Opinion ID: 1763145
Heading Depth: 1
Heading Rank: 8

Heading: Applicability Based on Operational Status

Text: The park's eligibility for grandfather clause protection based on its commercial status does not end the inquiry, for the clause sets forth other preconditions in order to protect a previously legal use rendered nonconforming by a new or amended zoning regulation. Specifically, the clause requires that the establishment be in operation prior to the change in zoning regulations. The trial court found that Ricky Sanders's efforts prior to the enactment of the Private Act only manifested intent and preparation for a mobile home park but that Hiwassee LLC did not carry its burden of proof to establish that the mobile home park was actually in operation. The Court of Appeals concluded the opposite: that the evidence preponderated against the trial court's finding and that Ricky had taken substantial enough steps to establish a pre-existing use of the property as a mobile home park prior to the passage of the Private Act. As the party seeking the benefit of the grandfather clause, Hiwassee LLC bears the burden of showing that the mobile home park qualified for the grandfather clause's protection based on its actual operational status at the time the law changed. [18] Qutdoor W. of Tenn., Inc. v. City of Johnson City, 39 S.W.3d 131, 135 (Tenn.Ct.App. 2000); Lamar Adver. of Tenn., Inc. v. City of Knoxville, 905 S.W.2d 175, 176 (Tenn. Ct.App.1995). In addition to an ongoing business, our courts have held that the grandfather clause protects property owners who ha[ve] taken substantial steps in the construction of [the establishment] prior to the change in the Zoning Regulations or where `substantial liabilities are incurred relating directly to construction.' Rutherford v. Murray, No. E2003-01333-COA-R3-CV, 2004 WL 1870066, at  (Tenn.Ct. App. Aug.20, 2004) (quoting State ex rel. SCA Chem. Waste Servs., Inc. v. Konigsberg, 636 S.W.2d 430, 437 (Tenn.1982)); accord Heath Twp. v. Sall, 442 Mich. 434, 502 N.W.2d 627, 630 (1993); Ellington Constr. Corp. v. Zoning Bd. of Appeals, 77 N.Y.2d 114, 564 N.Y.S.2d 1001, 566 N.E.2d 128, 132 (1990). As our Court of Appeals has noted: The basic problem in the instant case is one that has been faced by many courts over the past years and is well stated as follows: Land development and building construction generally stretches out over a period of time. The question is at what point will a court recognize that the developer is entitled to protection from a change in zoning that would bar a use permitted when development or construction was commenced. Gackler Land Co. v. Yankee Springs Twp., [427 Mich. 562] 398 N.W.2d 393, 403 (Mich. 198[6]) (Levin, J., dissenting). Our state statute requires that there be an industrial, commercial or business establishment in operation in order to continue prior use. Dickson County v. Jennette, No. M1999-00054-COA-R3-CV, 2000 WL 1121550, at  (Tenn.Ct.App. Aug.9, 2000); see also Rutherford, 2004 WL 1870066, at -. These substantial steps which may be sufficient include evidence that, prior to the change in zoning regulations, the landowner devoted the property to the then-permitted use and that other parties, including the regulatory authority, recognized the landowner as actually using the property in the manner claimed. Rutherford, 2004 WL 1870066, at . Specifically, in Rutherford the grandfather clause protected an auto repair shop because, prior to the change in zoning regulations, the property owner obtained a building permit, began to pour footers and stack blocks for the garage, and started to operate the business. Id. at . Furthermore, the owner introduced a letter from the county zoning administrator acknowledging that the business was established before the zoning amendment and verified by the planning director. Id. at . In contrast, mere preparation to use the property, such as site plan approval and the issuance of a business license, does not qualify as a prior nonconforming use. Custom Land Dev., 168 S.W.3d at 775-76; see Buffalo Crushed Stone, Inc. v. Town of Cheektowaga, 13 N.Y.3d 88, 885 N.Y.S.2d 8, 913 N.E.2d 394, 400 (2009) (a mere contemplation of purpose, lacking supportive evidence of undertakings to effectuate such intentions, will not suffice); H.R.D.E., Inc. v. Zoning Officer, 189 W.Va. 283, 430 S.E.2d 341, 346 (1993) (no vested right in nonconforming use from [m]ere contemplated use or preparation or preliminary negotiations). The grandfather clause is designed to protect ongoing business operations, not to extend the time allowed to develop a nonconforming business. Custom Land Dev., 168 S.W.3d at 775. Decisions from the Court of Appeals have elaborated on the kinds of preparations that fall short of being in operation and, therefore, do not warrant grandfather clause protection. In Dickson County, the court held that the property owner had only made preparations to operate a quarry before the enactment of a zoning resolution that prohibited quarrying without a special exception. 2000 WL 1121550, at . The property owners had twice blasted rock on the property for the purpose of constructing a road and had made a single sale that the court described as an incidental commercial transaction. Id. at . Also, the owners had entered an option-to-lease agreement which prevented them from operating or allowing the operation of a quarrying business. Similarly, in Campbell v. Bedford County Regional Planning Commission, the Court of Appeals denied grandfather clause protection to a body shop because the proof at trial did not establish that the plaintiffs had an ongoing auto repair business before the defendant commission zoned the property as an agricultural and forestry district. No. M2003-00025-COA-R3-CV, 2004 WL 626724, at  (Tenn.Ct.App. Mar.29, 2004). Despite evidence of preparation and intent, such as the clearing of land, pouring of concrete, roof construction, and installation of siding, the plaintiffs did not produce evidence of their customer base, business operation, or invoices for repair work. Id. at , . We decide whether the landowner has done enough to give rise to a prior nonconforming use by reviewing the facts of each case, as do many other jurisdictions. E.g., Baxter v. City of Preston, 115 Idaho 607, 768 P.2d 1340, 1342 (1989); Legrand v. Ewbank, 284 S.W.3d 142, 146 (Ky.Ct.App.2008); Seven Islands Land Co. v. Me. Land Use Regulation Comm'n, 450 A.2d 475, 481 (Me.1982); Storage Masters-Chesterfield, L.L.C. v. City of Chesterfield, 27 S.W.3d 862, 866 (Mo.Ct.App.2000); Clackamas County v. Holmes, 265 Or. 193, 508 P.2d 190, 192 (1973). After reviewing the record before us in this case, we conclude that the evidence does not preponderate against the trial court's finding that Ricky Sanders's efforts only represented preparation and intent, which are insufficient to establish that the mobile home park was in operation before the change in zoning regulations. Although Ricky testified that he rented out lots prior to the enactment of the Private Act, he acknowledged that the first tenant did not move onto the property until right close to May 30, 1998. The trial court correctly noted that Hiwassee LLC did not introduce evidence to corroborate Ricky's earlier lot rentals or to show the amount of monies, if any, that he received from tenants before that date. The septic system and water tap certificates do not reflect how much Ricky paid for them. Ricky paid only $22 in state and local fees for each of thirteen electrical permits, totaling an insubstantial expenditure of $286. While Ricky spent $98,630 to purchase ten mobile homes and began moving those homes onto the property shortly before the Private Act took effect, he did not apply for the necessary permits required for each mobile home. The 1975 Resolution required that Ricky obtain permits before establishing a mobile home park or using an individual mobile home. The trial court admitted the 1975 Resolution for the limited purpose of determining whether the mobile home park was in operation. Even considering the 1975 Resolution only for that purpose, Ricky's failure to apply timely for the relevant permits also acts to negate Hiwassee LLC's contention that the park was in operation. Without those permits, Hiwassee LLC also has not shown that Ricky was devoting the property to use as a mobile home park or putting others, including Smith County, on notice of his mobile home park operation. [19] See Rutherford, 2004 WL 1870066, at -. The trial court found that Hiwassee LLC failed to carry its burden of showing that the mobile home park was in operation prior to the enactment of the Private Act. Although our analysis is different, we cannot say that the evidence preponderates against this finding. Accordingly, we hold that the mobile home park is not entitled to the protection of the grandfather clause, Tenn.Code Ann. section 13-7-208(b)(1), because it was not in operation prior to the change in zoning regulations that rendered the mobile home park a nonconforming use. Having concluded that the grandfather clause never protected the mobile home park, we need not reach the issue of whether the park use was subsequently abandoned. [20]