Olson v. City of Deadwood, 17602

• Citation: 480 N.W.2d 770
• Decision Date: 04 December 1991
• Docket Number: No. 17602,17602
• Parties: Arthur C. OLSON and Sophie A. Olson, Petitioners and Appellants, v. The CITY OF DEADWOOD, South Dakota, Appellee. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 770

480 N.W.2d 770

Arthur C. OLSON and Sophie A. Olson, Petitioners and Appellants, v. The CITY OF DEADWOOD, South Dakota, Appellee.

No. 17602.

Supreme Court of South Dakota.

Considered on Briefs Dec. 4, 1991.

Decided Feb. 5, 1992.

Rehearing Denied March 2, 1992.

Brad P. Gordon, Fuller & Tellinghuisen, Lead, for petitioners and appellants.

Steven M. Christensen, Mattson, Rachetto & Christensen, Deadwood, for appellee.

WUEST, Justice.

Appellants, Arthur and Sophie Olson (the Olsons) d/b/a Four Aces, appeal two orders entered by the circuit court dismissing their Petition for Writ of Certiorari brought pursuant to SDCL 11-4-25 through SDCL 11-4-29. The Olsons' initially appealed to the circuit court from a decision of the Deadwood City Planning and Zoning Commission (the Commission), sitting in its capacity as the Deadwood Board of Adjustment (the Board or Board of Adjustment) which, in separate actions, voted unanimously to deny the Olsons' proposed commercial use of the property in question. We affirm the circuit court.

The Olsons purchased land within the city of Deadwood and proposed to build a seventy-six-unit, twenty-four-hour motel with an accompanying restaurant, giftshop and lounge. This property is located in an area which lies east of Whitewood Creek which, in turn, lies east of Deadwood's Main Street. While there are many commercial enterprises in the immediate area on the west side of Main Street, including motels, there are none on the east side. ¹ On the east side of Main Street there is a narrow strip of land lying between it and the creek. The north end of this strip is bordered by McKinley Street which bridges Whitewood Creek. This area is owned by the city of Deadwood which presently uses the south end as a parking lot. Initially, the City planned to use the north end as the site for a new fire hall. That plan was later abandoned and the fire hall was located elsewhere.

The Olsons recognized the present access routes to their property would be totally unsatisfactory given the proposed use. The only access available was through existing residential streets. In lieu of using residential streets, they proposed to construct an 18.5 foot wide street platted as Fargo Street. This street would have run east from Main Street, between the City's then proposed fire hall and its present parking lot, and would cross Whitewood Creek on a bridge to be constructed (the Olsons were willing to build and maintain the requisite bridge).

The area in which the subject property lies is presently zoned under the City of Deadwood Zoning Ordinance as an historic district. It was previously zoned residential. Although commercial uses are permitted in this district, all proposed uses are subject to review. According to Section 6.5 B. of the ordinance:

All proposed uses of land and structures, including their cosmetic or structural alteration within the boundaries of the Historic District shall be subject to the following review procedure:

1. Review by the City Historic Preservation Commission as provided by City Ordinance 777.

2. Review by the State Historic Preservation Office as provided in SDCL 1-19-11.1.

3. Review by the Planning and Zoning Commission.

Section XV of the ordinance provides, in part, that:

A. Use on Review Permits may be issued by the Board of Adjustment, for any and only the uses required or permitted by the provisions of this ordinance, under the following procedures:

B. Standards for Use on Review. In granting a Use on Review, the Board of Adjustment shall ascertain that the following criteria are met:

1. That the use will not be injurious to the use and enjoyment of other property in the immediate vicinity for the purpose already permitted, nor diminish and impair property values of the vicinity;

2. That the use will not impede the normal and orderly development of surrounding property for uses predominant in the area;

3. That adequate utilities, access, drainage and other necessary facilities can be provided;

4. Any use permitted on review shall be established and conducted in conformity with the terms and conditions accompanying the approval of the permit.

The first decision with which we are concerned was made by the Board on May 1, 1990, at which time it heard, in joint session with the Commission, public comments on the Olsons' application for a "permitted use upon review" of the property owned by them. The Olsons' application and the joint hearings were all brought and held pursuant to the city of Deadwood's zoning ordinances. Both the Planning and Zoning Commission and the Board of Adjustment denied the Petitioners' request. The reasons stated were: (1) The use would be injurious to the residential character of the area, and (2) problems associated with access to the proposed site.

The Olsons petitioned the circuit court to review the Board's decision. The circuit court upheld the Board's decision in its November 1990 memorandum opinion. The Olsons moved for a new trial pursuant to SDCL 15-6-59(a)(4) and (6) (1984); ² and for a hearing via SDCL 19-10-5 (1987) on the propriety of the court's having taken what they considered to be judicial notice of the residential nature of the property in question. ³ The new trial motion was based on the fact the City had decided to build the new fire hall in a different location; and because the Olsons alleged insufficient evidence existed to support the Board of Adjustment's finding that the proposed use would be injurious to the uses already present in the immediate vicinity (residential). The circuit court denied the motion for a new trial ruling the planned fire hall was not a material consideration in its earlier decision. The circuit court also held its findings did not constitute judicial notice of the facts in question citing various places in the record where it had gleaned the pertinent facts.

After the circuit court denied the Olsons' request for a new trial, the Planning and Zoning Commission granted the Olsons a rehearing based upon changed circumstances. The evidence adduced at the previous hearing was incorporated by reference in the April 1991 hearing. The Olsons were allowed to present new evidence. The Commission again recommended denial of the proposed use. It did not state reasons for its denial. The Board then convened and denied the proposed use. Again, no reasons were specified.

The Olsons moved for a new trial again because of new evidence and because the Board failed to state reasons for its denial. After a hearing, the circuit court again determined the Board's decision was based on substantial evidence. But, because the Board failed to state reasons for its denial, the circuit court remanded to allow the Board to enter reasons for its denial.

Yet another hearing was held before the Board. It did not hear evidence, but entered reasons for denying the Olsons' "use on review" permit. One of the three voting board members was not present at the earlier rehearing and thus, had not heard the evidence. After the reasons were adopted, the circuit court dismissed the Olsons' petition.

The Olsons contend the action of the City in denying their application "was and is illegal inasmuch as said denial was not warranted by the facts, was unjust, arbitrary, capricious, and not based upon substantial evidence." Although the Olsons raise five issues in their brief, the real issue presented is whether the Board's actions constituted an abuse of discretion or were arbitrary or illegal. The Olsons' primary complaints are:

(1) that the Board based its decision only on public outcry which was uninformed, and therefore, there was no substantial evidence to support the Board's decision and,

(2) the reasons given by the Board were conclusory, merely restatements of the language of the ordinance, and therefore were arbitrary.

We initially determine our scope of review. In Graves v. Johnson, 75 S.D. 261, 266, 63 N.W.2d 341, 344 (1954), we stated: "As to a decision by a board of adjustment made pursuant to [SDCL 11-4-25 through 29], the question on ... review is whether an order of the board is supported by substantial evidence and is reasonable and not arbitrary." That statement was obiter dictum. Nonetheless, we feel it states the correct standard of review. 4 R. Anderson, American Law of Zoning 3d Sec. 27.30 (1986). See also Honn v. City of Coon Rapids, 313 N.W.2d 409, 416-17 (Minn.1981). Reasonableness is measured by examining whether standards set out in the local ordinance have been satisfied. Id. City of Barnum v. County of Carlton, 386 N.W.2d 770, 775 (Minn.App.1986); White Bear Docking v. City of White Bear Lake, 324 N.W.2d 174, 176 (Minn.1982). Substantial evidence is defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion[,]" Pierce v. Underwood, 487 U.S. 552, 564-65, 108 S.Ct. 2541, 2550, 101 L.Ed.2d 490, 504 (1988); Consolidated Edision Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126, 140 (1938), or "evidence which ... [affords] a substantial basis of fact from which the fact in issue can be reasonably inferred.... [I]t must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury." NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 299-300, 59 S.Ct. 501, 505, 83 L.Ed. 660, 665 (1939). "[The] phrase does not mean a large or considerable amount of evidence ...," Pierce, 487 U.S. at 564-65, 108 S.Ct. at 2549, 101 L.Ed.2d at 504, but means "more than a mere scintilla" of evidence, Consolidated Edison, 305 U.S. at 229, 59 S.Ct. at 217, 83 L.Ed. at 140.

We may not substitute our judgment for that of the Board. However, we must examine the entire record to determine whether its findings are supported by substantial evidence. 4 Anderson, supra, Sec. 27.30. See also Vetter v. Town of Bison, 278 N.W.2d 202, 203 (S.D.1979) (citing City of...