State of Missouri, ED77979

Decision Date13 February 2001
Docket NumberED77979
PartiesState of Missouri, ex rel., Sunshine Enterprises of Missouri, Inc. D/B/A Sunshine Title and Check Advance, Appellants, Board of Adjustment of the City of St. Ann, Respondent. ED77979 Missouri Court of Appeals Eastern District 0
CourtMissouri Court of Appeals

Appeal From: Circuit Court of St. Louis County, Hon. Patrick Clifford

Counsel for Appellant: Laura Gerdes Bub and Jerry J. Murphy

Counsel for Respondent: Shulamith Simon

Opinion Summary: Sunshine Enterprises of Missouri Inc., d/b/a Sunshine Title and Check Advance (hereinafter, "Sunshine") appeals from the judgment of the trial court, affirming the decision of the Board of Adjustment for the City of St. Ann (hereinafter, "the Board") to deny Sunshine a business license to operate a payday loan business and declaring that an amendment to the City of St. Ann (hereinafter, "St. Ann") zoning code is valid.


Division Three holds: (1) The Board erred in finding that Sunshine's payday loan company was categorized as "check cashing or related services" and thus not a permitted use under St. Ann's zoning code. (2) Ordinance 2074, which prohibits all short-term loan businesses within St. Ann, is in direct conflict with Section 408.500 RSMo (1994), which permits the licensing and operation of such businesses, rendering Ordinance 2074 void.

George W. Draper III, Judge

Sunshine Enterprises of Missouri Inc., d/b/a Sunshine Title and Check Advance (hereinafter, "Sunshine") appeals from the judgment of the trial court, affirming the decision of the Board of Adjustment for the City of St. Ann (hereinafter, "the Board") denying Sunshine a business license to operate a payday loan business and declaring that an amendment to the City of St. Ann (hereinafter, "St. Ann") zoning code is valid. We reverse and remand.

We review the Board's action and not the judgment of the circuit court. Rice v. Board of Adjustment of Village of Bel-Ridge, 804 S.W.2d 821, 822 (Mo. App. E.D. 1991). Generally, our review is limited to a determination of whether the Board's action is supported by competent and substantial evidence upon the whole record, or whether it is arbitrary, capricious, unreasonable, unlawful, or in excess of its jurisdiction. Id. In determining whether substantial evidence exists to support the decision of the Board, we view the evidence, along with its reasonable inferences, in a light most favorable to the Board's findings. State ex rel. Alexander v. Board of Adjustment of City of St. Peters, 766 S.W.2d 458, 459 (Mo. App. E.D. 1989). If the decision is fairly debatable, this Court cannot substitute its opinion. State ex rel. Tucker v. McDonald, 793 S.W.2d 616, 617 (Mo. App. E.D. 1990).

Viewing the evidence in the light most favorable to the Board's decision, the facts are as follows: Sunshine is a Missouri corporation licensed by the State under Section 408.500 RSMo (1994)1 to operate as a small loan company. On February 5, 1999, Sunshine submitted an application to St. Ann for a business license to conduct a payday loan business and a title loan business. The City Clerk of St. Ann granted a license for the title loan business, but denied the license for the payday loan business because it would violate St. Ann Code Section 400.370. Section 400.370 enumerates the uses that are permitted within St. Ann's C-2 General Commercial District. Sunshine filed a petition for a variance on June 16, 1999, seeking approval to operate the payday loan business. On July 6, 1999, St. Ann passed an amendment to its zoning code, Ordinance 2074, defining a short-term loan establishment and prohibiting such business in any zoning district within St. Ann.

The Board granted Sunshine a hearing on the petition for variance on July 19, 1999. At the hearing, Sunshine's attorney and one of Sunshine's principals, Alan Ruben, testified about the nature of Sunshine's business and presented several exhibits to the Board. Sunshine specializes in providing short-term loans for a fee to consumers. Generally, the borrower goes to Sunshine to request a short-term loan. The borrower must complete an application providing Sunshine with name, address, social security number, references, and detailed information about the borrower's employment status, such as place of employment, address, phone number, salary, and how often the borrower receives a paycheck. In addition to the application, the borrower must present photo identification, proof of an active bank account, two pieces of mail verifying a mailing address, and a check stub verifying income.

The borrower then writes a post-dated check in the amount of the loan, a maximum of $300.00, plus the fee Sunshine charges, which is held for a minimum of fourteen days. Neither Section 408.500 nor the regulations require a check, but Sunshine does. Alan Ruben testified that Sunshine uses the post-dated check as documentation of a promissory note between it and the borrower, but it is not collateral or security for the loan. He emphasized Sunshine cannot deposit this check at any time prior to the fourteenth day or for the term of the loan, and it never cashes payroll, government, or personal checks of any kind unless directed by the borrower. At the end of the term, the borrower has the option of retrieving the post-dated check from Sunshine in exchange for repayment of the loan and the fee, or the borrower can direct Sunshine to deposit the post-dated check in satisfaction of the loan.

Alternatively, the borrower may choose to extend the term of the loan. In that instance, the borrower will retrieve the original post-dated check, pay the fee, and issue a new post-dated check with an additional fee to Sunshine, which in essence constitutes a new loan agreement. If the borrower fails to repay the loan, it becomes a collection issue, rather than Sunshine

depositing the post-dated check.

Sunshine presented several exhibits at the hearing, which included: Missouri Statute Section 408.500; St. Ann City Code Section 400.370 which enumerates permitted uses; Missouri Code Regulations Title 4, Section 140-11.010 (1991), Small, Small Loan Companies -- Licensing and General Provisions, and Missouri Code Regulations Title 4, Section 140-11.020 (1991), Small, Small Loan Companies -- Record keeping, which are the regulations promulgated by the Director of the Division of Finance; Ordinance 2074; Certificate of Registration to operate a Small, Small Loan Company from the Division of Finance; and a letter from the City Clerk granting a license for the title loan business. St. Ann offered a certified copy of Ordinance 2074, the zoning code, and photographs of Sunshine's business location and signage.

Sunshine conceded at the hearing it was "probably subject to [Ordinance 2074]," but mentioned that it believed there were other companies licensed to do business, or not licensed, but still doing business, as either small loan companies or check cashing establishments in St. Ann. Sunshine briefly mentioned that the definition of a short-term loan establishment might be interpreted broadly and seemed "pretty vague." The Board deferred ruling on the petition at the hearing so Sunshine could submit additional documentation as requested by the Board.

The Board revisited the petition during its September 20, 1999, meeting. The Board unanimously voted to deny Sunshine's request for a business license or a variance, and expressed an opinion that Sunshine was a check cashing business, emphasizing the post-dated check requirement. The Board notified Sunshine of its decision on October 21, 1999.

Sunshine appealed the Board's decision in the circuit court pursuant to Section 89.110,2 alleging inter alia, that the Board's decision was against substantial and competent evidence, violated state and federal equal protection provisions, and that there was a conflict between Ordinance 2074 and Missouri Statute Section 408.500. The trial court affirmed the decision of the Board to deny the license and/or variance, it dismissed the equal protection claim, and declared, adjudged, and decreed that Ordinance 2074 was valid. Sunshine appeals.

Sunshine's first point claims the trial court erred in affirming the Board's decision because the proposed payday loan business is not excluded by the generally listed permitted uses under the commercial zoning code. Sunshine urges us to construe Code Section 400.370 and its prohibition of "check cashing and related services" as meaning that those services which are of a class and directly connected to a check cashing business are prohibited, not the payday loan business Sunshine wishes to operate. Sunshine further points out that St. Ann granted a business license for the title loan company, despite the fact it is not a specifically listed permitted use. Sunshine also argues the payday loan business is similar to several other permitted uses enumerated in Code Section 400.370, including subsections B, D, and H.

The Board claims the trial court was correct in that the proposed payday loan business is not a permitted use under the commercial zoning code, and Sunshine presented no evidence that would warrant the grant of a use variance. We will not address the variance argument because Sunshine concedes that it was not technically seeking a variance, but merely appealing the City Clerk's decision not to issue a business license, even though it filed a petition for a variance.

Code Section 400.370, which enumerates several permitted uses, states in pertinent part:

* * * *

B. Personal services, including barbershop, beauty parlor, cleaning and laundry pick-up establishments, photographers, shoe repair, tailoring and dressmaking, but excluding pawn shops and establishments whose primary business is check cashing and related services.

* * * *

D. Banks, savings and loan associations, credit unions, stock brokers and title companies.

* * * *

H. Uses having the same or similar characteristics as the foregoing uses.

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