Walker v. City of Kansas City, Mo., 87-0939-CV-W-8.

• Decision Date: 20 October 1988
• Docket Number: No. 87-0939-CV-W-8.,87-0939-CV-W-8.
• Citation: 697 F. Supp. 1088
• Parties: Joe E. WALKER, Jr., d/b/a Last Chance Lounge, Plaintiff, v. CITY OF KANSAS CITY, MISSOURI, Defendant.
• Court: U.S. District Court — Western District of Missouri

697 F. Supp. 1088

Joe E. WALKER, Jr., d/b/a Last Chance Lounge, Plaintiff, v. CITY OF KANSAS CITY, MISSOURI, Defendant.

No. 87-0939-CV-W-8.

United States District Court, W.D. Missouri, W.D.

October 20, 1988.

Errol Copilevitz, John P. Jennings, Jr., Janet Davis Baker, Copilevitz, Bryant, Gray & Jennings, P.C., Kansas City, Mo., for plaintiff.

Dan G. Jackson, III, Asst. City Atty., Kansas City, Mo., for defendant.

ORDER

STEVENS, District Judge.

On June 28, 1988 this court issued a memorandum opinion and order finding that the city's C-X zoning ordinance was unconstitutional as applied to plaintiff Joe E. Walker, Jr. On August 3, 1988 the court held an evidentiary hearing on the proper scope of injunctive relief and on the issue of damages. Oral argument on the legal issues concerning the proper relief was held on September 2, 1988. The court has considered both the evidence and legal arguments presented by counsel at these two hearings and this order announces the court's holding in regard to the issues of damages and injunctive relief.

The facts giving rise to this case were discussed in detail in the court's June 28 order and need not be repeated here. See Walker v. City of Kansas City, Missouri, 691 F.Supp. 1243 (W.D.Mo.1988). In that order the court held that the city's C-X zoning ordinance, which regulates the location of various forms of adult entertainment, including go-go dancing, was unconstitutional as applied to Walker because the ordinance did not contain any objective standards for the city council to use in determining whether C-X zoning was appropriate in a particular location. Walker seeks injunctive relief and $250,000 in anticipated lost profits for the violation of his first amendment rights.

I. Injunctive Relief

Injunctive relief is a proper remedy for violation of a constitutional right when a plaintiff makes a showing of irreparable harm and inadequacy of legal remedies. Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506-07, 79 S.Ct. 948, 954-55, 3 L.Ed.2d 988 (1959). Once a plaintiff proves these two elements a "court may grant injunctive relief, but the relief must be no broader than necessary to remedy the constitutional violation." Newman v. State of Alabama, 683 F.2d 1312, 1319 (11th Cir. 1982), cert. denied, 460 U.S. 1083, 103 S.Ct. 1773, 76 L.Ed.2d 346 (1983).

Use of an injunction is especially appropriate in situations where zoning ordinances have been declared unconstitutional. As the Tenth Circuit Court of Appeals has noted

if the zoning ordinance is void ... the properties intended to be affected thereby are unzoned and the property owners may proceed with any other lawfully intended use. In such cases, the court is limited to the remedy of declaring the zoning ordinance void and finding that the property owner affected is entitled to use his property for any lawful purpose without regard to the void zoning ordinance.

Carter v. City of Salina, 773 F.2d 251, 255 (10th Cir.1985). This remedy is appropriate in situations where an ordinance has been declared unconstitutional on its face or where the ordinance is invalid as applied to a specific piece of property, as in the present case. Id. Courts in this district have consistently held that a permanent injunction is a proper remedy in situations where an invalid zoning ordinance has violated a business' or individual's first amendment rights. See, e.g., People Tags, Inc. v. Jackson County Legislature, 636 F.Supp. 1345 (W.D.Mo.1986) (court granted permanent injunction after finding that county ordinances regulating the location of adult movie theatres and bookstores were content-based regulations which violated the first amendment); Conlon v. City of North Kansas City, Missouri, 530 F.Supp. 985 (W.D.Mo.1981) (court issued permanent injunction against city after finding that city ordinance regulating solicitation for charitable or religious purposes was unconstitutionally vague because it gave impermissible discretion to city officials to determine whether solicitation permits would be issued).

At the September 2, 1988 oral argument the city attorney conceded, in response to a question from the court on the scope of injunctive relief, that in view of the court's holding in this case and his reading of the applicable case law an injunction against enforcement of the ordinance at Mr. Walker's location may be appropriate. The city attorney stated, however, that it was his belief the injunction should last only for the period that plaintiff maintains his leasehold interest in the property on which the Last Chance Lounge is located. The court agrees that in light of the June 28 order the city must be enjoined from enforcing the C-X zoning ordinance as to Mr. Walker. The court disagrees, however, with the city attorney's interpretation that the injunction may last only as long as Mr. Walker maintains his leasehold property interest.

Since the city may not enforce the C-X zoning ordinance against Walker, he may now have go-go dancing at the Last Chance Lounge. Thus, if the city adopts a new zoning ordinance at some future date, Walker's use of the property would become a nonconforming use. All zoning ordinances must contain a provision exempting existing nonconforming uses from their operation. City of Monett, Barry County v. Buchanan, 411 S.W.2d 108 (Mo.1967). See also People Tags, 636 F.Supp. at 1356 (adult bookstore, which had been in operation six days before the passage of one ordinance and almost a month before the passage of another was an existing nonconforming use); Boyce Industries v. Missouri Highway and Transportation Commission, 670 S.W.2d 147, 150 (Mo.App. 1984) ("All zoning restrictions are required to exempt from their immediate operation existing nonconforming uses.").

It is well-recognized that

a transfer or change of ownership is not an abandonment of the right to a nonconforming use. Thus, a noncomforming use may be transferred to a successor in title. Similarly, a lessee has the same right to use premises for a nonconforming use as was vested in the prior lessor or tenant.

P. Rohan, 6 Zoning and Land Use Controls § 41.036 at 41-93 to 41-95. Thus, assuming Walker begins to provide go-go dancing entertainment at the Last Chance Lounge, the bar will become a nonconforming use. The right to continue the nonconforming use is not personal to Walker but, rather, runs with the land.¹ Thus,

the fact that the nonconforming use was carried on by a tenant and that it is now contemplated to lease the land to a new tenant is not controlling. The right to continue the nonconforming use, once established and not abandoned, runs with the land and this right is not confined to any one individual or corporation. A vested right, unless abandoned, to continue the nonconforming use is in the land.

Eitnier v. Kreitz Corp., 404 Pa. 406, 172 A.2d 320, 323 (1961). See also Amico v. New Castle County, 101 F.R.D. 472, 483 (D.Del.1984), aff'd without opinion, 770 F.2d 1066 (3d Cir.1985) (vested right in nonconforming use exists if permitholder has made "some substantial expenditure, obligation or change in relation to land" even if the nonconforming use has not actually begun); Beasley v. Potter, 493 F.Supp. 1059, 1071 (W.D.Mich.1980) ("A party does not acquire a protected interest in a nonconforming use of property unless he can show nonconformance in a reasonably substantial manner."); Rohan, supra, cases cited at footnotes 104-106. As a result, once plaintiff begins business as a go-go dancing bar he will have a vested right in the nonconforming use, a right which runs with the land. Therefore, the court will grant plaintiff's request for a permanent injunction without imposing any limitations on that injunction.²

II. Damages

Plaintiff, three current or former owners of go-go dancing bars, and Fred Zimmerman, a private investigator with extensive experience in the city's liquor and amusement control department, testified at the August 3, 1988 hearing. Plaintiff attempted to establish, through the testimony of each of these witnesses, the amount of profits that could have been made had he been permitted to have go-go dancers at the Last Chance Lounge beginning in April 1986 when the City Plan Commission approved his application for C-X zoning and recommended that the city council approve the zoning.

Missouri courts have held that an individual may recover the anticipated profits of an established business "`only when they are made reasonably certain by proof of actual facts, with present data for a rational estimate of their amount; ...' as shown by `proof of the income and expenses of the business for a reasonable time anterior to its interruption, with a consequent establishing of the net profits during the previous period.'" All Star Amusement, Inc. v. Jones, 727 S.W.2d 930, 931 (Mo.App. 1987) (quoting Coonis v. Rogers, 429 S.W. 2d 709, 714 (Mo.1968)). While it is difficult for an established business to prove anticipated profits, "a new business labors under a greater burden of proof in overcoming the general rule that evidence of expected profits is too speculative, uncertain, and remote to be considered and does not meet the legal standard of reasonable certainty" since a new business has no past record upon which to base the figures. Handi Caddy, Inc. v. American Home Products Corp., 557 F.2d 136, 139 (8th Cir.1977).

In Handi Caddy, the court specifically noted that while Missouri law does not preclude a new business from recovering lost profits, an individual or corporation attempting to recover such profits must meet a greater burden of proof than would an established business. Thus, in order for a plaintiff to recover anticipated lost profits he must establish "actual facts, with data for a rational estimate of the anticipated profits' amount." Id. at 139. See also Rich v. Eastman Kodak Co., 583 F.2d 435, 437 (8th Cir.1978) (individual attempting to establish anticipated profits must show "continuing, average...