Clear Water is a very interesting case from the standpoint of developers' remedies against neighborhood groups who overreach. Clear Water applied for a zoning change and “use on review” (special exception) to allow the use of its property for a moderately dense residential development and marina. The neighbors vigorously oppose the submissions. Clearwater sued the neighbors for intentional interference with developer's business relationships and tortious interference with its contracts based on residents' alleged misconduct aimed at preventing the development. It did not sue for defamation.
The neighbors filed a motion to dismiss which was granted by the trial court, but on appeal, the Tennessee Court of Appeals reversed. First, I would’ve thought that the doctrine of judicial privilege would have required dismissal of the case, but Judge Andy Bennett, writing for the court, indicated that the parties had agreed that the doctrine only applied to a claim of defamation. Since no such claim was made, judicial privilege is not apply. See Evans v. Nashville Banner Publ'g Co., 1988 WL 105718, for an interesting example of its application.
The allegations by the developer were numerous: the creation of a multiplicity of falls email accounts in order to give the governmental decision makers an inflated idea of the number of people in opposition; flyers containing false and misleading information; and the submission of false and misleading material to the Board of Zoning Appeals, among other things.
The motion to dismiss was based on a number of arguments, including judicial immunity, but also the Anti-Slap Act, Tenn. Code Ann. §4-21-1003. As mentioned above, the judicial immunity doctrine only applies to defamation; the Anti-Slap Act provides immunity, but not if the communications were intentionally false or recklessly false. As a result, although the trial court granted the motion, the Court of Appeals reversed. Thus it appears, that if neighbors using social media tools, deliberately mislead or provide false information to governmental officials, there may be liability to a developer for interference with business relationships or contracts. By the way, the contractual allegations in this case were dismissed for failure to attach a copy of the contracts themselves, but that technical failure would not prevent some future developer from filing a similar case.
Also interesting is the fact that the case was appealed ultimately to the Tennessee Court of Appeals to review the zoning decisions made by the County and its board of zoning appeals. Although the Court of Appeals does not give the citation to that case, I believe it is Benson v Knox County, 2016 WL 2866534. Ultimately, the main part of the development was upheld while the marina was disapproved.
The outcome of the zoning litigation is interesting to me here. If the neighbors engaged in false and misleading communications, should that not have been revealed in the zoning litigation? And if so, was it not taken into consideration by the local government decision-makers in reaching a final conclusion? In effect, is the tort lawsuit not simply retrying the zoning litigation? For example, one of the allegations has to do with delay caused by misrepresentations by the neighbors. Assuming that's the truth, could the delay not also have been occasioned simply by the request of neighboring property owners without the misrepresentation? Those kinds of delays in rezoning applications and hearings before zoning boards are frequent in my experience. It doesn't require anybody to mislead; local government officials often have a leaning in favor of neighbors who vote in elections. That's just part and parcel of making an application for a zoning change or other development. I recognize that the developer could not counterclaim in a common law writ of certiorari appeal for damages, and that there is no technical res judicata; but as a practical matter, it seems to me that the decision of the courts on the zoning issues takes much of the wind out of the sails of the tortious interference case.
One final interesting note about the case is that the neighboring property owners who were sued, faced additional claims resulting from the conduct of their attorney. The allegations were that the Defendants were commanding, directing, and/or knowingly authorizing their attorney, and attorney “explicitly represented to the BZA” that a mock-up created by the Defendants and/or their attorney was “an intentional or reckless factual misrepresentation of the appearance of the development plan approved by the MPC” and that the attorney knew or should have known that the mock-up was false and misrepresented the location, nature, and appearance of the planned development. The court concluded that this was sufficient so that the neighboring property owners could be responsible for the actions of the attorney vicariously as part of a civil conspiracy.
This case is well worth considering. It is extremely interesting, and may be a cautionary tale for neighbors opposing development opportunities. Certainly, misrepresenting the details of any application for development is never a good thing; given the outcome here, it seems that there may be a cottage industry for lawsuits back against neighbors who get a little too creative.
At the same time, I have never been very comfortable with these kinds of cases against neighbors. Ordinarily I think they are mainly intended to scare the neighbors into not opposing the development, and secondly, that they may wind up diverting attention from the main objective, obtaining approval from the local government. But with the advent of this case in January of this year, I’m sure we will see more of these kinds of cases get filed.
Wednesday, March 29, 2017
Tuesday, March 28, 2017
Save Rural Franklin v Williamson County
One of the most interesting cases recently decided his a case from Williamson County released by the Tennessee Court Of Appeals last August. In Save Rural Franklin v Williamson County, 2016 WL 4523418, the Tennessee Court of Appeals does an interesting overview of the subdivision process as mandated by the Tennessee subdivision statutes, Tenn. Code Ann. §13-4-301 et seq. Although it is interesting generally for the overview that it provides concerning the subdivision process, it is even more interesting because it finally resolves a very significant question concerning appeals from decisions of Planning Commissions relating to subdivisions.
In a very rough way, the work of a Planning Commission with regard to subdivisions can be summarized as being tripartite: generally speaking, most local subdivision regulations require that a concept plan be submitted, that a preliminary subdivision plat be submitted which must be approved, and a final subdivision plat which will be recorded and based on which the lots may be sold. The heart of the process is the preliminary subdivision plat: that’s when the majority of decisions with regard to the layout and design of the subdivision are made. Furthermore, since the preliminary subdivision plat, once approved, forms the basis for the construction of the required infrastructure for the subdivision, and has always seemed to me that an appeal concerning the subdivision must be taken from the decision with regard to the preliminary subdivision plat. If for example, a group of neighbors weights until after the preliminary plat has been approved and substantial work completed with regard to the infrastructure, water and sewer, sidewalks, roadways, and so forth, an appeal from the decision with regard to the final subdivision plat, even if they might be right, the developer has spent a very significant amount of money based on the approval of the preliminary subdivision plat. As a general rule therefore the appeal should be taken from the action taken by the planning commission on the preliminary plat.
Unfortunately, we have never had any case law that directly looked at this issue. The Williamson County case finally does address it, and concludes that the approval of the preliminary plat is final for purposes of appeal. In the Williamson County case, a group of neighbors waited until the final plat had been approved to challenge the decision of the Planning Commission. The developer had already spent significant sums in order to provide the infrastructure required for the development. The court concluded that approval of the preliminary plat was final for purposes of appeal.
That’s not to say that an appeal from a final plat would not be appropriate under some circumstances. For example, if the final plat differed significantly from the preliminary plat, then a challenge to the approval of the final plat might be in order based on the lack of consistency. But in general, most of the time, on appeal from a Planning Commission decision concerning a subdivision, the appeal should be taken within 60 days of the decision concerning the preliminary plat.
This case is very interesting, and well worth study by attorneys working in the area of land use planning.
In a very rough way, the work of a Planning Commission with regard to subdivisions can be summarized as being tripartite: generally speaking, most local subdivision regulations require that a concept plan be submitted, that a preliminary subdivision plat be submitted which must be approved, and a final subdivision plat which will be recorded and based on which the lots may be sold. The heart of the process is the preliminary subdivision plat: that’s when the majority of decisions with regard to the layout and design of the subdivision are made. Furthermore, since the preliminary subdivision plat, once approved, forms the basis for the construction of the required infrastructure for the subdivision, and has always seemed to me that an appeal concerning the subdivision must be taken from the decision with regard to the preliminary subdivision plat. If for example, a group of neighbors weights until after the preliminary plat has been approved and substantial work completed with regard to the infrastructure, water and sewer, sidewalks, roadways, and so forth, an appeal from the decision with regard to the final subdivision plat, even if they might be right, the developer has spent a very significant amount of money based on the approval of the preliminary subdivision plat. As a general rule therefore the appeal should be taken from the action taken by the planning commission on the preliminary plat.
Unfortunately, we have never had any case law that directly looked at this issue. The Williamson County case finally does address it, and concludes that the approval of the preliminary plat is final for purposes of appeal. In the Williamson County case, a group of neighbors waited until the final plat had been approved to challenge the decision of the Planning Commission. The developer had already spent significant sums in order to provide the infrastructure required for the development. The court concluded that approval of the preliminary plat was final for purposes of appeal.
That’s not to say that an appeal from a final plat would not be appropriate under some circumstances. For example, if the final plat differed significantly from the preliminary plat, then a challenge to the approval of the final plat might be in order based on the lack of consistency. But in general, most of the time, on appeal from a Planning Commission decision concerning a subdivision, the appeal should be taken within 60 days of the decision concerning the preliminary plat.
This case is very interesting, and well worth study by attorneys working in the area of land use planning.
Friday, October 21, 2016
Metro Short Term Rental Property Ordinance Unconstitutional
Earlier today, Judge Kevin Jones of the Davidson County Circuit Court ruled in favor of the plaintiffs in a challenge to Metro's Short Term Rental Property Ordinance, finding it unconstitutionally vague. The court ruled on a Motion for Summary Judgment, my guess is orally from the bench, and so an order will be entered sometime in the next week or two. At this present time, I am assuming that no written version of the court's ruling is available. I did check with the Davidson County Circuit Court Clerk's office, and there is no order as of yet (which would be expected if the ruling was from the bench on the motion).
In essence, the plaintiffs argued that the definition of short-term rental properties was unconstitutionally vague and overlapped with a number of other land-use definitions contained in the Metro Zoning Ordinance, including hotels, boardinghouse, and bed-and-breakfasts. From some of the published reports, it appears that the court did not hold the 3% rule unconstitutional, but since the definitions are unconstitutionally vague, the 3% cap was invalidated as well.
It is certainly an interesting decision, and it will be more interesting to read the order. Finally, whether Metro will appeal is another interesting question. It may be simpler to simply pass another ordinance. The difficulty from the standpoint of property owners is that with the increased concern which is developed over the last few years since the adoption of the ordinance, there may be rather draconian solutions, including simply restricting short-term rentals to commercial areas of the city.
In essence, the plaintiffs argued that the definition of short-term rental properties was unconstitutionally vague and overlapped with a number of other land-use definitions contained in the Metro Zoning Ordinance, including hotels, boardinghouse, and bed-and-breakfasts. From some of the published reports, it appears that the court did not hold the 3% rule unconstitutional, but since the definitions are unconstitutionally vague, the 3% cap was invalidated as well.
It is certainly an interesting decision, and it will be more interesting to read the order. Finally, whether Metro will appeal is another interesting question. It may be simpler to simply pass another ordinance. The difficulty from the standpoint of property owners is that with the increased concern which is developed over the last few years since the adoption of the ordinance, there may be rather draconian solutions, including simply restricting short-term rentals to commercial areas of the city.
Wednesday, October 19, 2016
Short-term rentals upheld in Pennsylvania
In another interesting short-term rental case, the Pennsylvania Commonwealth Court [a kind of land-use Court of Appeals], concluded that a short term rental was consistent with residential single-family zoning. Marchenko v Zoning Board of Pocono Township, 2016 WL 4978459 (Pa. Commw. September 19, 2016). The local zoning official issued a notice of violation which was appealed to the zoning board. The property owner used the property as a primary residence for her purposes, and resided there the majority of the time, but leased out the property on a short-term basis to others. The zoning board ruled against the property owner but on appeal, the Pennsylvania court concluded that since the definition of single-family did not prohibit rental activity, that the accessory rental use was permitted.
Cases like this are appearing across the country, some permitting the short-term rental use, and some finding it inappropriate. Given the controversy here in middle Tennessee over the last year or two concerning short-term rentals, I’m sure we will see some more cases from the Tennessee appellate courts in the not-too-distant future.
Cases like this are appearing across the country, some permitting the short-term rental use, and some finding it inappropriate. Given the controversy here in middle Tennessee over the last year or two concerning short-term rentals, I’m sure we will see some more cases from the Tennessee appellate courts in the not-too-distant future.
Tuesday, October 4, 2016
Accessory Structure for Medical Care
During a seminar a couple of weeks ago sponsored by the Tennessee Principal League, Sam Edwards happened to mention the recent amendment of the zoning enabling statutes allowing accessory residential structures in cases of medical need. I had heard of the bill while it was pending before the General Assembly, but had not really looked at the statute after passage. It is certainly interesting. Furthermore, there is an interesting article in this month's Tennessee Bar Journal; you can take a look at it here.
Tenn. Code Ann. §13-7-501, et seq., authorizes the placement of a separate accessory residential structures in single-family residential districts if for the purpose of medical care as defined by the statute. Only one person can live in the accessory structure, it can be no greater than 500 square feet, and it appears that it must comply with local zoning and building code regulations, except that no permanent foundation is permitted or required.
It's unclear what this statutory provision actually accomplishes. Many local zoning regulations do not permit separate accessory residential structures of any size. There is also the possibility that the structures might not comply with the applicable building code. Tenn. Code Ann. §13-7-503 provides:
The Tennessee version does not mandate such an exemption but only provides that the local government "may" consider it in a single-family residential district.Tenn. Code Ann. §13-7-502(a)(1). That's a very significant distinction and would seemingly limit the applicability of this section only to those areas where the local government would permit such accessory uses.
Ultimately, this is an area, as in so many others, where the local government should have the ability to make the decisions concerning the ultimate land uses in various areas of the city or town. It may be that the sponsors of the legislation here in Tennessee wanted to make clear that it would be appropriate to restrict such accessory uses to lots where the caregiver lives in the principal residence. At least one case has held to the contrary (in Virginia) and perhaps the General Assembly wanted to avoid that result.
This is an interesting piece of legislation; however, as I mentioned, it is a little unclear as to exactly what it does accomplish. My general sense is that most zoning ordinances would prohibit this type of accessory structure in single-family residential districts; since this legislation does not appear to require local zoning authorities to allow the use, the enforcement of local regulations would in many cases appear to entirely prohibit the construction of such an accessory structure.
For some further discussion about the North Carolina provision, take a look at this website.
Tenn. Code Ann. §13-7-501, et seq., authorizes the placement of a separate accessory residential structures in single-family residential districts if for the purpose of medical care as defined by the statute. Only one person can live in the accessory structure, it can be no greater than 500 square feet, and it appears that it must comply with local zoning and building code regulations, except that no permanent foundation is permitted or required.
It's unclear what this statutory provision actually accomplishes. Many local zoning regulations do not permit separate accessory residential structures of any size. There is also the possibility that the structures might not comply with the applicable building code. Tenn. Code Ann. §13-7-503 provides:
Any temporary family healthcare structure installed pursuant to this part shall comply with any local codes and ordinances to connect to any water, sewer, and electric utilities that are serving the primary residence on the property and shall comply with all applicable requirements of the department of health.This seems a little ambiguous. Doesn't mean that the accessory structure must comply with all local codes, or only those related to the connection of water, sewer, and electrical utilities? Tenn. Code Ann. §13-7-502(c) seems to clarify:
Temporary family healthcare structures shall comply with any local requirements for accessory dwelling structures of this type.The Tennessee statute appears to be based upon statutes adopted by North Carolina and Virginia over the last several years. However, in the cases of those two other states, the state legislation appears to expressly permit the accessory structure regardless of any contrary local land use regulations. For example, the North Carolina statute provides in relevant part:
A city shall consider a temporary family health care structure used by a caregiver in providing care for a mentally or physically impaired person on property owned or occupied by the caregiver as the caregiver's residence as a permitted accessory use in any single-family residential zoning district on lots zoned for single-family detached dwellings.North Carolina SL 2014-94.
The Tennessee version does not mandate such an exemption but only provides that the local government "may" consider it in a single-family residential district.Tenn. Code Ann. §13-7-502(a)(1). That's a very significant distinction and would seemingly limit the applicability of this section only to those areas where the local government would permit such accessory uses.
Ultimately, this is an area, as in so many others, where the local government should have the ability to make the decisions concerning the ultimate land uses in various areas of the city or town. It may be that the sponsors of the legislation here in Tennessee wanted to make clear that it would be appropriate to restrict such accessory uses to lots where the caregiver lives in the principal residence. At least one case has held to the contrary (in Virginia) and perhaps the General Assembly wanted to avoid that result.
This is an interesting piece of legislation; however, as I mentioned, it is a little unclear as to exactly what it does accomplish. My general sense is that most zoning ordinances would prohibit this type of accessory structure in single-family residential districts; since this legislation does not appear to require local zoning authorities to allow the use, the enforcement of local regulations would in many cases appear to entirely prohibit the construction of such an accessory structure.
For some further discussion about the North Carolina provision, take a look at this website.
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