Opinion ID: 2344491
Heading Depth: 1
Heading Rank: 7

Heading: Refusal to expand existing rights

Text: We now turn to Plaintiffs' second contention. More specifically, they argue Judge Ireland further erred in granting judgment against them on their takings claims by declaring that the Board just refused to expand the existing rights. We begin our analysis by agreeing with the Board's assertion that there is no vested right in the continuity of zoning in a particular area so as to preclude subsequent amendment, i.e., no right to have the existing zoning ordinance continue unchanged. Houston v. Board of City Commissioners, 218 Kan. 323, 543 P.2d 1010 (1975); Colonial Investment Co., Inc. v. City of Leawood, 7 Kan.App.2d 660, 646 P.2d 1149 (1982). However, under the vested rights doctrine, if a vested property right existed before the change in zoning, the changed law cannot control without being subject to a successful takings claim. Laitos, Law of Property Rights Protections: Limitations on Governmental Powers, § 9.02[B][1] (2011 Supp.). See Delaney & Vaias, Recognizing Vested Development Rights as Protected Property in Fifth Amendment Due Process and Takings Claims, 49 Wash. U.J. Urb. & Contemp. L., 27, 31 (1996) (Only after landowners acquire vested rights under state law are they free to continue a project in the face of subsequent changes to land use regulations that would otherwise preclude continuing the project.). Similarly, Kansas also recognizes the nonconforming use doctrine. Under this doctrine, one can seek to continueafter a restricting change in zoning lawan already established use. The party seeking to take advantage of its claimed right must prove that the nonconforming use commenced prior to the enactment of the ordinance restricting such use. Crumbaker v. Hunt Midwest Mining, Inc., 275 Kan. 872, 881-82, 69 P.3d 601 (2003); see Goodwin v. City of Kansas City, 244 Kan. 28, 31-32, 766 P.2d 177 (1988). In Crumbaker we held that [t]he nonconforming use doctrine is codified at K.S.A. 12-758...: `... [R]egulations adopted under authority of this act [concerning planning and zoning in cities and counties] shall not apply to the existing use of any land but shall apply to any ... change in the use of ... land after the effective date of any regulations adopted under this act.' (Emphasis added.) 275 Kan. at 882, 69 P.3d 601. Accordingly, to prevail on a takings claim, a party seeking compensation must first establish that the property in question is one in which a vested interest exists, i.e., a constitutionally cognizable property interest. Landgraf v. USI Film Products, 511 U.S. 244, 266, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) (The Fifth Amendment's Takings Clause prevents the Legislature [and other government actors] from depriving private persons of vested property rights except for a `public use' and upon payment of `just compensation.'); Goodwin, 244 Kan. 28, Syl. ¶ 8, 766 P.2d 177 (where a party has no vested right in the use of land, restriction on that use by a city does not constitute a taking of property). This court has held that [a] vested right is a right so fixed that it is not dependent on any future act, contingency or decision to make it more secure. Vaughn v. Nadel, 228 Kan. 469, Syl. ¶ 3, 618 P.2d 778 (1980). Moreover, [r]ights are vested when the right to enjoyment, present or prospective, has become the property of some particular person or persons as a present interest. [Citation omitted.] [On the other hand, a ] ` mere expectancy of future benefit, or a contingent interest in property founded on anticipated continuance of existing laws, does not constitute a vested right. [Citation omitted.]' (Emphasis added.) KPERS v. Reimer & Koger Assocs., Inc., 261 Kan. 17, 41, 927 P.2d 466 (1996). The Board and amicus curiae Protect the Flint Hills, Inc. (Protect) present a multitude of arguments for why Plaintiffs and Intervenors have no vested property rights. We need address only one, for it is dispositive. More particularly, the Board essentially argues that whatever interests these parties purportedly possessed before the moratorium, those interests were conditioned upon the Board's discretionary issuance of a conditional use permit. Accordingly, interests such as developing, constructing, or operating CWECS were not vested rights. We begin our analysis of this argument by examining the nature of conditional use permits (CUP's). According to one Kansas commentator, CUP's are a device for permitting certain land uses considered to be essential or desirable to the community to be placed in zoning districts in which they would ordinarily be incompatible. The permitted use, however, must be reasonable and conform to standards or conditions designed to protect the interests of adjoining owners.  (Emphasis added.) Heim, Kansas Local Government Law, § 4.47, p. 4-12 (4th ed. 2009). Accord 83 Am.Jur.2d, Zoning and Planning § 755. The Board's authority to issue CUP's is found at K.S.A. 12-755(a), which states the governing bodies of Kansas cities and counties are authorized to adopt zoning regulations that may include provisions which ... (5) provide for the issuance of special use or conditional use permits. As evidenced by the Board's November 2002 resolution establishing a moratorium on accepting or processing applications for CUP's for wind energy conversion systems, CUP's clearly were required for Plaintiffs and Intervenors to proceed. The Board's brief declares that CUP's were necessary in order to construct structures of the height they were proposing. Issuance of a conditional use permit would not have been automatic. The Intervenors' petition states they anticipate constructing a generator or generators... exceeding 125 feet in height, separately or in groups. According to the findings proposed by the Board and adopted by the district court, the turbines themselves would have been from 260' to 300' tall, with blades 125' in length. We agree that an applicant has no vested rights in a CUP when its issuance depends upon the discretionary approval of the Board. See, e.g., R-Goshen LLC v. Village of Goshen, 289 F.Supp.2d 441, 450-51 (S.D.N.Y.2003) (main element in determining the existence of a constitutionally cognizable property interest is the extent to which the deciding authority may exercise discretion in reaching its decision). The case of Kansas Racing Management, Inc. v. Kansas Racing Comm'n, 244 Kan. 343, 770 P.2d 423 (1989), provides guidance. There, this court addressed appellants' argument that the Kansas Racing Commission's refusal to disclose KBI background investigations violated their due process rights under the Kansas and United States Constitutions. The court ruled that its analysis first required an examination of the nature of an applicant's interest in the grant of a license under the Kansas Parimutuel Racing Act, K.S.A. 74-8801 et seq. Appellants contended their license applications created a protected property right in being awarded the licenses. The Kansas Racing Management court first observed that to establish a property interest in a particular benefit, appellant must have a legitimate claim of entitlement to it. 244 Kan. at 354, 770 P.2d 423 (citing Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 [1972]). The court then held that appellants could not demonstrate an entitlement or property interest in acquiring a license. It based its holding on the operative statute which gave the racing commission broad discretion in granting or denying the license, even if the applicant had complied with all statutory requirements. The statute, K.S.A. 74-8813(e), provided in relevant part: `If an application is found to be in compliance [with the provisions of the Kansas Parimutuel Racing Act] and the commission finds that the issuance of the license would be within the best interests of horse and greyhound racing within this state ... as determined solely within the discretion of the commission, the commission may issue an organization license to the applicant.' (Emphasis added.) 244 Kan. at 355, 770 P.2d 423. The court expressly rejected the appellants' comparison to Rydd v. State Board of Health, 202 Kan. 721, 451 P.2d 239 (1969), ruling that in Rydd the license sought for a day care center was within the category of licenses which the State must grant if the applicant meets certain minimum requirements. (Emphasis added.) 244 Kan. at 355, 770 P.2d 423. Similarly, in the instant case, at all material times, the zoning regulations granted absolute discretion to the Board for issuing conditional use permits. Section 31-101 of the 1995 Zoning Regulations, as well as of the July 2004 Zoning Regulations, is clear and unambiguous: Further, it is acknowledged that any property owner may seek a Conditional Use [Permit] for any of the types of land uses indicated herein for any property within the incorporated cities or the unincorporated portion of Wabaunsee County. The subsequent approval of such request by the respective Governing Body is a purely discretionary act that will be decided based upon the facts and circumstances discovered in the review of each application. There is no implied `right' for any person or landowner to obtain a Conditional Use for any use on any property.  (Emphasis added.) Section 31-102 of the zoning regulations further provides that after the CUP application is submitted to the planning commission and the commission's recommendation is received by the Board, the governing body may, within the specifications herein provided, permit such buildings, structures, or uses; provided that the public health, safety, morals, and general welfare will not be adversely affected ... and that necessary safeguards will be provided for the protection of surrounding property, persons, and neighborhood values. In this regard, the Governing Body may impose reasonable conditions on the approval of such Conditional Use. ... (Emphasis added.) We conclude under these circumstances and under the rationale and holding of Kansas Racing Management, that the Board's issuance of a CUP to Plaintiffs and Intervenors to develop, construct, or operate CWECS was indeed not automatic. As a result, whatever interest they may have possessed in the CUP could not be a vested property right. Cf., McPherson Landfill, Inc. v. Board of Shawnee County Comm'rs, 274 Kan. 303, 334, 49 P.3d 522 (2002) (CUP application for establishing and operating construction and demolition landfill on land zoned residential but previously allowed for quarrying under an earlier CUP; court held denial of CUP application was not a taking but was a decision to deny the expansion of the existing right to use the property for a quarry in the residential zone, i.e., no vested right in operating landfill). While Kansas Racing Management did not involve a discretionary denial of a CUP, that case's rationale and holding clearly are applicable to the instant case, as evidenced by Beasley v. Flathead County, 350 Mont. 177, 206 P.3d 915 (2009). There, the Montana Supreme Court addressed plaintiff's claim that, inter alia, the county Board of Adjustment had taken his interest in a CUP without just compensation by refusing to transfer it. The Beasley court first observed that plaintiff's constitutional takings claim required him to establish he possessed a constitutionally protected property interest. It then determined whether a reasonable expectation of entitlement existed, noting that [a]ny significant discretion conferred upon a local agency ... defeats a claim of entitlement. 350 Mont. at 181, 206 P.3d 915. The Beasley court observed that [t]he Regulations vested discretion with the Board to determine whether to grant a CUP. Any interest that Beasley may have possessed in the CUP did not rise to the level of a protected property or liberty interest under these circumstances. 350 Mont. at 181, 206 P.3d 915. The court concluded that plaintiff's inability to establish that he possessed a protected property interest in obtaining the transfer of the CUP precluded him from establishing his takings claims. Without any further analysis deemed necessary, the court affirmed the trial court's granting of the motion to dismiss plaintiff's constitutional claims. The discretionary decision analysis has been used by courts in cases involving other types of land use control as well. See Roshen LLC, 289 F.Supp.2d at 450-51 (collecting cases); Crowley v. Courville, 76 F.3d 47 (2d Cir.1996) (no constitutionally cognizable property interest in parking variance for retail building because zoning regulations vested zoning board with extremely broad discretion to grant or deny the variance); Laitos, Law of Property Rights Protections: Limitations on Governmental Powers, § 9.02[B][1], p. 9-13 (2011 Supp.) ([I]f the developer has merely filed a development plan or application for plat/subdivision approval, that act will not constitute a vested right if the relevant government body still retains discretion to approve it.). We find additional guidance in the recent case of Jordan-Arapahoe, LLP v. Board of County Com'rs, 633 F.3d 1022 (10th Cir. 2011). There, a developer argued that the county commissioners had deprived it of a vested property right when, after approval of the developer's preliminary development plan, the commissioners changed the zoning and denied the final development plan for building a car dealership. The Tenth Circuit Court of Appeals pointed to the commissioners' discretion to deny the final plan as a basis for rejecting the claim, stating: We have explained generally that a landowner's protected interest in a particular zoning decision depends on `whether there is discretion in the [local zoning authority] to deny a zoning or other application. Norton v. Vill. of Corrales, 103 F.3d 928, 931-32 (10th Cir.1996). ... Accordingly, `where the governing body retains discretion and the outcome of the proceeding is not determined by the particular procedure at issue, no property interest is implicated.' Crown Point I, LLC v. Intermountain Rural Elect. Ass'n, 319 F.3d 1211, 1217 (10th Cir.2003). ... Jordan-Arapahoe [developer] must show, therefore, that under Colorado law Arapahoe County had limited discretion to change the zoning and to disapprove Jordan-Arapahoe's final development plan. Like the district court, we conclude Jordan-Arapahoe failed to make this showing and thus has not demonstrated a vested property interest. ... 633 F.3d at 1026. Because at all material times the Board's zoning regulations did not just provide that issuance of a CUP was purely discretionary but additionally the July 2004 regulation changes completely eliminated the possibility of a CUP issuance for CWECS in particular, we conclude no vested property right of any type has been taken from Plaintiffs or Intervenors by the Board. We recognize none of the cases we cite involved a moratorium on accepting or processing CUP applications as in the instant case. And only Jordan-Arapahoe, LLP involved any type of moratorium: a 4-week moratorium on all applications of development proposals which was extended 7 months, during which time the commission altered its zoning to make building a car dealership impossible. The Jordan-Arapahoe, LLP court did not address the moratorium factor, however, in its opinion. Nevertheless, we hold the presence of a moratorium here does not modify our rationale or holding for a number of reasons, several of which suffice. First, the existence of a moratorium on accepting or processing applications for CUP's in which no vested property right ever existed can hardly support a takings argument. Second, as the Board suggests, its moratorium on permits while a zoning amendment was pending with the planning commission, and ultimately the Board, is hardly a revolutionary concept. This court recognized the efficacy of moratorium ordinances, i.e., interim development controls, in Frick v. City of Salina, 290 Kan. 869, 235 P.3d 1211 (2010). There, for almost 3 years, the city prohibited the construction of driveways, culverts, or other improvement within the right of way of its project and on a city street. We acknowledged that comparable moratoria are widely used among land-use planners to preserve the status quo while formulating more permanent development strategies. 290 Kan. at 890, 235 P.3d 1211. We eventually denied the plaintiffs' claims of a 3-year temporary taking under Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002). Accordingly, we agree with the sentiments of one well-known commentator who has stated: The adoption of moratoria while studies are being made and public meetings or hearings are being held on the formulation or reformulation of the municipality's comprehensive plan has become general practice. ... The purposes of the study might be completely frustrated if, while the study was being conducted and suggestions for change were being discussed, landowners could secure permits to build structures that might be nonconforming in height or bulk, or that might be intended for uses which would be forbidden in locations to which the permits related. The new plan, when adopted, might be defeated by uses and structures constructed during the period of study or for which the owners secured vested rights because of the issuance of permits therefor. Consequently, it is common practice to impose a moratorium on the issuance of: ... (2) permits for particular types of structures or uses.  (Emphasis added.) Ziegler, Rathkopf's The Law of Zoning and Planning, Section 69:15, pp. 69-39 to 69-40 (2007). See Ziegler, §§ 13:3; 13:8; 13.13. Cf. Ecogen, LLC v. Town of Italy, 438 F.Supp.2d 149 (W.D.N.Y.2006) (moratorium on permits for, or actual construction of, wind turbine powers and facilities in town for a reasonable time pending the completion of a plan for control of construction of such structures in [town] as part of adoption of comprehensive zoning regulations; original duration was for 6 months but eventually extended to 2 years; court denied business' request for preliminary injunction). Because we have held there was no property for purposes of a takings claim, it is unnecessary to proceed with a full takings analysis, e.g., per se ( Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 538, 125 S.Ct. 2074, 161 L.Ed.2d 876 [2005] [citing Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992)]) or de facto ( Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124, 98 S.Ct. 2646, 57 L.Ed.2d 631 [1978]); see Vanek v. State, Board of Fisheries, 193 P.3d 283, 294 (Alaska 2008).