Sunrise Corp., Myrtle Beach v. Myrtle Beach

Decision Date26 August 2005
Docket NumberNo. 04-2171.,04-2171.
Citation420 F.3d 322
PartiesSUNRISE CORPORATION OF MYRTLE BEACH; Boulevard Development, LLC; S & H Development, Inc., Plaintiffs-Appellants, v. The CITY OF MYRTLE BEACH; Mark McBride, Individually; Judy Rodman, Individually; Rachael Broadhurst, Individually; Charles Martino, Individually; Wilson Cain, Individually; Crain Woods, Individually; Larry Bragg, Individually; Tom Conn, Individually; Tom Davis, Individually; Sally Howard, Individually; Fred Rourk, Individually, Defendants-Appellees.
CourtU.S. Court of Appeals — Fourth Circuit
420 F.3d 322
SUNRISE CORPORATION OF MYRTLE BEACH; Boulevard Development, LLC; S & H Development, Inc., Plaintiffs-Appellants,
v.
The CITY OF MYRTLE BEACH; Mark McBride, Individually; Judy Rodman, Individually; Rachael Broadhurst, Individually; Charles Martino, Individually; Wilson Cain, Individually; Crain Woods, Individually; Larry Bragg, Individually; Tom Conn, Individually; Tom Davis, Individually; Sally Howard, Individually; Fred Rourk, Individually, Defendants-Appellees.
No. 04-2171.
United States Court of Appeals, Fourth Circuit.
Argued May 25, 2005.
Decided August 26, 2005.

Page 323

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ARGUED: Howell V. Bellamy, Jr., Bellamy, Rutenberg, Copeland, Epps, Gravely & Bowers, P.A., Myrtle Beach, South Carolina, for Appellants. Frances Isaac Cantwell, Regan & Cantwell, Charleston, South Carolina, for Appellees. ON BRIEF: Douglas M. Zayicek, Bellamy, Rutenberg, Copeland, Epps, Gravely & Bowers, P.A., Myrtle Beach, South Carolina, for Appellants. William B. Regan, Regan & Cantwell, Charleston, South Carolina; L. Gregory Cook Horton, Adriane Malanos Belton, Buist, Moore, Smythe & McGee, P.A., Charleston, South Carolina, for Appellees.

Before WIDENER, WILKINSON, and NIEMEYER, Circuit Judges.

Affirmed by published opinion. Judge WIDENER wrote the opinion, in which Judge WILKINSON and Judge NIEMEYER concurred.

Page 325

WIDENER, Circuit Judge.


Plaintiffs, Sunrise Corporation of Myrtle Beach, Boulevard Development LLC, and S & H Development, Inc. (collectively Sunrise),1 appeal from the district court's granting of defendant the City of Myrtle Beach's (Myrtle Beach) motions for summary judgment.2 In the underlying case Sunrise was seeking damages for violations of the Due Process, Equal Protection and Takings Clauses of the Constitution under 42 U.S.C. § 1983, attorney's fees under 42 U.S.C. § 1988, and inverse condemnation. Finding that Sunrise is not entitled to any remedy, we affirm.

I.

In 1996, shortly after all three plaintiffs were formed, plaintiffs purchased the St. John Inn and surrounding land, an 88-unit hotel and restaurant located on 2.65 acres in the City of Myrtle Beach, looking to further development. Sunrise then examined the zoning regulations, decided on a proposal for a 14-story tower with 98-units, obtained financing, entered negotiations with a builder, and began to execute contracts to pre-sell individual units in the new tower.

Myrtle Beach's esthetic zoning laws require that every new construction requires approval of the Community Appearance Board before a building permit would issue, even if the plans complied with all zoning regulations. Myrtle Beach Code Appx. A § 603.1. Under this law, the Board is to consider preservation of the landscape; relation of the proposed buildings to the environment; drives, parking, and circulation; surface water drainage; utility service; advertising features; special features; and application of design standards. Myrtle Beach Code Appx. A § 604. If the Board denies the proposal, the applicant can appeal to the City Council, Myrtle Beach Code Appx. A § 606, which reviews the proposal de novo. Myrtle Beach Code Appx. A § 606.2. If the City Council affirms the Board, the applicant has the right to appeal to the Circuit Court in and for Horry County.3 Myrtle Beach Code Appx. A § 606.2.

In mid 1998, Sunrise applied for a permit to build the new hotel. They then submitted to the Board a proposal that complied with all of the zoning ordinances. The Board suggested changes to the proposal and later held a second hearing. This hearing was attended by residents of the area who voiced opposition to Sunrise's proposal. After the hearing, the Board denied the proposal, citing section 604 of the City Code. Sunrise then appealed the Board's decision to the City Council and was granted a hearing where area residents again voiced opposition to the proposal.

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Five days later the City Council denied the proposal because of its view that the proposal violated sections 601 and 604 of the City Code. Plaintiffs then appealed the decision of the City Council to the Circuit Court.

While the appeal of the City Council's decision was still pending, plaintiffs brought the instant action in the Court of Common Pleas of Horry County, a state court, seeking to recover their pre-development costs as well as lost profits from the pre-sale of units in the proposed tower. The complaint asserted causes of action against the City Council as well as several individual members of the Board. The complaint sought damages under 42 U.S.C. § 1983 for violations of the Due Process, Equal Protection, and Takings Clauses; 42 U.S.C. § 1988 for attorney's fees; and inverse condemnation under South Carolina state law. The defendants then removed the case to federal district court. The parties agreed to stay this action until the resolution of the state court appeal of the City Council's denial of plaintiffs' proposal.

On May 13, 1999, the Court of Common Pleas issued an order reversing the decision of the City Council withholding the permit, finding that Myrtle Beach's decision violated the holding of Peterson Outdoor Advertising v. City of Myrtle Beach, 327 S.C. 230, 489 S.E.2d 630 (1997)(Board's denial of proposal must be based on application of the City Code to the facts of the case), because it was arbitrary, subjective, without evidentiary support, an abuse of discretion, and a denial of plaintiffs' due process and equal protection rights. The court then determined that re-application would be futile and ordered Myrtle Beach to issue the permit to Sunrise. At some point in 1999, plaintiffs sold the site for approximately four million dollars.

Myrtle Beach appealed the Court of Common Pleas' decision to the South Carolina Court of Appeals, which affirmed in 2001. An appeal was then taken by Myrtle Beach to the Supreme Court of South Carolina, which initially granted certiorari, but later dismissed the writ as improvidently granted. At that point defendants made the permit available to plaintiffs.

After the Supreme Court of South Carolina dismissed the writ of certiorari, the district court lifted its stay in this case, and both parties later filed motions for summary judgment. At the hearing on the motions, the district court denied plaintiffs' motion for summary judgment which contended that the South Carolina Court of Appeals decision was res judicata of their § 1983 due process and equal protection claims, as well as granted defendants' motion for summary judgment on those same claims. The district court also reserved ruling on the rest of defendants' motion. Plaintiffs then filed a motion for reconsideration. The district court held a hearing on that motion, after which it improvidently dismissed two of the plaintiffs for lack of prudential standing,4 denied plaintiffs' motion for reconsideration, and granted the defendants' motion for summary judgment as to the takings and inverse condemnation claims.

II.

On appeal, plaintiffs advance five arguments as to how the district court allegedly erred. First plaintiffs assert that the district court erred by holding that Myrtle Beach was not barred by res judicata from arguing that it had not violated plaintiffs' due process, equal protection and Fifth Amendment rights. Second, plaintiffs argue that the district court

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erred in holding that Sunrise Development and S & H Development, Inc. did not have prudential standing.5 Third, plaintiffs assert that the district court erred in dismissing their due process claims and argue the Board's actions were illegitimate under the guise of the esthetic ordinance. Fourth, plaintiffs argue that the district court erred by dismissing their Equal Protection claim because they failed to present evidence as to being similarly situated and the victim of illegitimate discretion. Lastly, plaintiffs assert that the district court erred in dismissing their takings and inverse condemnation claims by holding that their intended use of the property was not an antecedent property right and that the delay was caused by the time required to get judicial review.

We review de novo a district court's grant of summary judgment. Temkin v. Frederick County Comm'rs, 945 F.2d 716, 718 (4th Cir.1991). Summary judgment under Rule 56(c) is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III.

Plaintiffs assert that the district court erred...

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