Burns Concrete, Inc. v. Teton Cnty.

• Decision Date: 01 November 2016
• Docket Number: Docket No. 43527-2015
• Citation: 384 P.3d 364,161 Idaho 117
• Court: Idaho Supreme Court
• Parties: BURNS CONCRETE, INC., an Idaho corporation, and Burns Holdings, LLC, an Idaho limited liability company, Plaintiffs–Appellants, v. TETON COUNTY, a political subdivision of the State of Idaho, Defendant–Respondent.

161 Idaho 117

384 P.3d 364

BURNS CONCRETE, INC., an Idaho corporation, and Burns Holdings, LLC, an Idaho limited liability company, Plaintiffs–Appellants,

v.TETON COUNTY, a political subdivision of the State of Idaho, Defendant–Respondent.

Docket No. 43527-2015

Supreme Court of Idaho, Idaho Falls, September 2016 Term.

Filed: November 1, 2016

Rehearing Denied December 6, 2016

Brook B. Bond, Parsons Behle & Latimer, Boise, argued for appellants.

Kathy Spitzer, Teton County Prosecuting Attorney, Driggs, argued for respondent.

EISMANN, Justice.

This is an appeal out of Teton County from a judgment holding that the force majeure clause in a written contract between the county and a developer did not apply to the developer's failure to obtain zoning approval in order to construct the cement plant required in the agreement. We hold that the force majeure clause was broad enough to apply, vacate the judgment of the district court, and remand this case for further proceedings.

I.Factual Background.

Burns Holdings, LLC ("Developer") purchased a 6.5–acre parcel of property located in the unincorporated part of Teton County ("County") in order to build a ready-mix concrete manufacturing facility on the property. The property was zoned C–3 (commercial), and Developer applied to change the property's zoning to M–1 (light industrial). On February 26, 2007, the County approved the zoning change with conditions, one of which was that the Developer enter into a development agreement with the County pursuant to Idaho Code section 67–6511A.

The real property was located within the area of city impact of the City of Driggs ("City"). The County and the City had agreed pursuant to Idaho Code section 67–6526 that the City's zoning laws would apply in the area of impact. The City zoning ordinance provided that "[a]ny building or structure or portion thereof hereafter erected shall not exceed forty-five (45) feet in height unless approved by conditional use permit." Developer filed an application for a conditional use permit on June 13, 2007, seeking permission to exceed the height limitation because it wanted to build a facility that was 75 feet in height. The application was first reviewed by the City planning and zoning department, and on July 11, 2007, it recommended approval. On July 19, 2007, the application was then sent to the County.

On August 31, 2007, the County and the Developer entered into the development agreement. It recited that the "Developer intends to operate a Ready–Mix Concrete Manufacturing Facility (a ‘Facility’) on the property" and that "[a]ttached as Exhibit ‘B’—Site Plan, and Exhibit ‘C’—Building Elevations , and by this reference incorporated herein are plans for construction of Developer's intended permanent facility (‘Permanent Facility’)." The attached Exhibit C showed a building 75 feet in height. The agreement then stated that "[i]mmediately upon execution of this Agreement, Developer shall order and commence construction of the Permanent Facility" and that "the Developer shall erect and operate a temporary concrete batch plant on site as shown in Exhibit ‘B,’ " which was a picture of a temporary concrete batch plant. The agreement required the Developer to improve the access to the property from the state highway as required by the City, to construct a concrete block wall along the boundaries of the property, and to landscape the property, and it provided that the real property would be used exclusively for the operation of a ready-mix concrete manufacturing facility and that the contract would run with the real property in perpetuity.

On November 15, 2007, the County denied the Developer's request for the conditional use permit. The Developer sought judicial review of the denial, and this Court affirmed the denial on the alternative ground that the Local Land Use Planning Act required a variance permit, not a conditional use permit, to modify the height requirements in a zoning ordinance. Burns Holdings, LLC v. Teton Cnty. Bd. of Comm'rs , 152 Idaho 440, 444, 272 P.3d 412, 416 (2012). Upon the issuance of the opinion, the legislature amended the Local Land Use Planning Act to permit the use of a conditional use permit to make exceptions or waivers to zoning ordinance standards, including those matters that were subject to a variance permit. Ch. 334, § 2, 2012 Idaho Sess. Laws 926, 928–29. This change was effective on April 5, 2012.

The Developer was unable to commence construction of the Permanent Facility without an amendment to the zoning ordinance, although it did erect the temporary concrete batch plant. By letter dated April 9, 2012, the County demanded that the Developer remove the temporary facility. At some point, the Developer applied for a variance permit to construct a building that was 75 feet in height, and the County denied that application on September 13, 2012.

The development agreement provided that the Developer was to commence construction of the permanent facility immediately upon the execution of the agreement; that the permanent facility was to be completed within eighteen months; and that if construction was not completed within that time period, the County could revoke the authority to operate the temporary facility. The agreement included a force majeure clause stating that the requirement that the permanent facility be completed within eighteen months was "subject to delays resulting from weather, strikes, shortage of steel or manufacturing equipment or any other act of force majeure or action beyond Developer's control." By letter dated October 4, 2012, the County informed the Developer that the County had revoked the Developer's authority to operate the temporary facility pursuant to the terms of the development agreement. The County then sought to revert the zoning of the property to its previous zoning, and the Developer filed this lawsuit seeking: a declaratory judgment that the County is estopped from rezoning the property and that the time period for construction of the permanent facility was tolled by the force majeure clause; a judgment rescinding the contract and awarding the Developer damages; and an award of damages for unjust enrichment. The County answered and filed a counterclaim seeking damages for breach of contract and a declaratory judgment stating that the force majeure clause did not excuse nonperformance and that the...