Lamar Advert., L.L.C. v. City of Rapid City, #28903

• Citation: 2020 S.D. 30
• Decision Date: 03 June 2020
• Docket Number: #28903,#28923
• Parties: LAMAR ADVERTISING OF SOUTH DAKOTA, L.L.C., a South Dakota Limited Liability Company, Plaintiff and Appellant, v. CITY OF RAPID CITY, a South Dakota Municipal Corporation, and EPIC OUTDOOR ADVERTISING, a South Dakota Corporation, Defendants and Appellees.
• Court: South Dakota Supreme Court

2020 S.D. 30

LAMAR ADVERTISING OF SOUTH DAKOTA, L.L.C.,a South Dakota Limited Liability Company, Plaintiff and Appellant, v. CITY OF RAPID CITY, a South Dakota Municipal Corporation,and EPIC OUTDOOR ADVERTISING, a South Dakota Corporation, Defendants and Appellees.

#28903

#28923

SUPREME COURT OF THE STATE OF SOUTH DAKOTA

CONSIDERED ON BRIEFS NOVEMBER 4, 2019

June 3, 2020

#28903, #28923-a-PJD

APPEAL FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT PENNINGTON COUNTY, SOUTH DAKOTA

THE HONORABLE CRAIG A. PFEIFLE Judge

EDWARD C. CARPENTER of

Costello, Porter, Hill, Heisterkamp,

Bushnell & Carpenter, LLP

Rapid City, South Dakota

Attorneys for plaintiff and

appellant.

JOEL P. LANDEEN

CARLA R. CUSHMAN of

City of Rapid City

Rapid City, South Dakota

Attorneys for defendant and

appellee City of Rapid City.

MICHAEL K. SABERS of

Clayborne, Loos & Sabers, LLP

Rapid City, South Dakota

Attorneys for defendant and

appellee Epic Outdoor

Advertising.

DEVANEY, Justice

[¶1.] In this appeal, Lamar Advertising contends that the circuit court erred in failing to declare that the City of Rapid City unlawfully bargained away its police power when it entered into a settlement agreement with Epic Outdoor Advertising under which the City agreed to amend certain sign code ordinances and grant Epic two sign permits. By notice of review, Epic asserts the circuit court erred in denying Epic's request that the court declare invalid a similar settlement agreement previously executed between Lamar and the City. We affirm.

Factual and Procedural Background

[¶2.] In 2015, Epic petitioned the circuit court for a writ of certiorari, challenging the Rapid City Board of Adjustment's (the Board) decision to prohibit Epic's use of four video signs. The signs were constructed prior to the City's ban on video signs, and the City applied its ban retroactively against Epic's signs. The circuit court granted Epic's petition and reversed and remanded the Board's decision. Both the City and Epic appealed the circuit court's decision to this Court. While the appeal was pending, however, the parties negotiated a proposed settlement agreement "to memorialize the terms of a settlement reached between the parties for the complete and final disposition of their claims, differences, and causes of action arising out of" the above lawsuit. The agreement specifically provided that it did not resolve any claim related to a separate lawsuit pending between Epic and the City.

[¶3.] On March 23, 2018, the City posted a summary of the proposed settlement agreement as an agenda item for its March 28, 2018 legal and financecommittee meeting. The summary explained the reason for the agreement and identified the proposed terms. The "Recommendations" section related the following: "Action: Approve or Deny[;] Notes: Since the parties have briefs they will need to file time is of the essence. Epic needs an up or down vote." The summary explained the following options: "If you approve the settlement agreement staff will begin working on the ordinance amendments necessary to fulfill the City's commitments. Once the ordinance amendments are approved and become effective, the lawsuits will be dismissed. If you reject the parties will continue the appeal on this case to a final resolution."

[¶4.] The settlement agreement was listed as an agenda item at the City Council's April 2, 2018 meeting. The agreement had been revised prior to the City Council meeting, and at the meeting, the City attorney explained the revision. Also during the meeting, counsel for Epic related a history of the lawsuit and the rationale behind the settlement agreement. Multiple citizens opposed the agreement. Of those opposing, one citizen expressed the need for the City "to change the way the industry is allowed to operate" and another specifically asked that the Council not sign the agreement.

[¶5.] A motion was made to deny the agreement, and during a discussion on the motion, a council member expressed concern over approving an agreement without knowing the proposed changes to the ordinance. This council member specifically opposed the agreement, believing it would essentially tie the Council's hands. Counsel for the City remarked that "it would be a breach of the agreement if council didn't sign the future ordinance."

[¶6.] After additional concerns were shared, a substitute motion was made to approve the settlement agreement. A council member, although supporting the motion to approve, noted frustration regarding efforts made to eliminate the presence of billboards. He explained that the City "gets sued" and "lose[s]" and the City "keep[s] spending the taxpayer's dollars over and over to lose again." Epic's counsel answered questions regarding the settlement agreement, and after considering additional comments from council members, the council voted 7 to 3 to approve the agreement.

[¶7.] The settlement agreement provides in relevant part:

1. Within ninety (90) days of this Agreement being approved by the City, the City agrees to amend its ordinances to increase the maximum size of off-premises signs (billboards) along Interstate 90 within the City to Six Hundred and Seventy-two (672) square feet. The City also agrees as part of this ordinance amendment to increase the maximum sign pole height for off-premises signs along Interstate 90 from thirty (30) feet to forty (40) feet as measured from the base of the pole to the top of the pole. The City can accomplish these changes through the creation of a zoning overlay district along the Interstate.

2. Within ninety (90) days of this Agreement being approved by the City, the City agrees to amend its ordinances to remove any requirement to obtain a conditional use permit for any work to an existing off-premises sign. The City will continue to require that a conditional use permit be obtained for any new off-premises signs.

. . . .

5. That Epic and the City agree that it has been and is important to the City that there is not a proliferation of billboards. With that understanding, Epic has already obtained a conditional use permit on a location commonly referred to as Dyess Avenue where it can currently construct a digital billboard in a size commonly known as poster size. This settlement would allow Epic to construct the digital billboard but in the size allowed in the interstate district as provided herein. The City of Rapid City agrees that this larger board willbe permitted as provided for in Exhibit 1 and that will be granted contemporaneous with this agreement being signed. The parties agree that the issuance of the Dyess Avenue Board will require the use of two sign credits. The second board discussed is the Deadwood Avenue billboard which is an older existing billboard controlled by the same owner as my client [Epic]. The City agrees that by ratifying this agreement it would also be approving the permit for the Deadwood Avenue sign under the interstate district contemplated herein and attached as Exhibit 2. The ratification of this agreement results in no billboards that are already approved or otherwise in existence. The parties agree that the issuance of the Deadwood Avenue Board would also require the use of two sign credits as required under the existing ordinance.

. . . .

7. If this Agreement is ratified, the parties will jointly file a motion to the South Dakota Supreme Court seeking to continue the filing dates for the current appeal or otherwise hold this matter in abeyance pending the City fulfilling its obligations under this Agreement. Within ten (10) days after the ordinances identified in sub-sections (1) and (2) have been approved and the period in which they can be referred has past, the parties authorize their attorneys to execute a Stipulation for the Court to enter a Judgment of Dismissal of the claims they each have made against the other in the pending lawsuit identified in Section One of this Agreement.

. . . .

The terms of this agreement are non-severable and, unless otherwise agreed to by the parties, this Agreement shall terminate if any term or provision of this Agreement fails or is held by a court of competent jurisdiction or other competent authority to be invalid, void, or otherwise unenforceable.

On April 3, 2018, following approval of the settlement agreement, Epic and the City filed a joint application under SDCL 15-26A-76 to stay the appeal pending before this Court. We granted the stay, and a subsequent application for a similar stay.

[¶8.] In May 2018, prior to any amendments being made to the ordinances, Lamar filed a declaratory judgment action against the City and Epic, requesting that the circuit court declare the settlement agreement invalid. According toLamar, the City bargained away its zoning authority by agreeing to rezone in advance of the required notice and hearing and by agreeing to issue sign permits to Epic in violation of the existing sign code. Lamar requested that the circuit court find "that any actions taken pursuant to the [agreement] are void ab initio and of no legal force[.]"

[¶9.] Epic and the City filed separate answers. The City denied that it had bargained away its zoning authority, indicating that any amendments to the ordinances "will go through the required legal process where they may be approved or rejected by the City Council." The City further claimed that the settlement agreement is conditional. Alternatively, the City asserted the affirmative defenses of waiver and estoppel. It claimed that because Lamar and the City entered into a similar settlement agreement in 2016, Lamar should be barred from claiming that the settlement agreement between Epic and the City is void.

[¶10.] Epic likewise asserted that the settlement agreement is valid and that Lamar should be estopped from asserting that Epic's agreement is invalid because Lamar waived that claim by entering into its similar agreement with the City. Alternatively, Epic requested that in the event Lamar "is successful in its legal allegations claiming the Epic...