Opinion ID: 2066424
Heading Depth: 1
Heading Rank: 4

Heading: Which Ordinance Should Be Applied in Determining Whether U.S. Cellular Should be Granted a Special Use Permit?

Text: A. Applicable law. A preliminary issue that must be decided is whether the issues on appeal are governed by the new ordinance that has been adopted since the hearing or by the ordinance that was in effect when the Board ruled on the application. The rule in most states is that a reviewing or appellate court must decide a case based on the zoning law as it exists at the time of the court's decision. Edward H. Ziegler, Rathkopf's The Law of Zoning and Planning § 26.02[2][a], at 26-3 to 26-4 (4th ed.1996) [hereinafter  Rathkopf's ]; accord Kenneth H. Young, Anderson's American Law of Zoning § 27.38, at 636 (4th ed.1997) [hereinafter  Anderson's ]. The purpose of this rule is to prevent an appellate court from issuing orders for the construction of improvements contrary to presently existing legislative provisions. Atlantic Richfield Co. v. Board of Supervisors, 40 Cal.App.3d 1059, 1065, 115 Cal.Rptr. 731 (1974). This rule is consistent with the principle that even a validly-issued permit may be revoked by the administrative body on the basis of a subsequent change in the zoning laws unless the permittee has made substantial improvements in good faith reliance on the permit. Id.; accord O'Hare Int'l Bank v. Zoning Bd. of Appeals, 37 Ill.App.3d 1037, 347 N.E.2d 440, 442 (1976); Thomas v. Zoning Bd. of Appeals, 381 A.2d 643, 647 (Me.1978). A narrow exception to this rule has been recognized when the board acts in bad faith. Rathkopf's § 26.02[2][c][i], at 26-6 to 26-8; Anderson's § 27.38, at 639-40. The factual patterns that have prompted courts to apply this exception appear to have a common theme. In Humble Oil & Refining Co. v. Wahner, 25 Wis.2d 1, 130 N.W.2d 304 (1964), the Wisconsin Supreme Court held that despite the fact that the applicant, Humble, did not have a vested right at the time the new ordinance was adopted, the town could not deny a building permit. 130 N.W.2d at 310. The court's conclusion was based on the fact that the town officials were trying to keep one jump ahead of Humble and were attempting to change the rules after they had been hailed into court for what Humble believed was arbitrary, unreasonable, and capricious action. Id. at 311. The court noted that the city had attempted to zone out a use. Id. Similarly, in Hatcher v. Planning Board, 111 A.D.2d 812, 490 N.Y.S.2d 559 (1985), the court refused to apply the general rule, noting that [local] officials may not, in bad faith, delay [or deny] approval of a properly submitted and conforming building plan while they alter a zoning ordinance to bar the prospective development. Hatcher, 490 N.Y.S.2d at 560. In these cases, the zoning authority acted illegally to deny or delay the granting of a permit, thereby preventing the applicant from acquiring vested rights to complete the project before any amendments to the ordinance became effective. Some courts have rejected the general rule and held that a zoning authority must apply the ordinance in effect at the time of the application. See Rathkopf's § 26.02[3][a], at 26-9; The Law of Municipal Corporations § 25.155, at 692. The rationale for this rule is that it allows greater certainty for property owners in planning for the development of their property. See Rathkopf's § 26.02[3][a], at 26-9; The Law of Municipal Corporations § 25.155, at 692. Courts adopting this minority view have also recognized exceptions. If the subsequently enacted ordinance was pending when the permit application was filed, the later ordinance governs the application. See Rathkopf's § 26.02[3][b][i], at 26-10; The Law of Municipal Corporations § 25.155, at 692. In addition, some courts have refused to apply the old ordinance where the zoning board shows a compelling countervailing public interest. The Law of Municipal Corporations § 25.155, at 692. We think the general rule is most consistent with our law that an applicant has no vested right to a particular zoning ordinance. See Quality Refrigerated Servs. v. City of Spencer, 586 N.W.2d 202, 206 (Iowa 1998) (holding that no property owner has a vested right in the continuation of a particular zoning classification but may acquire the right to complete the development of his property in accordance with his plans as of the effective date of the new ordinance if he has made substantial expenditures in reliance on a validly-issued permit). If an applicant, who has been granted a permit, can have it revoked where he has no vested rights, it follows that an applicant, who was erroneously denied a permit and has acquired no vested rights, should not have any greater rights. Therefore, we will apply the new ordinance here, unless U.S. Cellular has a vested right or the bad-faith exception to the general rule applies. B. Application of law to facts. Here, U.S. Cellular makes no claim that it has acquired any vested rights; indeed, it has not yet been issued a permit that could provide a basis for the acquisition of such rights. Thus, we must decide whether the exception to the rule applies. The general rule applying the ordinance in effect at the time of the appellate court's decision does not apply where the board acted in bad faith. We think this exception applies here. The district court made a factual finding that the Board acted in bad faith and/or with malice in purposely applying an ordinance that was still being drafted as the basis for its denial of U.S. Cellular's application. This finding is binding on us if supported by substantial evidence; we think it is. The trial court noted that at the hearing the Board approved a motion to deny the application based on staff recommendation. That recommendation was not based on any deficiencies in the application under the applicable ordinance, but instead was based on the failure of the proposed structure to comply with an ordinance then being drafted. The district court also observed that the Board's written decision did not accurately reflect its action at the hearing. In its written decision the Board did not mention noncompliance with the anticipated ordinance, but rather stated that the application was denied because the site was too small for such a large structure and because there was considerable opposition. In fact, there was nothing in the record before the Board to substantiate its conclusion that the site was too small. To the contrary, the only facts before the Board consisted of information from the manufacturer that if the tower fell, it would buckle and land within the confines of the lot. The court also found that the Board misrepresented the strength of the opposition to the application. The Board characterized the opposition as considerable; yet of the seven response cards that were returned, three were in favor, three were opposed, and one did not indicate a position. Although the president of the neighborhood association stated at the hearing that the association opposed the tower, an owner of two properties (who had not returned a response card) appeared at the hearing to express support for the tower. The Board's denial of U.S. Cellular's application was so patently illegal that the Board does not even attempt to justify it on this appeal. [4] We think the Board's action in denying the application, without any legal justification, and the later discrepancies between its action, its written decision and the evidence adduced at the hearing constitute substantial evidence in support of the district court's finding that the Board acted in bad faith and/or with malice. By virtue of its illegal action the Board avoided having to grant the application, and the resulting delay gave it time to enact the new ordinance prohibiting the requested use. Because the Board acted in bad faith and/or with malice, the exception to the general rule applies. Therefore, we will apply the ordinance in effect at the time of the hearing in determining whether the remedy ordered by the district courtissuance of a permitis proper and/or whether the matter should be remanded to the Board. [5]