Friday, August 12, 2016

Vested Rights: Neighbors of Old Hickory v Ind Land Develoers

As I have mentioned previously on this blog, the Tennessee Vested Rights Act became effective on January 1, 2015. So far as I know there have not been any appellate court decisions and I am unaware of any trial court decisions except for a case recently decided by the Davidson County Chancery Court, Neighbors of Hickory v Industrial Land Developers, a case which involved an application for permits to operate a rock quarry on Burnett Road in Davidson County. I should mention that I was involved in this case.

I won't go through all the facts, but suffice it to say the property owner made early contact with representatives of the Metro Codes Administration, to make sure that the zoning was appropriate for the rock quarry, and then in the early part of 2015, submitted an application for a building permit for certain accessory structures related to the operation of the quarry. In connection with that application, a development plan was submitted showing the phases of the development, access points, surrounding land uses and the proposed construction.One of the arguments of the neighbors was that the building permit application did not list the quarry as a land use, but this argument was certainly much less significant given the fact that there was correspondence between the owner and Codes detailing exactly what the owner planned to do and making sure that the zoning was appropriate.

Further, after obtaining the building permit, but before the buildings were completed, the property owner also submitted an application for a use and occupancy permit which was issued, specifically for the quarry. Temporary occupancy permits for the buildings were issued another month later, and about six months after the original applications were made, the Metro Council changed the zoning in an effort to prevent the quarry from opening.

The trial court concluded that the owners had used a "belt and suspenders" approach to vesting their rights: both the building permit and the development plan were sufficient, standing alone, to vest the rights from the perspective of the Judge.

The plaintiffs had argued that the failure of the building permit to reference the land use activity (rock quarry) prevented the application of the Vested Rights Act. Although the court did not address this in particular, it certainly found that both the building permit and the development plan were sufficient standing alone and thus impliedly rejected that argument.

There was a secondary argument concerning who had the burden of proof. The plaintiffs, adopting the standard from non-conforming use case law, suggested that the party asserting vested rights had the burden of proof. The court, in what I think is a very appropriate methodology, concluded that while the initial burden might be on the party asserting vested rights to prove that either a building permit or a development plan was approved, that the burden would then shift to the challengers to demonstrate some reason why the permits or plans were not appropriate in order to defeat the application of the statute.

Finally, running through parts of the plaintiff's argument was that for certain kinds of out-of-doors activities, rock quarries, landfills, agricultural uses, the Vested Rights Act did not apply because there is really no way to obtain a building permit for one of those types of uses. Further, the plaintiff suggested that even though accessory construction might be necessary, that the relatively small size of the accessory construction vis-à-vis the size of the principal use made it inappropriate to apply the act under such circumstances. Again, the court did not directly rule on this argument. However, there's no authority within the statute to conclude that any type of a building permit would not vest the rights to proceed, and if the rights could not vest on those types of uses, rock quarries, landfills, and others, the Vested Rights Act might be of little use. It is those very controversial types of land uses which require protection of this kind.

This case is a great example of the problems that property owners frequently encounter. As soon as it became known that a quarry was being proposed for this property, activity began to change the zoning on the property to prohibit that use. From my perspective, dealing with my clients, usually, we are glad to meet whatever requirements have been set up by the local government. What makes things difficult is a change in the rules once the application has been submitted. And that very often is exactly what happens. As soon as it became known that the rock quarry was being proposed, immediate action was taken to change the zoning. While this is perhaps understandable, it makes it very difficult and risky to engage in land development under such circumstances.

There's no word on appeal at this time.

The trial court opinion may be found here.

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