Whitson v La Vergne Board of Zoning Appeals

This interesting case, decided in May 2020, involves the issue of vested rights. A seemingly minor problem brought the case to court; the owners of a carwash applied for a building permit intending to convert the business to car sales. The permit was issued, indicating the ultimate intended use, and in fact, the planning director wrote a letter in order to facilitate approval by the Tennessee Motor Vehicle Commission for the business operation. The doors were replaced as provided for by the permit at a cost of approximately $14,000.

However, after operations began, the city notified the owner of the property that site plan approval had not been obtained as required. The property owner appealed to the board of zoning appeals which affirmed the decision requiring site plan approval.

The decision of the zoning board was appealed to the trial court which upheld the zoning board decision and the case was appealed to the Tennessee Court of Appeals arguing that the property owner had vested his rights in the use of the property and/or that the city was equitably estopped from enforcing the site plan requirement.

It is difficult to understand what the real issue might have been in this case. I am puzzled on two levels: first, why did the owner of the property not want to go through site plan review?* Even though, as I will mention below, site plan under these circumstances makes little sense, surely it would have been quicker and cheaper to go through site plan review instead of filing an appeal with the zoning board, appealing that adverse decision to trial court, and then appealing the trial court decision to the Tennessee Court of Appeals. I am left with the feeling that there was likely some dedication requirement which the applicant was trying to avoid.

Second, why is this case going through site plan review anyway and why is a public hearing necessary? Judge Bennett, writing for the court, cited §3.110 of the Zoning Ordinance for the proposition that applicants for a building permit must also submit scale drawings in conformance with the site plan provision. But here’s the full quote:

The purpose of this provision is to prevent undesirable site development which would unduly create inadequate circulation and unnecessary congestion; to obtain maximum convenience, safety, economy and identity in relation to adjacent sites; and to provide maximum flexibility for expansion, change in use and adapting to individual needs. Thus, applicants for building permits must submit scale drawings, according to the particular types of development proposals, to the La Vergne Municipal Planning Commission in accordance with the following procedures.

The first sentence of the quoted material makes clear that the purpose of site planning is to prevent undesirable site development basically to prevent inadequate circulation and unnecessary congestion onsite (and this is the best way to understand what site plan review is). But in this case, the building was to remain. There’s no evidence in the Court’s opinion that the building was being modified except by replacement of some doors. So, why is site plan necessary when the structures on the site are not being moved or otherwise changed? Site plan review under the circumstances seems totally unnecessary. Again, one wonders what was really going on.

For example, there is a requirement for sidewalks to be dedicated or an exaction to be paid in the site plan provisions. Perhaps the property owner balked at paying for sidewalks or dedicating the property necessary for sidewalks. This is understandable: in the case of a property where there is little or no change in the overall development, paying for sidewalks seems a violation of Nollan v California Coastal Commission, one of my favorite cases. I will have more to say about that in future posts.

Along the same lines regarding site plan review, the court drops a footnote on page 5, quoting the Director of Codes, as stating at the BZA hearing, that the codes department can’t authorize a change in use by issuing a building permit. But that dodges the real question: can the planning commission authorize a change in use by issuance of a site plan? Site planning should be zone district agnostic: that is, the Planning Commission doesn't get to consider whether the use is a good one or not. Many cities authorize changes in use merely by the issuance of a building permit and/or a site plan approved by Codes without a hearing. There is no requirement in most instances to go to a hearing before the Planning Commission for site plan review. A related question is why does site plan consideration require a public hearing? Approval of building construction plans is done by the codes employees without such a hearing usually; why is site planning different?

Now, it is understandable if there is new construction on the property. But based on my reading of the case, other than the replacement of the doors there was no new construction. Again, site plan review seems to have very little to do with this process. Certainly, something else must’ve been going on.

The actual analysis in the case is fairly straightforward.

As a general rule, the issuance of a building permit results in a vested right only when the permit was legally obtained, is valid in every respect, and was validly issued. Capps v. Metro. Gov’t of Nashville & Davidson County, 2008 WL 5427972, at *10 (Tenn. Ct. App. Dec. 31, 2008). 

Because site plan review was a prerequisite to the issuance of a building permit, the issuance of the building permit without Planning Commission approval was invalid and therefore the building permit itself was invalid. This rule is well accepted, at least up until 2015.

In 2015, Tennessee adopted the Tennessee Vested Property Rights Act, Tenn. Code Ann. § 13-4-310 (b)-(k). That act provides:

A vested property right shall be established with respect to any property upon the approval, by the local government in which the property is situated, of a … building permit allowing construction of a building where there is no need for prior approval of a preliminary development plan…”

Two observations on this language: first, site plan review in most communities does not qualify as a “preliminary development plan” as defined by the statute. So, a vested property right is established upon the issuance of a building permit.

The second observation concerns the real question in a case like this: whether it is protected by the Tennessee Vested Property Rights Act. Yes, we know that a building permit which was erroneously issued prior to 2015 basically is a nullity and accomplishes nothing. But given the legislative wording of the new act, does that same rule carryover? The act does not address this particular issue and so far, there’s been no case asking for resolution of the question. Frankly, I suspect that the same result obtains: that is that an invalidly issued permit is worthless and does not vest any rights at all. But, having said that, we knew that was the case before 2015; it would be nice to have a clarification by way of an interpretation of the new language in the new act. Is a building permit which is issued erroneously after the adoption of the Tennessee Vested Property Rights Act still null and void, or does the language quoted above from the act change the result? We will have to wait for another case to find out.

The next issue brought up in the case is the matter of equitable estoppel. Once again, this issue has been litigated many times. As the court noted, the doctrine of equitable estoppel in Tennessee does not apply generally to the acts of public officials or public agencies. So, the issuance of a building permit which was done wrongfully or erroneously, statements made by public officials to a building permittee, that they don’t need to get anything else or do anything else, do not help the permittee to win its case. And if you think about it for a few minutes, it makes perfect sense: if the person on the front desk who issues the building permit to the applicant, can make a mistake and issue a permit for commercial use in a residential district, or mistakenly represent to a building permit applicant that a commercial use may be used at such and such a location which just happens to be a residential district, in effect what has happened is that the codes employee has changed the zoning on the property without consideration not only of the supervisors in the codes administration, but also the members of the city council. Clearly, absent very unusual circumstances, the codes employee issuing the permit cannot bind the local government to something which has not been approved by the local legislative body.

This only serves to emphasize that an applicant seeking permission to build needs carefully to review the relevant regulations and make an independent determination concerning the validity of any requested permit. A mistake by the government won’t affect the government; it only will hinder the applicant’s plans.

This is a very interesting case, perhaps more for what it doesn’t say than for what it does.

*Addendum: Just as I was about to post this entry, I spoke with one of the attorneys involved in the case and evidently between the time of the issuance of the building permit and the time of the appeal to the zoning board, another car lot located in the same general area so that a distance requirement within the zoning ordinance was triggered preventing the use of the property as a car lot. That means that unless this petitioner could demonstrate vested rights, the newer car lot would prevent him from obtaining site plan approval. Again, this result would make much more sense if site plan review had been important under the circumstances of the case.