Automatic Approval Provisions, State and Local: Which Governs?

Both the state enabling legislation and local ordinances and regulations often have provisions which mandate automatic approval if the appropriate board or commission has not acted within a specific period of time. Recently, I was involved in some litigation in which the question of whether a local provision, adopted several decades ago, applied to the development or whether the state statute, which had been changed in the meantime, applied. Ultimately, it was unnecessary to decide this issue but remains an interesting question. Many local ordinances fail to update these provisions as the state changes the language of the statutes. This may be most often caused by the relatively frequent changes in the state legislation. Sometimes it's hard to keep up even if you practice in this area of the law every day.

Perhaps an example would be helpful. Currently, Tenn. Code Ann. § 13-4-304, provides that a municipal planning commission "shall approve or disapprove a plat within 60 days after the initial consideration of the plat by the commission meeting in a regularly scheduled session…"  The local regulation reads as follows:

The Planning Commission shall hold a hearing as required by Section 13-3-404, Tennessee Code, on each final plat brought before it. The Planning Commission shall, within sixty (60) days after submission of the plat, approve, modify, or disapprove the final subdivision plat by resolution, which shall set forth in detail any conditions to which the approval is subject, or reasons for disapproval. In no event shall the period of time stipulated by the Planning Commission for completion of required improvements exceed one (1) year from the date of final resolution. 

Failure of the Planning Commission to act upon a plat within the prescribed time shall be deemed approval of the plat, and in such event, a certificate of approval, entitling the subdivider to proceed as specified in Subsection 2-104.4 and Section 2-105, of these regulations, shall be issued, upon demand, by the secretary of the Planning Commission. The applicant, however, may agree to an extension of the time for Planning Commission review.

 Notice the difference in the highlighted provisions. The state statute now requires that the plat be approved or disapproved within 60 days after an initial consideration. The local regulation however requires approval or disapproval within 60 days of submission of the plat. Obviously, the plat might be submitted to the planning staff as early as, for example, 45 days before the planning commission hearing. Thus, the planning commission would have to make a decision almost right away without any extension, unless the applicant agreed.

Does the local regulation apply or does the state statute apply? So far as I know there is no case law here in Tennessee concerning this issue and while I have seen some law review articles reviewing the automatic approval provisions, I have never seen this particular issue addressed. My own guess is that the local regulation would prevail. The Tennessee Municipal Planning Statutes, particularly Tenn. Code Ann. § 13-4-303, make clear that the planning commission must adopt regulations governing the subdivision of land within the jurisdiction. There wouldn't seem to be any reason why the planning commission could not make the timeline for approval of subdivision plats more strict. On the other hand, Tenn. Code Ann. § 13-4-304 begins by saying "the commission shall approve or disapprove a plat within 60 days after the initial consideration of the plat by the commission…". The language there is not merely enabling, but directory. 

While it's hard to know the final answer, the authorization to grant variances under Tennessee state law is also directory. Tenn. Code Ann. § 13-7-207 (3). It seems however that the local legislative body could adopt additional standards for variances so long as they don't outright conflict with state law and the adoption of more restrictive standards would seem to be appropriate. Some commentators have argued that any change by local authorities is ultra vires the enabling legislation, but that seems unduly restrictive. Many local governments add restrictions to the variance standards found in the statute. For example, many ordinances provide that financial returns may not be the sole consideration for granting a variance, and/or a local provision might mandate that the hardship must not be self-created. These restrictions have been recognized by Tennessee courts in construing the statute, but are nowhere to be found in the express provisions of the variance statute. It seems however appropriate that the local government could impose additional provisions which did not conflict.

Following that chain of thought, it would seem therefore that a subdivision regulation adopted which is more restrictive than provided by the statutory authorization itself would also be appropriate. It is interesting question, and perhaps some one of these days, will get an appellate court opinion providing an answer.

NBI: List of Recent Cases

List of Recent Cases

National Business Institute Seminar:

Land Use and Zoning: Working with Local Governments

Nashville, Tennessee

August 5, 2020

Hirt v Metro Nashville, 542 S.W. 3d 524 (Tenn. App. 2016) (Hirt I); 2020 WL 1983766 (Hirt II) (petition not verified/res judicata)

Keith v Maury County BZA, 2019 WL 3946171 (Tenn. App. 2019) (petition not verified)

Cobble v Greene County, 2019 WL 3450930 (Tenn. App. 2019); see also McClurkan v Metro BZA, 565 SW 2d 495 (Tenn. App. 1977) (leading variance cases in Tennessee)

Precision Homes v Metro Nashville, 2019 WL 2395946 (Tenn. App. 2019) (stormwater management variance)

Owen Trust v Germantown, 2019 WL 2233886 (Tenn. App. 2019) (appeal from Planning Commission decision regarding zoning change)

Venture Holdings v Metro BZA, 585 S.W. 3d 409 (Tenn. App. 2019) (conditional use permit denied and upheld on appeal)

Ward v Metro Nashville, 2019 WL 1753053 (Tenn. App. 2019) (Tennessee Religious Freedom Restoration Act, Tenn. Code Ann. § 4-1-407)

Home Builders v Metro Nashville, 2019 WL 369271 (Tenn. App. 2019) (affordable housing)

Roland Digital Media v City of Livingston, 2019 WL 117582 (Tenn. App. 2019) (petition deficient for failure to name board as party)

Dunlap v Tennessee Board of Professional Responsibility, 595 S.W. 3d 593 (Tenn. 2020) (ethically challenged behavior in context of land use case)

Keith v Maury County Board of Zoning Appeals

This case will take little by way of analysis. Once again, we have an appeal from a decision of a local Board of Zoning Appeals, styled a petition for writ of certiorari, but which is not verified, that is, sworn to by the petitioner.

The law is clear: in the absence of verification by the petitioner within 60 days of the decision of the local board or commission, the local courts have no jurisdiction to entertain the claim. Thus it was in this case.

I have often lamented this requirement feeling that it is totally unnecessary and should be deleted by the simple expedient of adopting a new state procedure for appealing land-use decisions. Many other states have done this. I attempted to introduce legislation a few years back to accomplish this result, but it seems that there are a number of large cities which have some success in dismissing a number of cases which are not verified. Thus, there was opposition to the idea of doing away with the requirement.

Obviously, if the verification requirement added something to the process, that would be one thing. But in these cases, almost all the facts are known to everyone. Rarely is there any dispute about the facts in cases of this type. The real question is whether the facts as stated allow for the issuance of a variance, conditional use permit, or other relief which may be provided by the local zoning ordinance. The verification requirement has no impact on that question, and legislation allowing for land-use appeals without the verification requirement should be adopted by the Tennessee General Assembly.

Having said that, the zoning board decision in this case was most likely correct. The applicants were attempting to engage in activities which were not permitted by the zoning ordinance at their property; the zoning administrator notified them of the violation and they attempted to appeal his decision unsuccessfully. Most likely, even if the court had heard the case, it would have ruled against them anyway.

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.

Tennessee Public Participation Act, Tenn. Code Ann. § 20-17-101 et seq.

During its last session, the Tennessee General Assembly adopted the Tennessee Public Participation Act, Tenn. Code Ann. § 20-17-101, et seq. This new provision is much broader than the original Anti-Slap Act which was passed in 1997, Tenn. Code Ann. § 4-21-1001. The older act offered limited protection for communications with public entities. The recent legislation allows the defendant public participant (a neighborhood organization for example) to file a motion (the act actually calls it a petition) to dismiss and the case against the public participant may be dismissed if the legal action is based on that party’s exercise of the right to free speech, right to petition, or right of association. I won’t describe the burdens of production and persuasion further. My interest is to briefly look at this act in relationship to land-use appeals brought under the common law writ of certiorari.

Recall that the certiorari statute requires the administrative tribunal and “other parties of record” be named as respondents in the petition for writ of certiorari. Tenn. Code Ann. § 27-9-104. This term, “other parties of record” has never been defined precisely, and it is unclear as to whether neighbors opposing a particular development are parties of record. I have generally used a rough rule of thumb that I will bring in a neighborhood group which has hired an attorney to represent it before the zoning board or planning commission. Perhaps the neighborhood organization is not a party of record, but the fact that they cared enough to retain counsel is indicative of a desire to participate in the process.

But suppose after naming and serving the neighborhood organization, the neighborhood organization sues under the Tennessee Public Participation Act. The act is so new, it is hard to understand how these two statutes may interreact. Let me make just a couple of observations.

First, legal action is defined by the TPPA as a claim, cause of action, petition, cross-claim, or counterclaim or any request for legal or equitable for relief initiated against a private party. Tenn. Code Ann. § 20-17-103 (5). Since a petition for writ of certiorari does not usually state a legal or equitable claim for relief as against any neighbor or neighborhood group, only against the local government and its administrative board the relief sought is usually a reversal of the decision of the administrative body (and attorneys fees if applicable), it is not clear that a neighbor brought into a cert proceeding can file a motion to dismiss under the TPPA. In fact, under Tenn. Code Ann. § 27-9-110, if a respondent is named in the petition, and that respondent does not desire to defend the case, the respondent does not need to do anything, including filing an answer. No adverse consequences will flow from this failure to respond. Remember too that the answer does get filed until 30 days after the filing of the transcript, which would give a neighborhood a chance to look at the transcript and make a decision as to filing an answer after receipt of that document.

Second, perhaps prior to filing the petition for writ of certiorari, counsel for the appealing party should contact the attorney for the neighborhood organization and simply ask if they want to be involved. If not, the neighborhood organization is not named, and if there is a complaint later, (for example, after the appealing party wins and the decision of the local administrative body is reversed), where the neighbors argue that they should have been involved and that the judgment is invalid as a result, the communication with the attorney for the organization may be enough to demonstrate that the neighborhood organization waived its right to participate.

Another option for the petitioner, would be to file against the local government and its administrative body, and only give notice of the appeal to the neighborhood organizations. The neighborhood group if it so desires could petition for leave to intervene after such notice. See Tenn. Code Ann. § 27-9-110(b).

Third, an interesting component of the TPPA is that discovery is stayed upon the filing of a petition to dismiss until the court rules. Tenn. Code Ann. § 20-17-104(d).  This might be a disadvantage in most cases, but in certiorari proceeding there is little to no discovery in any event, and so an automatic stay of discovery has little to no bearing on the proceedings of the litigation.

Frankly, I don’t see that there is any reason for a neighborhood organization to file a petition to dismiss under the TPPA in response to a common law writ of certiorari. But it has already happened in one case of mine, and I suspect that such petitions for dismissal will be increasingly frequent.