Smith v. City of Lee's Summit

• Decision Date: 02 February 1970
• Docket Number: No. 25130,25130
• Citation: 450 S.W.2d 485
• Parties: Stewart E. SMITH et al., Appellants, v. CITY OF LEE'S SUMMIT, Missouri, et al., Respondents.
• Court: Missouri Court of Appeals

Page 485

450 S.W.2d 485

Stewart E. SMITH et al., Appellants, v. CITY OF LEE'S SUMMIT, Missouri, et al., Respondents.

No. 25130.

Kansas City Court of Appeals, Missouri.

Feb. 2, 1970.

Thomas J. Walsh, Lee's Summit, for appellants.

William A. Piedimonte, and C. William Kramer, of Piedimonte & Cochran, Independence, for respondent Homestead Enterprises, Inc.

Charles Edward Lavery, Lee's Summit, for respondents City of Lee's Summit and Board of Aldermen.

HOWARD, Judge.

This is a proceeding for writ of certiorari to review the action of the city council of the City of Lee's Summit, Missouri, sitting as a board of zoning adjustment, in granting a rezoning petition in the form of a special ten year use permit for the operation of a mobile home park in a recently annexed area of the city. The petition in the alternative sought a declaratory judgment and injunctive relief. After trial to the court without a jury, the court, pursuant to the writ of certiorari theretofore issued, affirmed the action of the city and denied the other relief prayed for. Such judgment has been duly appealed to this court. We shall refer to the parties as they appear below.

Plaintiffs contend that the trial court's affirmance of the zoning action of the city is erroneous because the rezoning ordinance was not properly passed due to a claimed conflict of interest of one of the council members; that the rezoning is invalid because of the lack of an overall plan for the entire recently annexed area and because it constitutes 'spot zoning'.

As to the claimed conflict of interest, we must consider the activities of two corporations and one individual: they are Homestead Enterprises, Inc., Homestead Developers, Inc., and an individual by the name of G. L. Little, who was the president and chief executive officer of both corporations. It appears that in May of 1966, Homestead Enterprises, Inc. filed an application for rezoning of a described tract of land in the northeast part of the city which had been annexed by the city on January 1, 1965. On August 9, 1966, a new or amended application for rezoning was filed. On August 22, 1966, one of the members of the city council, Logan Childers, entered into a lease for the rental of a small office space at 10 East Second Street in Lee's Summit. This building was owned by Homestead Developers, Inc. This lease was negotiated by G. L. Little and Mr. Childers. The first part of the lease recited that it was between Homestead Developers, Inc. as lessor and Logan Childers as lessee. However, the lease was signed by Childers and by G. L. Little. The corporate name of Homestead Developers, Inc. did not appear above or in connection with the signing of the lease. This lease was for one year at the rental of $50.00 per month with the right in the tenant to renew for an additional year and covered approximately 500 square feet of office space.

The amended zoning application of Homestead Enterprises, Inc. was the subject of a hearing by the zoning board on August 29, 1966, and by the Board of Aldermen on November 1, 1966. Both the proponents and opponents of the proposed rezoning testified extensively at both hearings. Thereafter, on December 20, 1966, the Board of Aldermen of the city passed Ordinance No. 981 granting the application for rezoning in the form of a ten year use permit for the purpose of operating a mobile home park. The vote on this ordinance was three 'yes' and three 'no'. Childers voted 'yes'. The tie was broken by the mayor who voted 'yes' and the ordinance was passed. G. L. Little testified by deposition taken by plaintiffs that the building owned by Homestead Developers, Inc. consisted of 9 offices, each essentially the same size. These were given even number addresses from 2 to 18, inclusive. At some time prior to the lease to Childers, units 16 and 18 had been combined into one unit. Although Little's testimony was presented in a disorganized and confusing manner, it appears that these units have rented at various times and for various periods for rentals ranging from $45.00 a month to $165.00 a month. The lease to Childers in August, 1966, called for a rental of $50.00 a month. The next year, although Childers had an option to renew at the same rent, a new lease was entered into at $60.00 per month. Little testified that there had been numerous vacancies in these offices and that the vacancies existed primarily in the middle of the building. He testified that the end units did not remain vacant. He further testified that nog long prior to the lease to Childers, an urban renewal program was announced which would change the grade of the street in front of the building and interfere with access thereto. He testified that in consequence thereof, more and more vacancies were occurring in these offices and those tenants who still occupied offices were giving notices to terminate their leases. Without a detailed recital of all such testimony, suffice it to say that we have carefully examined the record and conclude, as did the trial court, that this evidence does not disclose favored treatment given Mr. Childers. Even if we were to conclude that the rentals charged Childers were unduly low that would not be dispositive of the issue here presented.

Plaintiffs contend that this lease relationship created a conflict of interest and disqualified Childers from voting on the proposed rezoning. We first note that in Coffin v. City of Lee's Summit, Mo.App., 357 S.W.2d 211, this court specifically held that the action of the city council in passing upon zoning and rezoning matters is the exercise of a legislative function and under the doctrine of separation of powers, the courts will not inquire into the motive of a member of the city council in voting on legislative matters. This decision was cited with approval by our Missouri Supreme Court en Banc in the recent decision in Strandberg v. Kansas City, 415 S.W.2d 737, and the principles announced in the Coffin decision were approved and affirmed. Therefore, in the absence of any specific statutory provision, we would not inquire into the motive of Mr. Childers in casting his vote in favor of the rezoning and could not disqualify him from acting in his capacity as a member of the city council.

However, plaintiffs contend that by reason of the enactment of Sections 105.450 to 105.495, inclusive, V.A.M.S., which were enacted by Laws of 1965, H.B.No. 422, Mr. Childers was disqualified from voting because of an impermissible conflict of interest. The applicable provision is found in Section 105.495 and reads as follows:

'No officer or employee of an agency shall enter into any private business transaction with any person or entity that has a matter pending * * * upon which the officer or employee is or will be called upon to render a decision or pass judgment * * *'

This section further provides that if such private business transaction exists, the officer or employee shall be disqualified from acting.

Both parties seem to assume that this statute is applicable. Therefore, in spite of the obviously serious question of its applicability, when the definition of the word 'agency', as found in section 105.450, is read in conjunction with said section 105.495, we shall assume without deciding and for the purposes of this opinion only, that section 105.495 may be applicable. Likewise, we shall assume without so deciding, that such a leasing of office space would be a 'private business transaction' within the meaning of section 105.495.

Defendants' argument in opposition to the existence of the conflict of interest claimed by plaintiffs, points out that it is only a 'private business transaction with any person or entity that has a matter pending' which is proscribed by the statute. They emphasize that the zoning application was filed by Homestead Enterprises, Inc., whereas the leased premises were owned by Homestead Developers, Inc. These are two separate and distinct corporate entities. The evidence is that Mr. Little was president and chief executive officer of both corporations. Some of the other officers of the two corporations were the same. As to the directors, some individuals were directors of both corporations, whereas some individuals were...