Vari-Build, Inc. v. City of Reno

Decision Date18 September 1984
Docket NumberNo. CV-R-83-250-ECR.,CV-R-83-250-ECR.
Citation596 F. Supp. 673
PartiesVARI-BUILD, INC., Plaintiff, v. CITY OF RENO, Barbara Bennett, Jim Thornton, Janice Pine, Peter Sferrazza, Joe McClellan, Dick Scott, Florence Lehners, Phil Herrington, Leann McElroy, and Robert S. Shoemaker, Defendants.
CourtU.S. District Court — District of Nevada

COPYRIGHT MATERIAL OMITTED

Franklin Cal Hoover, Reno, for plaintiff.

Charles L. Eddleman, Asst. City Atty., Reno, for defendants.

MEMORANDUM DECISION AND ORDER

EDWARD C. REED, Jr., District Judge.

Defendants' motion to dismiss this 42 U.S.C. § 1983 action has required consideration of matters outside the pleading. The Court, by Order filed December 16, 1983, advised the parties that the motion was being treated as a Fed.R.Civ.P. 56 motion for summary judgment. Both sides have supplemented the record, so that the Court feels fully advised.

The Complaint asks damages for Defendants' failure to issue a business license to Plaintiff for an eight kitchen/thirty-two bedroom living facility Plaintiff constructed under building permits issued to it. The individual defendants are all officers and employees of defendant City of Reno. The First Claim for Relief alleges violations of Plaintiff's due process and equal protection rights; the Second Claim for Relief charges breach of contract, based on the building permits and certificate of occupancy; the Third Claim for Relief sounds in negligence for failure to issue the business license.

Factual Setting

Plaintiff submitted plans for its "common kitchen" apartment-type facility to the Regional Planning Commission of Reno and Washoe County about February 4, 1981. The Commission approved the plans and, on February 17, 1981, building permits were issued. However, on April 27, 1981, the Reno City Council ordered that a stop work order be issued, because of alleged building code and zoning violations. Plaintiff commenced an action in State court and obtained an order lifting the stop work order. The basis for the court order was the failure of the City Council to give written notice to Plaintiff of the meeting at which the violations were considered. Construction resumed.

On June 1, 1981, the City of Reno ceased affiliation with the Regional Planning Commission. The City's Board of Adjustment then conducted a hearing on July 15, 1981, concerning Plaintiff's facility. It decided that Plaintiff was in violation of the building code and zoning restrictions. The Reno City Council affirmed the Board's decision. As to zoning, the Council reinterpreted a City ordinance. Instead of counting kitchens in a "common kitchen" facility to determine density, the Council decided the proper procedure was to count bedrooms. The longstanding policy of the City had been to count kitchens; at least three other similar "common kitchen" facilities had been approved and constructed in Reno during 1979 and 1980. Since Plaintiff's facility had thirty-two bedrooms, the new interpretation of the ordinance resulted in too many living units on the parcel of land. Thus, it was found to violate the zoning law, as well as the building code. Nevertheless, a certificate of occupancy was issued pursuant to order of the State court.

Plaintiff's application for a business license (required before the apartment units could be rented) was denied on August 6, 1981. The denial was upheld by the City Council on August 17, 1981, upon Plaintiff's appeal to it.

Plaintiff then commenced an action in State court, praying for damages and for a writ of mandamus commanding the City of Reno to issue a business license. On October 12, 1981, Nevada District Judge Peter I. Breen dismissed the claim for damages for the purpose of simplifying the trial of the mandamus action.

Judge Breen's Decision was handed down December 3, 1981, after a five-day trial. He found that it had been the policy of the City administrators, the City Attorney and the Regional Planning Commission to count the kitchens in ascertaining the number of units in a "common kitchen" apartment facility. He also stated that Plaintiff's project would have complied with zoning requirements had the policy not been changed by the City Council. The change was made when Plaintiff's construction was 85% completed. After the project had been finished, Plaintiff's application for a business license was denied on zoning grounds.

The Decision stated that the central issue was estoppel. "This is an equitable principle and I must consider if one who seeks equity is doing equity." Judge Breen pointed out that setback requirements had been violated, that the number and size of parking spaces were not in accordance with requirements, that the parking lot paving and base materials were not of required thickness, that certain railings were below standard, and that the facility was undervalued by Plaintiff in its application for building permits. In each instance the City was held to have had knowledge of the defects and to have approved them.

In discussing the principles of estoppel as applied against a city (generally a city can't be estopped by an erroneous act of its agent), Judge Breen noted that the doctrine could be invoked where municipal officers' actions had induced a party to act and where substantial loss would be suffered. He found that the City of Reno's former policy of counting kitchens induced Plaintiff to construct his project, with attendant expenditure of large sums of money.

Nevertheless, the Decision noted that Petitioner's twenty years experience as a builder in the area should have made it aware of the building code. The Judge found that Plaintiff was not induced to rely on anyone when it violated setback, parking space, railing, parking lot and valuation requirements. Combining this finding with the adverse effects of the project on its neighbors, Judge Breen held that it would be inequitable to apply estoppel against the City, and he denied the request for a writ of mandamus.

Toward the end of his Decision, Judge Breen wrote:

"As I have stated, I would grant the Writ were I dealing solely with the issue of the `common kitchen.' But I am not. Mandamus is an extraordinary remedy. A clear legal right to such relief must be shown. I have some doubt as to whether these violations can be corrected. In view of my conclusion, I see no need to discuss the other issues and motions presented."
Statute of Limitations

Nevada statute states that no action for judicial relief with respect to any final decision of any governing body "... granting or changing any land use classification or granting any special use or variance" is permitted unless the action is commenced within 25 days of the filing of notice of the decision. NRS 278.0235. Defendants contend that planning and zoning procedures constitute the basis for Plaintiff's Complaint herein, so that the statute applies. The Complaint was filed almost two years after the Reno City Council's upholding of the denial of a business license to Plaintiff.

The California statute involved in Willis v. Redden, 418 F.2d 702 (9th Cir.1969), was similar to NRS 278.0235 in that it, also, conditioned the right to sue upon a timely (within six months) filing of the action. The opinion declared that the effect was to qualify a federally created right. Therefore, the State statute was held to be inapplicable. See also Metropolitan Water District of Southern California v. State, Nev., 665 P.2d 262, 264 (1983); Aitchison v. Raffiani, 708 F.2d 96, 102 (3rd Cir.1983). Aitchison reasoned that a Pennsylvania six-month statute of limitations governing suits against government officials would be inconsistent with the remedial spirit of federal civil rights actions.

Since the Civil Rights Act provides no statute of limitations for an action brought under § 1983, federal courts look to the state within which the action arose. Smith v. Cremins, 308 F.2d 187, 189 (9th Cir.1962); Mason v. Schaub, 564 F.2d 308, 309 (9th Cir.1977). In the Ninth Circuit the state limitations statute applicable to actions upon a liability created by statute is borrowed. Plummer v. Western International Hotels Company, Inc., 656 F.2d 502, 506 (9th Cir.1981); Clark v. Musick, 623 F.2d 89, 92 (9th Cir.1980). The appropriate Nevada statute is NRS 11.190(3)(a), which imposes a three-year limitation. Mason v. Schaub, supra at 309.

Although the limitation period for a federal civil rights action may vary from state to state, all such actions brought within a single state are subject only to the period specified for a liability created by statute. Clark v. Musick, supra at 92; Garcia v. Wilson, 731 F.2d 640, 651 n. 4 (10th Cir.1984). Thus, the particular nature of a defendant's conduct is not determinative. Plaintiff's lawsuit herein is not barred by the statute of limitations.

Res Judicata and Collateral Estoppel

Defendants argue that the parties and the subject matter of the instant action are the same as those that were before Judge Breen in State court. They urge that his Decision operates as a bar because of the doctrines of res judicata and collateral estoppel.

Those doctrines do apply in § 1983 actions, so that a federal court must give preclusive effect to state court judgments involving the same issues or claims for relief. Heath v. Cleary, 708 F.2d 1376, 1379 (9th Cir.1983). The doctrine of res judicata precludes parties or their privies from relitigating a claim for relief that has been finally determined by a court of competent jurisdiction. Landex, Inc. v. State ex rel. List, 94 Nev. 469, 582 P.2d 786, 790 (1978). The preclusive effect in federal court is the same that the judgment would have in the courts of the state where it was obtained. Migra v. Warren City School Dist. Bd. of Education, ___ U.S. ___, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984); Heath v. Cleary, supra at 1379.

In order for res judicata to act as a bar:

(1) The issue decided in the prior adjudication must have been identical with the issue presented in the
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    ...cannot be validated by a procedurally correct review process that produces an equally arbitrary ruling. Vari-Build, Inc. v. City of Reno, 596 F.Supp. 673, 679 (D.Nev.1984). (K.S.A.1986 Supp. 19-27a06, enacted in 1983, prevents an unconstitutional taking by prohibiting the addition of land t......
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