Cross Plains v. Kitt's Field of Dreams
| Citation | 2009 WI App 142,775 N.W.2d 283 |
| Decision Date | 24 September 2009 |
| Docket Number | No. 2008AP546.,2008AP546. |
| Parties | TOWN OF CROSS PLAINS, Plaintiff-Respondent, v. KITT'S "FIELD OF DREAMS" KORNER, INC., Bow-Wow Entertainment LLC, Kitt J. Kalscheur, Gerald G. Wood, Jr. and Richard Bickel, Defendants-Appellants,<SMALL><SUP>†</SUP></SMALL> Robert D. Relph, Defendant. Kitt's "Field of Dreams" Korner, Inc., Plaintiff-Appellant,<SMALL><SUP>†</SUP></SMALL> v. Town of Cross Plains, Defendant-Respondent. Kitt's "Field of Dreams" Korner, Inc., Plaintiff-Appellant,<SMALL><SUP>†</SUP></SMALL> v. Town of Cross Plains, Defendant-Respondent. |
| Court | Court of Appeals of Wisconsin |
On behalf of the appellants, the cause was submitted on the briefs of Jeff Scott Olson of The Jeff Scott Olson Law Firm, S.C., Madison. There was oral argument by Jeff Scott Olson.
On behalf of the respondent, the cause was submitted on the brief of Mark Hazelbaker of Hazelbaker & Associates, S.C., Madison. There was oral argument by Mark Hazelbaker.
Before LUNDSTEN, VERGERONT and HIGGINBOTHAM, JJ.
This appeal concerns the nature of the vested interest required for a nonconforming use entitled to protection under WIS. STAT. § 59.69(10)(a) (2007-08).1 The circuit court held on summary judgment that the adult entertainment provided at a tavern for twelve days before the effective date of an ordinance amendment prohibiting that use in that zoning district did not constitute a nonconforming use under the statute. The appeal by the owners presents two primary issues. The first is: What, if anything, in addition to a use actually occurring on the effective date of the ordinance amendment, is required to constitute a vested interest for purposes of protection under § 59.69(10)(a)? We conclude that, in order for a use to be protected as a nonconforming use under § 59.69(10)(a), the business owner must have a vested interest in the continuance of that use, meaning that, were the continuance of the use to be prohibited, substantial rights would be adversely affected. In the context of § 59.69(10)(a)—relating to trade and industry—this will ordinarily mean that there has been a substantial investment in the use or that there will be a substantial financial loss if the use is discontinued.
¶ 2 The second issue is: What is the effect of the owners' knowledge of the pending ordinance amendment before they began to make expenditures and incur liabilities to establish the new adult entertainment use? We first conclude that, in order to acquire a vested interest in a use for purposes of WIS. STAT. § 59.69(10)(a), the business owner must reasonably rely on the then-existing ordinance when making expenditures and incurring liabilities. In the circumstances of this case, we conclude that, because the owners knew of the pending ordinance amendment before they made expenditures and incurred liabilities to establish the use, they did not reasonably rely on the then-existing ordinance.
¶ 3 Because the owners did not have a vested interest in use of the premises for adult entertainment, we conclude they did not have a nonconforming use entitled to protection under WIS. STAT. § 59.69(10)(a). Accordingly, we affirm.
¶ 4 For purposes of this appeal, the following facts are undisputed. In early 2005, a tavern business called Kitt's Korner was operating in the Town of Cross Plains, Dane County. There was a sports bar and a large open area for volleyball and events such as banquets, weddings, bands, and "fight nights." The zoning classification was C-1 Commercial under the Dane County zoning ordinance. Kitt Kalscheur was the sole owner of the corporation that owned the tavern business, Kitt's "Field of Dreams" Korner (Kitt's), and the sole owner of the entity that owned the real estate.
¶ 5 Beginning in 2004, Bow-Wow Entertainment, LLC, owned and operated an adult entertainment tavern in North Bristol, Dane County. As a result of the opening of this establishment, Dane County officials became aware that Dane County ordinances did not contain any provisions regulating adult entertainment and they began to consider proposals to address this. On January 31, 2005, a county board committee voted to approve an amendment addressing adult entertainment. The proposed amendment was scheduled for action by the county board on February 18, 2005.
¶ 6 Gerald Wood, a managing member of Bow-Wow, testified that he was aware an amendment requiring a zoning change for an adult entertainment tavern was going to be adopted sometime in early 2005. He began negotiations with Kalscheur that resulted in the execution of an agreement on February 11, 2005, whereby Bow-Wow purchased all of Kitt's stock. Kalscheur continued to own the real estate and leased it to Kitt's, now owned by Bow-Wow.
¶ 7 That same night, February 11, Kitt's began presenting nude dancers in the events area, using the name Hot Rods instead of Kitt's Korner. Wood acknowledged that he started on this date in order to attempt to beat the ordinance amendment and to be "grandfathered." The dancers performed on the stage that had been used for bands. A DJ was hired who brought in his own lights and sound system, which were used in addition to those that were already there. Cubicles were rented for private dance performances and placed in the events area. At some point a portable sign was put outside saying "adult entertainment tonight."
¶ 8 On February 19, 2005, the county board adopted an amendment to DANE COUNTY ORDINANCE § 10.151 (2004-05), and it became effective on February 23.2 The adult entertainment had by that date been offered every night since February 11 from 5:00 p.m. until 2:00 a.m.
¶ 9 On February 21, 2005, Kitt's obtained a building permit and thereafter began remodeling the events area to add balconies, private viewing cubicles, a stage with poles, dressing rooms, lighting, and other improvements. We will assume for purposes of this opinion that this remodeling began on February 21, 2005.
¶ 10 The subsequent dispute between the Town and Kitt's over the lawfulness of the adult entertainment and over the Town's revocation of the liquor license previously granted Kitt's resulted in three separate lawsuits. Besides Kitt's, the parties connected to the tavern are Kalscheur, Bow-Wow, Wood, and Richard Bickel, the other managing member of Bow-Wow. We will refer to all these parties collectively as "the owners" unless it is necessary to identify them separately. The circuit court consolidated the three actions and subsequently dismissed most of the claims on the grounds of mootness because Kitt's no longer operates a business at this location.3 The remaining claims were the owners' claims that they are entitled to damages under 42 U.S.C. § 19834 on various grounds.
¶ 11 Each side filed summary judgment motions, although the grounds varied. The dispositive issue for all the motions was whether the adult entertainment offered by Kitt's was a lawful nonconforming use under WIS. STAT. § 59.69(10)(a), thus allowing that use to continue despite the ordinance amendment.5 On this issue the parties agreed there were no disputed issues of fact, although they had different legal theories. The court concluded that the owners' use of the premises for adult entertainment from February 11, 2005, until the effective date of the ordinance amendment did not create a vested interest in an ongoing adult entertainment business and therefore did not constitute the use necessary for a lawful nonconforming use. Because the circuit court concluded that the adult entertainment use was illegal under the ordinance amendment, it concluded the owners' remaining claims were without merit and dismissed them.
¶ 12 On appeal the owners contend they are entitled to summary judgment because the undisputed facts show there was actual and active use of the tavern as an adult entertainment venue on the effective date of the ordinance amendment and that was sufficient to give them a vested interest in the continuance of that use for purposes of WIS. STAT. § 59.69(10)(a). The Town responds that the undisputed facts show there was not a lawful nonconforming use on that date because the owners had made no substantial investment in the use of the premises for adult entertainment, the use was of very recent origin, and it was not yet fully established. Thus, the Town asserts, the owners did not have a vested interest in continuance of that use. In addition, the Town argues that, because the owners knew of the pending ordinance amendment and nonetheless attempted to establish an adult entertainment use before the effective date, the use is not entitled to protection as a lawful nonconforming use.
¶ 13 The owners reply that the only relevant case law holds that a lawful nonconforming use under the statute must be actual and active on the effective date of the ordinance amendment. According to the owners, the considerations of investment, recent origin of use, and motive are irrelevant.6
¶ 14 Because we are reviewing a summary judgment, our review is de novo. Green Spring Farms v. Kersten, 136 Wis.2d 304, 314-15, 401 N.W.2d 816 (1987). Where, as here, there are no genuine issues of material fact, the issue is: Which party is entitled to judgment as a matter of law? See WIS. STAT. § 802.08(2).
¶ 15 Both parties agree that a business owner must have a vested interest in a use in order for it to be protected as a nonconforming use under WIS. STAT. § 59.69(10)(a). However, they disagree on the criterion for deciding if there is a vested interest. As noted above, the owners contend that we should consider only whether the use was actual and active on the effective date of the new law and that it is irrelevant whether they made any significant investment in that use or had only recently engaged in the use.
¶ 16 The resolution of this appeal requires that we interpret and apply the nonconforming use statute, WIS. STAT. § 59.69(10)(a), in the context of...
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