Jordan–arapahoe v. Bd. of County Commissioners of The County of Arapahoe

• Decision Date: 08 February 2011
• Docket Number: No. 09–1501.,09–1501.
• Citation: 633 F.3d 1022
• Parties: JORDAN–ARAPAHOE, LLP, a Colorado limited liability partnership; Jacob Mazin Company, Inc., a Colorado corporation, Plaintiffs–Appellants,v.BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF ARAPAHOE, COLORADO, Defendant–Appellee.Colorado Counties, Inc.; Board of County Commissioners of the County of Boulder, Colorado, Amici Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

633 F.3d 1022

JORDAN–ARAPAHOE, LLP, a Colorado limited liability partnership; Jacob Mazin Company, Inc., a Colorado corporation, Plaintiffs–Appellants,

v.BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF ARAPAHOE, COLORADO, Defendant–Appellee.Colorado Counties, Inc.; Board of County Commissioners of the County of Boulder, Colorado, Amici Curiae.

No. 09–1501.

United States Court of Appeals, Tenth Circuit.

Feb. 8, 2011.

Wayne B. Schroeder, Grimshaw & Harring, P.C., (Jamie N. Cotter, Grimshaw & Harring, P.C., and John W. Madden III, The Madden Law Firm, with him on the briefs) Denver, CO, for Appellants.Ronald A. Carl, Assistant County Attorney, (Kathryn L. Schroeder, County Attorney, with him on the brief) Arapahoe County Attorney's Office, Littleton, CO, for Appellee.Beth A. Dickhaus, Hall & Evans, L.L.C., Denver, CO, and David Hughes, Deputy County Attorney, Boulder County Attorney's Office, Boulder, CO, on brief for Amici Curiae.Before MURPHY, McKAY, and TYMKOVICH, Circuit Judges.TYMKOVICH, Circuit Judge.

Jordan–Arapahoe, LLP, and Jacob Mazin Company, Inc. (together Jordan–Arapahoe) own land in Arapahoe County, Colorado that they intended to develop for use as a car dealership and sell to CarMax, Inc. Learning of the planned development, the Arapahoe County Board of County Commissioners rezoned the land, thwarting the sale.

Jordan–Arapahoe sued under 42 U.S.C. § 1983, claiming Arapahoe County's zoning decision deprived it of a protected property interest without due process in violation of the Fourteenth Amendment of the United States Constitution. The district court dismissed the case, reasoning Jordan–Arapahoe had failed to show a protected property interest under Colorado law since its development proposal had not yet become sufficiently final, or vested.

We agree. Under Colorado law a property owner does not obtain a vested property right absent (1) the approval of a site specific development plan, or (2) the landowner's substantial and detrimental reliance on representations and affirmative actions by the local government. Neither condition was met here.

Having jurisdiction pursuant to 28 U.S.C. § 1291, we therefore AFFIRM the district court's decision.

I. Facts

Some time prior to 1998, Jordan–Arapahoe, LLP, purchased land in Arapahoe County, Colorado. In 1998 Arapahoe County approved a preliminary development plan (1998 PDP) that rezoned Jordan–Arapahoe's land from agricultural to Mixed Used–Planned Unit Development (MU–PUD). Arapahoe County amended the PDP in 1999 (1999 PDP). Both the 1998 PDP and the 1999 PDP noted “Automotive Sales and Repair” as an allowable use under the MU–PUD zoning.

In September 2002, Jacob Mazin Company, Inc. purchased some of Jordan–Arapahoe's land with the intent to develop an automobile dealership. It never developed the dealership, but Jordan–Arapahoe, relying on both PDPs' provision of “Automotive Sales and Repair” as an allowed use, paid approximately $2.6 million in capital development costs on both its and Jacob Mazin's property for (a) street construction, (b) site preparation and grading, (c) water channel drainage improvements, and (d) sanitary sewer installation in preparation for selling the land to a buyer interested in using it for an automotive dealership.

In April 2006, Jordan–Arapahoe and Mazin agreed to sell their land to CarMax, which intended to operate a dealership. The contract was contingent upon confirmation that CarMax's intended use of the property was permitted under the zoning regulations.

In May 2006, the city of Centennial asked the County to suspend all applications for development approval of automobile-sales uses at and around the Jordan–Arapahoe property. Arapahoe County complied and imposed a four-week moratorium on all development proposals, prompting a meeting at which the City Manager for Centennial, Jordan–Arapahoe, and CarMax appeared to state their various interests. CarMax advised Arapahoe County it had expended $100,000 to prepare its Final Development Plan. After the meeting, Arapahoe County extended the moratorium to January 2007.

During that moratorium period, in late 2006, against the unanimous recommendation of the Arapahoe County Planning Commission and over Jordan–Arapahoe's objections, Arapahoe County altered the zoning for an area that included Jordan–Arapahoe's property. The rezoning added to the existing zoning regulations an “Overlay District” that superseded portions of the MU–PUD and replaced the PDPs' original 30–foot setback with a 1,500–foot setback for all public rights of way surrounding Jordan–Arapahoe's property. The 1,500–foot setback only applies to automobile or vehicle sales uses and makes it impossible to build a car dealership on the property, effectively negating Jordan–Arapahoe's contract with CarMax.

Frustrated at not being able to sell its property after developing it for a specific use, Jordan–Arapahoe brought a claim under 42 U.S.C. § 1983 for deprivation of a protected property interest without due process in violation of the Fourteenth Amendment of the United States Constitution. The district court dismissed for failure to state a claim upon which relief can be granted, concluding Jordan–Arapahoe had failed to allege facts sufficient to show they had a protected property interest in the original zoning.

II. Discussion

Jordan–Arapahoe argues the district court erred in concluding it has no protected property interest under Colorado law. It contends Arapahoe County's zoning classification and conduct created a protected property interest in two ways: (1) Colorado's Vested Property Rights Act (VPRA), Colo.Rev.Stat. § 24–68–101, et seq. establishes a property right by virtue of Arapahoe County's zoning scheme combined with the County's approval of the preliminary development plan; and (2) Colorado common law establishes vested property rights because Jordan–Arapahoe reasonably relied on Arapahoe County's zoning classification in expending substantial sums developing its property for a car dealership.

The district court rejected both theories. The court concluded neither Colorado statutory nor common law created a vested property right protected under the United States Constitution. We agree with the district court.

We review de novo a district court's dismissal of a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), applying the same legal standard as the district court. Teigen v. Renfrow, 511 F.3d 1072, 1078 (10th Cir.2007). We accept all well-pleaded facts as true and view them in the light most favorable to the plaintiff. Beedle v. Wilson, 422 F.3d 1059, 1063 (10th Cir.2005). To survive a 12(b)(6) motion to dismiss, a plaintiff must allege that “enough factual matter, taken as true, [makes] his ‘claim to relief ... plausible on its face.’ ” Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir.2008) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “A claim has facial plausibility when the [pleaded] factual content [ ] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009); see also Gee v. Pacheco, 627 F.3d 1178, 1182–83 (10th Cir.2010). As applied here, to state a claim for the deprivation of property without due process, Jordan–Arapahoe must allege facts plausibly suggesting (1) Arapahoe County deprived it of a protected property interest, and (2) such deprivation was arbitrary. Hyde Park Co. v. Santa Fe City Council, 226 F.3d 1207, 1210 (10th Cir.2000).

Property rights are protected by the due process clause of the Fourteenth Amendment, which provides, “[N]or shall any State deprive any person of life, liberty, or property, without due process of law.” U.S. Const. amend. XIV, § 1. Property rights we recognize under the Fourteenth Amendment “are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law—rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.” Bd. of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); see also Federal Lands Legal Consortium ex rel. Robart Estate v. United States, 195 F.3d 1190, 1196 (10th Cir.1999). And, the “identification of those benefits and the ‘legitimate claim of entitlement’ to them is determined not by the Constitution, but largely by state law.” Eason v. Bd. of Cnty. Comm'rs, 70 P.3d 600, 604–05 (Colo.App.2003) (citing Hillside Cmty. Church v. Olson, 58 P.3d 1021, 1025 (Colo.2002)).

We thus must turn to state law in understanding the scope of property rights in land ownership. This is not always a simple task. The modern understanding of the bundle of sticks of land ownership is overlain with myriad competing land use, zoning, and environmental regulations. A landowner faces numerous restrictions on the full use and alienability of land depending on the interplay of local, state, and federal law. “[T]he right to use property is fully protected by the Due Process Clauses of the federal and state constitutions, but is subject to a proper exercise of the police power.” Id. at 605.

Zoning is the most prominent police power restriction on land use. Of course, the “economic and social benefits of zoning in crowded modern cities hardly need elaboration” and zoning is considered “essential to the public health, safety and welfare” of communities. 8 Eugene McQuillin, The Law of Municipal Corporations, § 25:2 (3d ed.2010). Nevertheless, a municipality's power to zone must be balanced against landowners' rights, and in “the municipal land use context ... the entitlement analysis presents a question of law.” Nichols v. Bd. of Cnty. Comm'rs, 506 F.3d 962, 970 (10th Cir.2007).

We have explained generally that a landowner's protected interest in a particular zoning decision depends on “whether there is discretion...