US OUTDOOR ADVERT. CO., INC. v. Ind. Dept. of Transp.

• Decision Date: 20 August 1999
• Docket Number: No. 49A02-9803-CV-276.,49A02-9803-CV-276.
• Citation: 714 N.E.2d 1244
• Parties: U.S. OUTDOOR ADVERTISING COMPANY, INC., Appellant-Petitioner, v. INDIANA DEPARTMENT OF TRANSPORTATION, Appellee-Respondent.
• Court: Indiana Appellate Court

714 N.E.2d 1244

U.S. OUTDOOR ADVERTISING COMPANY, INC., Appellant-Petitioner, v. INDIANA DEPARTMENT OF TRANSPORTATION, Appellee-Respondent.

No. 49A02-9803-CV-276.

Court of Appeals of Indiana.

August 20, 1999.

William N. Ivers, Richard Winegardner, Marjorie Lawyer-Smith, Stewart & Irwin, Indianapolis, Indiana, Attorneys for Appellant.

Jeffrey A. Modisett, Attorney General of Indiana, Jon Laramore, Janet L. Parsanko, Deputy Attorneys General, Indianapolis, Indiana, Attorneys for Appellee.

OPINION

BROOK, Judge

Case Summary

Appellant-petitioner U.S. Outdoor Advertising Company, Inc. ("U.S.Outdoor") appeals the trial court's affirmance of the decision of appellee-respondent Indiana Department of Transportation ("INDOT" or "the department") to deny two of U.S. Outdoor's applications for outdoor advertising sign permits. We remand this cause to the department for additional factual findings.

Issues

U.S. Outdoor raises six issues for our review, which we combine and restate as follows:

(1) whether INDOT erroneously denied U.S. Outdoor's applications for outdoor advertising sign permits;

(2) whether INDOT was equitably estopped from denying the permit applications;

(3) whether INDOT violated U.S. Outdoor's due process rights;

(4) whether INDOT's denial of the permit applications deprived U.S. Outdoor of its right to free speech and equal protection; and

(5) whether INDOT's denial of the permit applications constituted an unconstitutional taking without just compensation.

Facts and Procedural History

The facts most favorable to the judgment indicate that on December 22, 1993, I-69, Inc. ("I-69," later known as "ABC Partners") applied to INDOT for outdoor advertising sign permits for two of their billboards located along Interstate 70 in Hancock County, Indiana: for the sake of convenience, we shall refer to these billboards as "the Shelby sign" and "the Bodkin sign."¹ By filling out the permit form, I-69 simultaneously applied for registration of the signs under IND.CODE § 8-23-20-25, which requires registration by December 31, 1993, of all outdoor advertising signs in existence on July 1, 1993, along federally-regulated and interstate highways. The General Assembly passed IND.CODE §§ 8-23-20-1 to -26 ("the Billboard Act") to comply with federal regulation of billboards and signs "in areas adjacent to the interstate and primary highway systems" under 23 U.S.C. § 131 and 23 C.F.R. § 750. IND.CODE § 8-23-20-1. INDOT subsequently adopted IND. ADMIN. CODE 105, 7-3-1 to -13 to "regulate the erection and maintenance of outdoor advertising signs" pursuant to IND.CODE § 8-23-20-25, which mandates that the department's administrative rules "be no broader than necessary to implement" the applicable federal regulations.

Both the Bodkin and Shelby signs were erected before 1968 and within 660 feet of the right-of-way line of Interstate 70. Under IND.CODE § 8-23-20-25(d), both signs were required to comply with INDOT's registration system and were subject to the department's permit regulations, which will be discussed in greater detail below. Sometime during 1994, U.S. Outdoor reconstructed both signs and installed new "faces" on the supporting structures. The methods and extent of this reconstruction, including a possible change in the size of the sign faces themselves, are vigorously disputed by the parties; as will be discussed below, however, we may not and need not attempt to unravel this Gordian knot before resolving the issues presented in this appeal.

On August 19, 1994, INDOT's right-of-way permit coordinator Deborah K. Hommel ("Hommel") sent two letters to U.S. Outdoor (by then working in partnership with ABC Partners), indicating that the Bodkin sign was ineligible for a permit "under applicable State and Federal Law" because it was "an existing non-conforming sign that ha[d] been replaced with a new sign structure," and that the Shelby sign was ineligible for a permit because it was "an existing non-conforming sign that ha[d] been reconstructed." Hommel further advised U.S. Outdoor that "[a] non-conforming sign is not allowed to be changed in any way other than its message." On September 20, 1994, INDOT received two letters dated September 13, 1994, from U.S. Outdoor's president and owner Leonard Busby ("Busby") appealing the denial of the permit applications.² The parties appeared at a hearing before an administrative law judge ("ALJ") on December 5 and 6, 1995. On May 2, 1996, the ALJ issued his proposed findings and recommended order, which recommended that INDOT affirm the denial of U.S. Outdoor's permit applications. With respect to the Shelby sign, the ALJ made the following findings and conclusions:

1. The sign was originally erected prior to 1968.

2. The sign was located within a control area and a permit was required.

3. The location of the sign was zoned residential.

4. A new sign was constructed at the location of the old sign and such used a torsion bar design.

5. The original design connected the poles directly to the sign face and did not use a torsion bar.

6. The new sign was ineligible for a permit under [IND. ADMIN. CODE 105, 7-3-6] because the area was not a zoned or unzoned commercial or industrial area. . . .

Parties stipulated that the original sign was erected prior to 1968 and there was no dispute that it was located within a control area. Ample evidence was presented that the area was not zoned commercial or industrial and was zoned residential and thus pursuant to [IND. ADMIN. CODE 105, 7-3-6] an existing sign is not eligible for a "legal" or unconditional permit. . . . Similarly, a new sign would not be eligible for a permit at this location due to improper zoning.

U.S. Outdoor argues that pursuant to the direction of INDOT employees this sign was repaired. Further, both [Busby and U.S. Outdoor field superintendent Steve Gibson ("Gibson") ] testified that material taken from the original sign, i.e. metal poles and stringers, were reused to rebuild the sign. Testimony of INDOT Inspector, Doris Harris, was that the sign had been completely reconstructed.

Respondent's [Exhibit R], in my view provides irrefutable visual evidence that a second sign was built in front of the old sign. This photograph, taken by Ms. Harris on 6/28/94, clearly shows the old sign, which was depicted prior to the second sign being built in [Respondent's Exhibit C], still standing and directly behind the newly constructed sign. The testimony of Ms. Harris coupled with the photographic evidence showing the two signs existing simultaneously is compelling evidence that the sign currently in existence is a new structure and as noted earlier would be ineligible for a permit.³

Even assuming arguendo, that the current sign is a mere reconstruction of the previous sign, it would still be ineligible for a permit. It is undisputed that the current sign utilizes a "torsion bar" design. Specifically, the poles connect to the torsion bar and the torsion bar holds the sign face in place. It is also undisputed that the previous sign utilized many poles and connected them directly to the sign face. [IND. ADMIN. CODE 105, 7-3-7(1) ] specifies that the "sign must remain substantially the same" as it was when it became nonconforming. Whether it is called a new sign or a reconstructed sign, the design is entirely different and clearly it has not remained the same as the original sign.

Regarding the Bodkin sign, the ALJ made the following findings and conclusions:

1. The sign was originally erected prior to 1968.

2. The sign was located within a control area and a permit was required.

3. The location of the sign was zoned residential.

4. The sign underwent renovation during 1994.

5. The height of the sign was changed from 18 to 25 feet.

6. The width of the sign face was increased from 36 to 60 feet.

7. The height of the sign face was increased [from] 12 to 20 feet.

8. The overall size of the sign face was increased from 432 to 1200 square feet.

9. The number of supports was changed from 10 to 5.

10. The design of the sign was modified from one where the pole connected directly to the sign face to a torsion bar design.

11. The changes in size and design preclude a determination that the sign had remained "substantially the same" within the meaning of [IND. ADMIN. CODE 105, 7-3-7(1)].

12. The subject structure has not remained substantially the same and is not eligible for a permit under [IND. ADMIN. CODE 105, 7-3-7(1)]. . . .

It was stipulated that the original sign was erected prior to 1968 and there was no dispute that the sign was located within a control area and thus required a permit. It was shown that the area was zoned R-1 or residential[ ]. . . .

The testimony of [Busby and Gibson] was that the sign was repaired using original materials which were reconditioned and reconfigured to carry out the repair. INDOT witness, Duane Myers, Permits Engineer disputed the testimony in several respects particularly as it relates to whether the poles used were from the original construction. It is unnecessary to resolve the conflicts in the testimony due to evidence relating to changes in the physical size of the sign. . . .

A comparison of the applications indicates that the height of the sign changed from 18 to 25 feet, the width of the sign face changed from 36 to 60 feet, the height of the face changed from 12 to 20 feet, and the overall size of the face increased from 432 to 1200 square feet. Further, the number of supports changes from 10 wooden posts to 5 steel posts. Testimony indicated that the design of the sign had changed from one where the poles were directly connected to the sign face to one where a torsion bar design was used.

Clearly, any of these modifications constitute a change in the sign such that nonconforming status was lost, rendering the sign ineligible for a permit under [IND. ADMIN. CODE 105, 7-3-7].

The ALJ made the following observations regarding both signs:

Another point raised relates to

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