justifying the variance granted by the board of zoning appeals. Far more often, there is a distinct lack of any exceptional physical feature of the land. Here, the narrowness of the lot distinguished it from all the surrounding properties and made construction of a commercial retail establishment most difficult without the benefit of the variances as applied for.

As a final thought, given agent, other than attorney, is representing the owner, contract vendee, optionee, or lessee of a piece of property, is not a bad idea to have a letter written from the party was standing expressly granting the agent the power to file the application and proceed with the appeal. Such a letter should easily satisfy this issue of standing so that the applicant need not worry about it further. Some zoning boards have requirements that such letters or affidavits be submitted at the time of the filing of the application.

Upcoming seminars . . .

I will be making several seminar presentations over the next six months or so, discussing land use planning and zoning legal issues.

On November 13, 2012, we will be discussing "Legal Issues involving Local Governments," here in Nashville. I will briefly discuss some of the basic issues relating to land use and zoning in Tennessee.

Then on December 11, 2012, Sam Edwards, Bryan Echols, and I will present a daylong seminar entitled, “Practical Guide to Zoning and Land Use Law.”

 Both of the seminars should be fun. There are some interesting new cases to discuss as well as the continuing potential impact of the Tennessee Religious Freedom Restoration Act, Tenn. Code Ann. § 4-1-407.

For more information on the seminars, please visit the NBI website.

Historic South High School in Knoxville

In what seems to be a replay of the Ransom School issue here in Nashville, the city of Knoxville is gearing up to enforce its “Demolition by Neglect” ordinance with regard to a school building known as “South High.” Just as in the Ransom School case, the government sold the property to the developer, but of course at just the time when the economy hit the skids. While the developer evidently had plans to rehabilitate and preserve the building, the economy delayed his construction efforts and the city now is threatening (and indeed has now taken official steps) to take over the building and do whatever is necessary to preserve the structure.

While certainly I know nothing of the historic nature of the building, and I assume for purposes of my observations here, that there is some historic value to the preservation of the structure. But as I have said many times, usually, the best chance for the preservation of any historic structure is government ownership. First and foremost that is because the government is immune to its own regulations. Take a look at most of your schools: in many communities, probably most, they’re not permitted by the zoning ordinance in the location where they were constructed.. They are immune from it. Here in Nashville, we have a very large football stadium, and it too is immune from the local zoning because it was built by the city.

That is a tremendous advantage. If you don’t have to comply with the zoning regulations, as most cities and counties do not, then it is easy to find a use for any property. Because you don’t have to worry about the kinds of regulations that hamper most small businesses.

In the Ransom School case, Metro Nashville rezoned the property on the same day that they accepted the bid of the developer to pay $1 million for the property. The rezoning was no big deal – it only removed one-third of the developmental potential on the property without giving any notice to the developer with whom the city was negotiating. And then, when the developer asked the Historic Zoning Commission for some help in finding a reasonable way of developing the property so that it would not lose his shirt (essentially by removing some components but not all of the historic structure), the HZC refused. The Tennessee Court of Appeals reversed fortunately finding that there was no evidence in opposition to the developers contention that it would lose almost three-quarters of a million dollars if some relief was not granted. Ultimately, the entire building was razed.

In this instance as well, the government applied the historic zoning designation after it sold the property to the developer. I’m not familiar with the details (this website gives a brief overview); it may be that the historic zoning designation was largely irrelevant and prevents little difficulty to the developer. But certainly in the Ransom School case, the zoning change by the city restricting the development potential had a tremendous impact on the return of the developer’s investment. One can’t help but wonder if the same thing is not true under the circumstances of this Knoxville case.

It has gotten to the point where it seems to me that before a developer purchase a property like this from a local government, an agreement should be entered into which expressly allows demolition of the structure. Otherwise, the developer remains at risk: the government can change the terms of the agreement at any point by simply amending its regulatory provisions with regard to that property. Otherwise, it is difficult for the developer to protect his investment.

Memphis UDC

The controversy over the amendments to the Memphis Unified Development Code [zoning code] appears to be winding down. On July 17, 2012, the Memphis City Council approved most of the suggested amendments, and added a few of its own. For the most part, the changes to the UDC, originally adopted in 2010, are fairly minor, and designed to add flexibility to the regulation and administration of the zoning regulations. There certainly has been some opposition, quite vocal at times, but generally the recommendations of the Planning Director, Josh Whitehead, seemed to have been accepted by both developers and neighbors. In particular, there were negotiations with the neighborhood interests to reach a compromise; those negotiations seem to have been very successful.

The County Commission must also approve the proposed amendments. The UDC is used throughout the County, not just within the jurisdiction of the city. Take a look at the article from the Memphis Commercial Appeal.

More about the CL writ . . .

Most of the time, I have the feeling that I am almost the only person around who has any interest in the common law writ of certiorari, the means by which to appeal almost any land use planning controversy to a court of law or equity.

Last week, although we certainly didn't need the reminder, the Tennessee Court of Appeals once again made clear that a failure to verify the petition for writ of certiorari is fatal. In Depot Property v Town of Arlington, a case that we have looked at before, 2011 WL 334472, 2011 Tenn. App. LEXIS 34 (Tenn. Ct. App. Jan. 31, 2011), the original Court of Appeals decision was appealed to the Tennessee Supreme Court, and the court granted permission to appeal but only for the purpose of remanding for consideration of Bd. of Prof’l Responsibility v. Cawood, 330 S.W.3d 608 (Tenn. 2010).

The case returned to the Tennessee Court of Appeals, and after further briefs and arguments, the court dismissed the case for lack of jurisdiction. We have spoken of this issue several times before, but it cannot be emphasized enough: when filing a petition for writ of certiorari, the facts in the petition must be sworn, and the petition must state that it is the first application for extraordinary relief. TCA §27-8-106.

Before we get too far into the case and its holding, let me mention something that I mentioned in the original posting about this case: it looks to me that the case should have been decided on a declaratory judgment action, not the common law writ. As a result, the second Court of Appeals decision while interesting is possibly applied in the wrong circumstance.

It turns out that the petition in the Depot Property case was not sworn, and it did not state that it was the first application for extraordinary relief as required. Since at least 1955, the Tennessee courts have recognized that without meeting these two requirements (among others) there is no subject matter jurisdiction in the courts, and the case must be dismissed.

As often happens in these cases, the petition was signed by the petitioner, and the signature was notarized indicating that the correct person actually signed the document. However, that is not the import of TCA §27-8-106. The statute requires that the affiant indicate that he or she is familiar with the facts and that they are true to the best of his or her knowledge. There was no such indication here. The notary only notarized the signature; there was no indication that the facts alleged in the petition were true.

Further, the statute clearly requires that the petition also allege that it's the first application for extraordinary relief. Again, in this case, there was no such allegation.

While the attorneys for the petitioner attempted valiantly to argue that those requirements were discretionary, they are clearly required and as a result the Tennessee Court of Appeals dismissed the case for lack of subject matter jurisdiction.

So, while I am on my soapbox, let me go on to add that these statutory requirements make no sense in the context of land use planning disputes. I'm sure somewhere back in antiquity, the requirements served a particular purpose. But certainly in the context of land use planning and zoning, there is no need to have anyone swear to the allegations of the petition. In fact, of course, in most pleadings these days, verification is not necessary. And specifically in the area of land use planning law, in cases such as this, the facts are all pretty well agreed to by both sides. Normally, the real legal issue involves the conclusions to be drawn from the facts.

Last year, a bill was introduced before the Tennessee General Assembly, which would have enacted into law the Tennessee Land Use Review Act, which would've done away with all of these acute requirements in the context of land use planning cases. Unfortunately, the four major cities in Tennessee opposed the adoption of the act; you see, it helps them to keep it more complicated. When a lawyer for the property owner makes a mistake, the government gets off scott free. there's no review because there's no subject matter jurisdiction, even if the decision of the administrative body was clearly erroneous. So it behooves the four major cities to oppose any change.

Perhaps this case will serve as a rallying call, to encourage the General Assembly to pass a simpler and more reasonable method of filing administrative appeals in the land use and zoning context.

But in the meantime, if you are filing a petition for writ of certiorari, be sure that the affiant swears or affirms that the allegations are true, and that one of the allegations is that the petition is the first application for extraordinary relief. Otherwise, the petition is subject to being dismissed for lack of jurisdiction.

Federal Order Allows Mosque to Open

Federal District Court Judge Todd Campbell ordered yesterday that the Islamic Mosque in Murfreesboro be permitted to open in time for Ramadan. As has been widely reported before, the mosque was about 98% complete, but unfortunately the Chancery Court in Rutherford County had previously issued an order prohibiting occupancy, based upon that court's conclusion that the Tennessee Open Public Meetings Act, TCA §8-44-101 et seq., had been violated.

Of course, any violation of the act was not attributable to the Mosque. In fact, the Islamic Mosque had complied with each and every requirement of the County government. At the same time, the County's hands were tied by the Chancery Court order.

Judge Campbell had little difficulty concluding that there was a substantial burden under the terms of the federal RLUIPA, and that a temporary injunction should issue.

The continuing appeal up to the Tennessee Court of Appeals will present the interesting issue of what is "adequate notice" under the terms of the Open Public Meetings Act. Although in the past, I have always felt that the act requires only the bare minimum in terms of notice, Chancellor Corlew in Rutherford County obviously felt that more was required under the circumstances of the Islamic Mosque case. The Court of Appeals decision may at least clarify some of those issues.

It is however certainly appropriate that the Mosque can open in time for the religious holiday, especially when it is clear that the Mosque complied with all the requirements of the law.

A copy of the Rutherford County Chancery Court decision may be found here.

Appeals are never easy . . .

Sometimes it just doesn’t pay to even make the effort. While I have been a frequent critic of the hypertechnical requirements of the common law writ of certiorari here in Tennessee, as a means by which to appeal zoning and planning decisions, we Tennesseans certainly don’t have the worst of it. In a recent case from Massachusetts, the applicants gave notice of their intent to appeal, and sent the complaint and other papers by first-class mail to the court. Unfortunately, the envelope was misaddressed and it did not reach the court until approximately 2 weeks after the filing deadline (only 20 days Massachusetts). Evidently, if the documents had been sent via registered or certified mail, under Massachusetts law, they would have been deemed filed as of the date of mailing; but because the documents were sent by first-class mail, they were not deemed filed until actually received by the court. As a result, the appellant missed the statute of limitations, and the case was dismissed. The Court of Appeals upheld the decision, even in the face of a concession by the planning board that there was no prejudice to it by virtue of the late filing.

Perhaps my criticisms of the Tennessee procedure are too strong: certainly, other states have their own foibles in the area of administrative appeals.

Valley Comm. Dev. Corp. v. Ogulewicz, 2012 WL 1720178N (Mass. Land. Ct. 5/12/2012)