-----Original Message-----
From: Randolph, Patrick
Sent: Monday, December 05, 2005 5:31 PM
To: Randolph, Patrick
Subject: DD 11/8/05 Zoning estoppel permits calculated "end run?"

Daily Development for Tuesday, November 8, 2005
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri

ZONING AND LAND USE; ESTOPPEL: City will be estopped from reneging on
building permit after applicant has invested substantially in project,
even when permit issued erroneously and in violation of settlement
agreement that applicant previously had entered into with City.

Congregation Etz Chaim v. City of Los Angeles, 371 F. 3d 1122 (9th Cir.

The Congregation owned property in a residential neighborhood that had
used as a location for its religious practices, in violation of local
zoning ordinances, for 18 months.  Other residents of the neighborhood
objected.  There was litigation in state and federal court, including a
claim under the Religious Land Use and Institutionalized Persons Act.
On the eve of the hearing on this Act, the parties reached a settlement
agreement by which the Congregation agreed to "the single family
character of the property shall be restored and maintained, including
the  residential character and architecture" the action was dismissed,
with the Federal District Court retaining jurisdiction over the carrying
out of the dispute.  The Agreement obviously contemplated that new
permit applications might be made by the Congregation in "restoring" the
property, and required submission of plans for approval within 90 days.
It provided expressly that the "any notice, tender or delivery or oth!
 er com
munication pursuant to the Settlement Agreement" would be submitted by
the Congregation was to a specified individual in the City's large
planning department who lots of experience on this dispute and the
neighborhood.  This person was vested with responsibility by the City to
monitor compliance with the Agreement.

Instead, the Congregation ignored the specified individual and submitted
building plans to other persons in the City building department and
obtained a building permit.  The plans called for expansion of the
existing home from 3145 square feet to 8150 square feet, an expansion
guaranteed to infuriate the neighbors and, in the view of the City,
wholly inconsistent with the Agreement.  It did submit a copy of the
Agreement along with the plans, and negotiated for three months both
with the building department and a City Attorney lawyer who also had a
copy of the Agreement, paying over $20,000 in permit fees.

Upon receiving the permit, the Congregation immediately commenced with
its "remodelling."  The first step consisted of utterly demolishing the
existing house, leaving only two exterior walls standing.  The neighbors
immediately ran to Mr. Green, who apparently learned for the first time
of the "end run."  He concluded that the Agreement did not contemplate a
massive expansion of the size of the house as a "restoration."

When the City tried to stop work and suspend the permit, the
Congregation returned to Court and got an injunction against the City
action based upon estoppel.  The Ninth Circuit Court of Appeals, upheld
the estoppel claim by a split decision, including a clear and sensible

The court held that California had a well established doctrine of
estoppel, and that this was a relatively clear case, as there had been
extensive negotiation with the City, which had then issued a permit,
resulting in reliance by the Congregation that now appeared to be
irreparable.  It noted that whether the Congregations activities in fact
were inconsistent with the Agreement was a "nice question," but not one
that it needed to consider, as the City was estopped from raising it.

Of course, the City responded that the Congregation had violated the
Agreement by failing to notify Mr. Green, and that it therefore had
"unclean hands" and should not benefit from the estoppel.  The Court
responded that the submission of plans in connection with a permit
application was not clearly a "notice, tender, delivery or other
communication . . . ." as contemplated by the agreement to be addressed
to Mr. Green.

Comment 1: Give us a break!!!  As the dissent points out, this isn't
even a close case.  The Agreement specifically contemplated that there
would be construction and that the plans would be submitted to the City,
so how could the subsequent permit application not be a "communication"
under the Agreement?  The parties had selected Mr. Green, out of over
47,000 employees of the City, to receive this communication.  To anyone
looking on from the outside, there does seem to be some bad faith going

Comment 2: On the other hand, there had to be some very bad lawyering
going on as well, since the lawyer for the City Attorney's office who
had a copy of this Agreement also did not communicate with Mr. Green.
Perhaps the lawyer believed that Green had received notice from the
Congregation, but verification of this fact was only a phone call away.
Is it possible that the Congregation selected people in the Planning
Office who might have been favorably disposed towards its case?  The
Editor has no inside information on this point, but is struggling to
understand how a case of this evident notoriety within the Planning
Department sat there for three months without Mr. Green's notice,
especilly when the Agreement contemplated the submission of new plans
within 90 days to restore the property. 

Comment 3: Don't try this at home, kids.  Zoning estoppel may be common
in California, as asserted by the court, but in fact there is a long
tradition in most jurisdictions of protecting the body public from
carelessness by its own employees, and other jurisdictions might have
had no problem in letting the City dodge this bullet. 

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