City of Reno v. Nevada First Thrift
| Decision Date | 24 August 1984 |
| Docket Number | No. 15159,15159 |
| Citation | 686 P.2d 231,100 Nev. 483 |
| Parties | The CITY OF RENO, Appellant, v. NEVADA FIRST THRIFT, Respondent. |
| Court | Nevada Supreme Court |
This is an appeal from an order granting a writ of mandamus requiring appellant City of Reno (City) to issue a business license and certificate of occupancy for the Buena Vista Apartments (Buena Vista) owned by respondent Nevada First Thrift (NFT). For the reasons set forth hereinafter, the order granting the writ is affirmed.
Buena Vista is a common kitchen complex consisting of thirty-two bedrooms and eight kitchens. Each kitchen serves four bedrooms. The apartments are situated on a lot of approximately 11,000 square feet; zoning is R-3, requiring 1,000 square feet per dwelling unit.
Vari-build, the original owner and developer of the Buena Vista project, submitted construction plans to the City. The City approved the project and Vari-build received a building permit on February 17, 1981. One month later, NFT closed a construction loan with Vari-build to finance the project.
After two months of construction, a neighbor near the project complained to the City that Buena Vista constituted a violation of the zoning laws. The assistant City attorney responded with a memo to the mayor, City council and City manager concluding that the project "complies with all applicable zoning code requirements." Regarding dwelling unit density, he also opined, citing Reno Municipal Code § 16.12.030(b)(15) and (16), that the project "complies with the definition of living unit," because "[i]n this type of project one counts the number of kitchens, not the number of bedrooms, to determine dwelling units." 1 He further indicated that the City's ordinances regarding common kitchen units in "major projects" were inapplicable to Buena Vista because it contained only thirty-two bedrooms--less than half the number required for "major project" status. 2 City enacted new ordinances in 1982 numbering common kitchen dwelling units based on the sum of the bedrooms.
Three months after project commencement, the apartments were eighty-five percent completed. At that time, neighbors instituted administrative proceedings which halted construction. Vari-build obtained an injunction against the City to remove the stopwork order. Soon thereafter the apartments were completed.
The City's Board of Adjustment determined at a subsequent public hearing that common kitchen density would no longer be determined by the number of kitchens, but by the number of bedrooms. One week later, the City issued Vari-build a certificate of occupancy for Buena Vista. Vari-build thereupon applied for a business license for the apartments. Shortly thereafter, the City council affirmed the Board of Adjustment's interpretation dealing with common kitchen apartments and denied Vari-build's application for a business license.
After exhausting administrative remedies without success, Vari-build filed suit in district court and sought an order compelling issuance of a business license based on the doctrine of estoppel. The district court agreed that an estoppel would be appropriate if relief were to be accorded solely on the common kitchen issue, but then concluded that equitable relief was not available because the builder had unclean hands with respect to certain building code violations. Judge Breen determined that, despite approval of the building code violations by City authorities either on the original plans or after construction, the violations in light of the builder's lengthy experience had sufficiently soiled his hands to warrant a denial of equity.
Because Vari-build was unable to rent the Buena Vista Apartments, it had no income to cover debt service and therefore defaulted on its loan agreement with NFT. NFT foreclosed on the project and commenced this action seeking a writ of mandamus. 3
After a show cause hearing before the district court, Judge Bowen granted the writ of mandamus ordering the City to issue a business license and certificate of occupancy to NFT for the Buena Vista Apartments. Having complied with the writ, the City now appeals the order.
City's first contention is that it does not owe NFT any duty which could provide a basis for a claim for relief. City maintains that even if it acted negligently in enforcing and interpreting the zoning and building codes, any such negligence would not be actionable by NFT since any duty of care relating thereto exists only as to the public in general and not to any individual party seeking relief based on estoppel. We disagree. It would be an abuse of discretion in the instant case and contrary to principles of equitable estoppel and the vested rights doctrine if the City were allowed to retroactively enforce reinterpreted zoning laws or to assert previously waived building code infractions after funds had been loaned and construction nearly completed. We hold that when a building permit has been issued, vested rights against changes in zoning laws exist after the permittee has incurred considerable expense in reliance thereupon. 4 See Town of Paradise Valley v. Gulf Leisure Corporation, 27 Ariz.App. 600, 557 P.2d 532, 540 (1976); see also annot. 89 A.L.R.3d 1051 (1979). As was the court in Town of Paradise Valley, we are persuaded by the position succinctly summarized in Deer Park Civic Association v. City of Chicago, 347 Ill.App. 346, 106 N.E.2d 823, 825 (1952):
The general rule is that any substantial change of position, expenditures, or incurrence of obligations under a building permit entitles the permittee to complete the construction and use the premises for the purpose authorized irrespective of subsequent zoning or changes in zoning. 8 McQuillin Municipal Corporations, 272 (3rd ed.).
It would also offend sound public policy if cities were allowed to retroactively apply modified building rules and zoning changes so late in the life of a project. Construction lenders would have small assurance, indeed, in the credit worthiness of Nevada projects approved by governmental authority.
We have previously held, moreover, that such abuse is properly corrected by a writ of mandamus.
The extraordinary remedy of mandamus is available to compel the performance of an act which the law especially enjoins as a duty resulting from office. State ex rel. List v. County of Douglas, 90 Nev. 272, 524 P.2d 1271 (1974); Armstrong v. State Bd. of Examiners, 78 Nev. 495, 376 P.2d 492 (1962). That writ also is available to correct a manifest abuse of discretion by the governing body, and occasionally has been so utilized in zoning cases. State ex rel. Johns v. Gragson, 89 Nev. 478, 515...
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