L.M. Everhart Const., Inc. v. Jefferson County Planning Com'n

• Decision Date: 29 July 1993
• Docket Number: No. 92-2168,92-2168
• Citation: 2 F.3d 48
• Parties: L.M. EVERHART CONSTRUCTION, INCORPORATED, a West Virginia corporation, Plaintiff-Appellee, v. The JEFFERSON COUNTY PLANNING COMMISSION, a municipal corporation, Defendant-Appellant, and Paul J. Raco, Director of Planning of the Jefferson County Planning Commission; H. Richard Flaherty; Robert N. Warren; Cambell E. Tabb; Betty Braxton; Scott Coyle; Charles Lutman; Robert L. Mason; D. Lee Morgan; William Senseny; G. Page Wright, Jr.; Charles B. Clendening, III, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 48

2 F.3d 48

L.M. EVERHART CONSTRUCTION, INCORPORATED, a West Virginia corporation, Plaintiff-Appellee, v. The JEFFERSON COUNTY PLANNING COMMISSION, a municipal corporation, Defendant-Appellant and Paul J. Raco, Director of Planning of the Jefferson County Planning Commission; H. Richard Flaherty; Robert N Warren; Cambell E. Tabb; Betty Braxton; Scott Coyle Charles Lutman; Robert L. Mason; D. Lee Morgan; William Senseny; G. Page Wright, Jr.; Charles B. Clendening, III Defendants.

No. 92-2168.

United States Court of Appeals, Fourth Circuit.

Argued May 4, 1993.

Decided July 29, 1993.

Charles F. Printz, Jr., Bowles, Rice, McDavid, Graff & Love, Martinsburg, WV, argued for defendant-appellant.

Michael Lee Scales, Greenberg & Scales, Martinsburg, WV, argued for plaintiff-appellee.

Before MURNAGHAN and WILLIAMS, Circuit Judges, and BUTZNER, Senior Circuit Judge.

OPINION

WILLIAMS, Circuit Judge:

At issue in this case is whether the Jefferson County Planning Commission deprived L.M. Everhart Construction, Inc. (the Company) of vested property rights without due process of law. The Company claimed that the Planning Commission's conditional approval of a residential subdivision plat created a vested property right to develop the subdivision as approved, and that the application of a subsequently enacted zoning ordinance to the subdivision deprived it of that property right. The Company brought this action under 42 U.S.C. Sec. 1983 (1988), alleging that the Planning Commission deprived it of its right to substantive due process under the Fourteenth Amendment. ¹ A jury returned a verdict for the Company in the amount of $84,000. The Planning Commission moved for judgment as a matter of law, but the district court denied the motion. We conclude that the Company had no protectible property interest, and therefore reverse.

I.

The subdivision known as Patrick Henry Estates was controversial long before the Company acquired it in 1989. In 1977, the Company's predecessors in title submitted a proposed plat to the Planning Commission for approval. The Planning Commission refused to approve the plat because it did not comport with the Commission's comprehensive plan for development in the County and did not comply with the terms of the then-existing Subdivision Ordinance. The developers challenged that decision in state court and the state court ordered the Planning Commission to approve the plat and allow the developers to proceed. The Supreme Court of Appeals of West Virginia affirmed the decision of the lower court on the ground that the developers had fully complied with the subdivision regulations. Singer v. Davenport, 164 W.Va. 665, 264 S.E.2d 637, 641 (1980). Pursuant to the court order, the Planning Commission approved the subdivision plat on April 23, 1985, subject to the filing of a construction bond. The plat imposed no side setback requirements. ² Because no construction bond was filed at that time, the plat was neither sealed nor recorded in the county clerk's office.

In 1988, the Planning Commission drafted a proposed Zoning and Development Review Ordinance and conducted numerous public hearings regarding the adoption of the Ordinance. Lawrence Everhart, one of the Company's two shareholders, attended a June 1988 meeting of the Planning Commission but neither read the Zoning Ordinance nor inquired whether it would apply to existing subdivisions. He testified that he did not make such an inquiry because the "subdivisions that were in existence were always grandfathered whenever they changed the ordinance," (J.A. at 68), and that it was his "understanding" that the Zoning Ordinance would not apply to "anything on the record prior to the adoption" of the Ordinance, (J.A. at 60). Lawrence Everhart did not explain the basis for these beliefs; Jefferson County previously had never adopted a zoning ordinance.

Contrary to Lawrence Everhart's "understanding," the text of the Zoning Ordinance made clear that it would apply to all subdivisions in the County. Section 1.2 of the Zoning Ordinance stated, "[t]hese regulations shall apply to all properties within Jefferson County, West Virginia." Jefferson County, W.Va., Zoning & Development Review Ordinance Sec. 1.2 (1990) (Zoning Ordinance). Section 4.2 provided more specifically that "[e]xcept as hereinafter specified, no land, building, or premises shall hereafter be used, and no building or part thereof or other structure shall be located, erected, reconstructed, extended, enlarged, converted or altered except in conformity with the regulations herein specified." Zoning Ordinance Sec. 4.2. ³ After the public hearings concluded, the Planning Commission recommended passage of the Zoning Ordinance by the County Commission of Jefferson County. The County Commission adopted the Zoning Ordinance on July 7, 1988, and it became effective on October 5, 1988.

Section 5.5(b) of the Zoning Ordinance imposed a side setback requirement of twelve feet for residential lots under 10,000 square feet. Zoning Ordinance Sec. 5.5(b). All of the lots in Section D of Patrick Henry Estates were under 10,000 square feet in size.

On December 19, 1988, several months after the Zoning Ordinance became effective, the Company purchased Section D of Patrick Henry Estates. At the time of purchase, Section D was nothing more than raw land. ⁴ The Company posted the necessary construction bond and on February 3, 1989, officially recorded the final plat for Section D that had been approved by the Planning Commission in 1985. Shortly after the Company applied for its first building permits in June 1989, the Planning Commission informed it that the side setback requirements applied to its lots. The Company thereafter sought a variance from the side setback requirements for all of the lots in Section D because the setback requirements made it "difficult to locate a house on the lot." (J.A. at 545.) The Commission denied the blanket variance but agreed to consider requests for lot-by-lot variances from the setback requirements. The Company did not appeal the denial of the blanket variance, but did pursue a number of individual variances. Although the Company was granted two requests for a variance, at least ten others were denied after protests from several members of the public. The Company did not appeal the denial of the ten variance requests.

Exasperated by the variance process, Lawrence Everhart and other developers asked the Planning Commission to amend the Zoning Ordinance to reduce the side setback requirements. The Planning Commission acknowledged that the Zoning Ordinance had caused hardship for the developers, and recommended to the County Commission that it reduce the side setback requirements. In response to the Planning Commission's recommendation, the County Commission amended the Zoning Ordinance to reduce the side setback requirements for lots under 30,000 square feet from twelve feet to eight feet. Zoning Ordinance Sec. 9.7. The amendment alleviated the problems of many of the developers in the County, but did not satisfy the Company. The Company requested that the side setbacks be further reduced from eight feet to five feet. When the Planning Commission failed to act upon its request, the Company filed this lawsuit.

II.

In deciding a motion for judgment as a matter of law, the district court must determine, without considering the weight of the evidence or the credibility of witnesses, whether " 'there can be but one conclusion as to the verdict that reasonable jurors could have reached.' " Gairola v. Virginia Dep't of Gen. Servs., 753 F.2d 1281, 1285 (4th Cir.1985) (quoting Wheatley v. Gladden, 660 F.2d 1024, 1027 (4th Cir.1981)). We review the decision of the district court de novo. Id.

Section 1983 imposes civil liability upon anyone who

under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws.

42 U.S.C. Sec. 1983. The Company contended at trial that the Planning Commission deprived it of substantive due process under the Fourteenth Amendment by arbitrarily and capriciously applying the Zoning Ordinance to Patrick Henry Estates, thereby depriving it of its vested property right to develop the property as it was approved by the Planning Commission. Specifically, the Company alleged that the Zoning Ordinance unlawfully imposed twelve-foot side setback requirements on the subdivision. The Company contended that the setback requirements prevented it from developing the subdivision as approved and rendered the lots in the subdivision "virtually worthless." (J.A. at 10.)

To establish a denial of substantive due process, the Company must show that it was arbitrarily and capriciously deprived of a "cognizable property interest, rooted in state law." Scott v. Greenville County, 716 F.2d 1409, 1418 (4th Cir.1983); see also United Land Corp. of Am. v. Clarke, 613 F.2d 497, 501 (4th Cir.1980). The property interest must be more than a "unilateral expectation"; it must be a "legitimate claim of entitlement." Biser v. Town of Bel Air, 991 F.2d 100, 104 (4th Cir.1993) (quoting Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972)) (internal quotations omitted). "If there is no cognizable property interest, there is no need to reach the question of whether a purported deprivation was arbitrary or capricious." Gardner v. City of Baltimore Mayor & City Council, 969 F.2d 63, 68 (4th Cir.1992).

To establish that it possessed a protectible property interest under West Virginia law, the Company relied on Sec. 8-24-50 of the West Virginia Code, which provides that no zoning ordinance may

prohibit the continuance of the use of any land, building or structure for the...