Daily Development for Friday, February 8, 2002

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

ZONING AND LAND USE; PROCEDURE; REVIEW; STANDARDS: A court will refuse to inquire into the motive behind a zoning commission's denial of a proposed subdivision plat absent a claim of a due process or equal protection violation. Zoning commission, however, is subject to the doctrine of equitable estoppel when it fails to point out a formal deficiency in a plat and an applicant reasonably relies on the commission's silence.

Equicor Dev. v. Westfield-Washington Tp., 758 N.E.2d 34 (Ind. 2001).

Plaintiff submitted a subdivision plat to the Westfield-Washington Township Plan Commission for approval of the development of 27.2 acres as a cluster housing development. The Commission's staff reviewed the plat and determined that the Commission should approve the plat. Commission accordingly published notice of a public hearing on the plat. Commission also submitted a proposal to the Town Council to suspend the provision governing cluster housing. At the public hearing on March 23, Commission expressed concern as to the density of Plaintiff's proposed development and referred the plat for further review. After further comments from the Subdivision Committee, Plaintiff revised its plat to include additional green space and minor changes to the streets.

The Town Council subsequently approved the suspension of the cluster housing provision of the zoning code. On May 26, the Plan Commission voted to deny approval of the plat, citing Plaintiff's failure to properly designate the required number of parking spaces on the plat as its reason for denial. The proposed plat clearly depicted the required spaces for each unit, but did not properly list the number and location of the spaces.

Plaintiff filed a Petition for a Writ of Certiorari in the trial court, and the trial court affirmed reasoning that the decision of the Commission was supported by substantial evidence that the denial was based on the failure to designate the parking spaces. The Court of Appeals reversed, holding that the Commission's decision was "arbitrary and capricious" because its true motive was a concern for density and because similar plats had been approved without properly designated parking spaces.

The Supreme Court of Indiana affirmed, but on different grounds. The court held that it is improper to inquire into the subjective motive of an agency action absent a claimed violation of rights protected by the Fourteenth Amendment. One such claim would be a true absence of any rational basis, but this determination apparently goes beyond the simple "arbitrary and capricious" standard that the Court of Appeals applied. Further, the court allowed that due process would be violated if there was such an improper motive as "extreme partisan political considerations, personal conflicts of interest and gain, or invidious discriminatory intent."

In this case, the Commission's action could not be reversed on the grounds that it was arbitrary and capricious under the objective test of whether there is any reasonable basis for the action. The court reasoned that the Commission "was objectively correct in pointing to Plaintiff's failure to designate the parking spaces, even if anyone with common sense could figure out that there were indeed the required number of spaces." Further, past approval of similar plats could not establish that the Commission's action was arbitrary and capricious because past weak enforcement cannot invalidate an otherwise enforceable ordinance.

The court, however, did hold that the Commission could not deny approval of the Plaintiff's plat based on the failure to designate parking spaces under a theory of equitable estoppel. Although generally governmental entities are not subject to equitable estoppel, estoppel is appropriate when the party asserting it has detrimentally relied on the government's affirmative assertion or silence when there was a duty to speak.

Here, the Plaintiff relied on the Commission's silence by proceeding with the Commission's suggestions as to green space and street layouts in the reasonable belief that the plat would be approved and consequently failed to make changes to the easily correctable flaws in the parking designation. Since this was merely a formal defect, the Commission had ample time to point out any deficiency in the parking designation, and the Plaintiff reasonably relied on the Commission's failure to do so, the Commission was estopped from asserting the parking deficiency as the reason for its disapproval of the plat. The court therefore reversed the trial court and remanded the case to the Commission for final review of the plat.

Comment 1: The editor concurs that if there is an express requirement and the applicant doesn't meet it, the applicant cannot make a substantive due process argument, whether or not the requirement has been invoked before (subjective to the "special motive" inquiry the court suggests.) Clearly the Court of Appeals was convinced that the applicant got "jocked around" here and was seeking a basis for reversal. But the Supreme Court wisely chose not to use the broad standard of review that the lower court opinion suggested.

Comment 2: The case is noteworthy for the court's willingness to use the estoppel device to get to the result it wanted without changing the precedent on standards of review. It carved out a narrow exception based upon equitable estoppel. This is a rare case (we've seen a few in recent years) where the court concludes that the red tape should be broken due to deliberate or accidental bureaucratic obfuscation. The absence of the parking space count was not substantive, and the only public interest served by rejecting the application on that basis was an overrefined sense of order. On the other hand, to send the developer back through the process to correct this minor defect would be very expensive for the developer and might subject the developer to more monkey business. Enough's enough! Congratulations to the Arkansas Court for seeing this.

For other estoppel cases, see Pingitore v. Town of Cave Creek, 981 P.2d 129 (Ariz. App. 1998) (the DIRT DD for 2/21/99) (Town government may be estopped from enforcing zoning ordinance that conflicted with construction plan and grading permit issued subsequent to ordinance) and Lake Bluff Housing Partners v. City of South Milwaukee, 588 N.W.2d 45 (Wis. App. 1998). (Construction in violation of a zoning classification is unlawful, even when construction is authorized by a building permit issued voluntarily by the appropriate authorities. Failure to request a stay pending appeal of a court ordered building permit does not estop a city from enforcing its zoning regulations (including potentially razing the building).

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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