Western Land Equities, Inc. v. City of Logan

• Decision Date: 05 September 1980
• Docket Number: No. 16321,16321
• Citation: 617 P.2d 388
• Parties: WESTERN LAND EQUITIES, INC., a Utah Corporation; LeGrand E. Reeder and Leah Dawn Reeder, Plaintiffs and Respondents, v. CITY OF LOGAN, a Municipal Corporation; the Logan City Municipal Council; Mayor Desmond L. Anderson; Darwin W. Larsen; Carol W. Clay; Loye E. Martindale; Claude J. Burtenshaw and Glenn T. Baird, Defendants and Appellants.
• Court: Utah Supreme Court

Page 388

617 P.2d 388

WESTERN LAND EQUITIES, INC., a Utah Corporation; LeGrand E Reeder and Leah Dawn Reeder, Plaintiffs and Respondents, v. CITY OF LOGAN, a Municipal Corporation; the Logan City Municipal Council; Mayor Desmond L. Anderson; Darwin W Larsen; Carol W. Clay; Loye E. Martindale; Claude J Burtenshaw and Glenn T. Baird, Defendants and Appellants.

No. 16321.

Supreme Court of Utah.

Sept. 5, 1980.

J. Blaine Zollinger, Logan City Atty., Logan, for defendants and appellants.

John Preston Creer, Kent B. Scott, and Brian Ted Stewart of Senior & Senior, Salt Lake City, for plaintiffs and respondents.

STEWART, Justice:

Defendants appeal from a ruling of the district court that the City of Logan unlawfully withheld approval of plaintiffs' proposed residential plan and was estopped from enforcing a zoning change that prohibits plaintiffs' proposed use. We affirm the trial court's order.

In February 1969 plaintiffs purchased 18.53 acres of property within the City of Logan. In April 1976, pursuant to a new land use ordinance, the property was zoned M-1, a manufacturing zone which permitted single-family dwellings. Plaintiffs' intent was to use the property for moderately priced single-family housing.

The procedure for securing approval of single-family residential subdivisions is established by city ordinance. The ordinance requires consultation with the city planning commission, preparation and submittal of a preliminary plan showing compliance with minimum requirements of the subdivision ordinance, and approval of both preliminary and final plans by the city planning commission. The planning commission's practice is to introduce the preliminary plan at one meeting ("first reading") and discuss its merits and take action in a second meeting. Plaintiffs' project was introduced on July 13, 1977; the second reading was scheduled for August 10, at which time the advisability of the residential development was questioned and the matter was tabled and referred to the municipal council. On August 18, the municipal council reviewed the matter and referred it back to the planning commission with a recommendation that protective covenants be drawn up and that more roadways in and out of the proposed subdivision be provided. The second reading of the preliminary plan occurred before the planning commission on September 14, and the matter was tabled for 60 days. On October 12 the planning commission went on record as opposing subdivisions in M-1 zones, and on November 9 the commission rejected the proposed subdivision on the following grounds:

(1) Development of the proposed residential subdivision was contrary to the land use ordinance and to the city's master plan;

(2) The access roads provided by the plan were inadequate;

(3) The location of the railroad on three sides of the proposed subdivision made it an inappropriate site for housing.

In November plaintiffs unsuccessfully appealed the decision of the planning commission to the municipal council, and in December plaintiffs filed a complaint in district court. A restraining order was issued on January 3, 1978, enjoining the city from amending its zoning ordinance. The injunction was lifted on April 18, 1978, at which time a change in the zoning ordinance that had been enacted on January 19, 1978, became effective as it applied to plaintiffs' property.

In connection with plaintiffs' motion for summary judgment, the parties submitted stipulated statements of facts and issues. The issues submitted to the court were:

1. Did the M1 Land Use Description as set forth in the Logan City Land Use Ordinance of 1976, prior to the January 31, 1978 amendment, permit the development of subdivisions consisting of single family dwelling units on property zoned M1?

2. Does the amendment to the M1 Land Use Description of the Logan City Land Use Ordinance of 1976, which was adopted January 31, 1978 and which prohibits the development of single family dwelling units in the M1 zone except by special use permit, give Defendants the authority to deny approval of Plaintiff's Willow Creek subdivision which was submitted prior to the amendment ...?

Plaintiffs sought a determination, as a matter of law, that they had a vested right to develop a subdivision of single-family dwellings on their property and that defendants were estopped from withholding approval of the subdivision.

The trial court in its findings of fact and conclusions of law held that plaintiffs' proposed development was permissible under the zoning regulations in existence prior to January 31, 1978, that plaintiffs had substantially complied with procedural requirements and had a vested right to develop the proposed subdivision, and that defendants were estopped from withholding approval of plaintiffs' subdivision on the basis of the amended ordinance enacted after the application for subdivision approval had been submitted.

On appeal defendants argue that the planning commission was justified in its disapproval of plaintiffs' proposed subdivision because of its undesirable or nonconforming aspects. However, the statement of facts stipulated to by the parties and submitted to the trial court contained the following language:

It has not been contended by defendants that this preliminary plan did not comply in all particulars with the minimum requirements of the Logan City subdivision Ordinance with the exception that Logan City has raised questions concerning ingress and egress in and out of the subdivision, the fact that the subdivision is surrounded on three sides by railroad tracks and the need to establish protective covenants restraining manufacturing uses within the subdivision ....

The order of the court below made plaintiffs' right to develop their proposed subdivision contingent upon their compliance "with the reasonable requirements of the Logan City Ordinance." The trial court did not rule on the issue of whether the developers had failed, or were unable, to meet those requirements. We therefore do not consider on this appeal defendants' arguments concerning specific objectionable features of the subdivision plan.

Defendants also contend that, in any event, the application for approval of a subdivision does not create vested rights in the owner which immunize him from subsequent zoning changes. Since the decision of the court below was based on a finding that plaintiffs did have such a vested right, and not on the arbitrariness or unreasonableness of the commission's action, we deal only with the issue of whether the amendment to the zoning ordinance enacted by the city could be retroactively applied to plaintiffs' application for subdivision approval.

It is established that an owner of property holds it subject to zoning ordinances enacted pursuant to a state's police power. Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926). With various exceptions legislative enactments, other than those defining criminal offenses, are not generally subject to the constitutional prohibitions against retroactive application. The legality of retroactive civil legislation is tested by general principles of fairness and by due process considerations. ¹

This Court has previously dealt with the issue of retroactive application of zoning laws in Contracts Funding & Mortgage Exchange v. Maynes, Utah, 527 P.2d 1073 (1974). In Contracts Funding the plaintiff arranged to purchase property which was unzoned, and the application to construct mobile homes on the property was conditionally approved. Following a period of further review, during which time the objections of neighbors were considered, the building permit was denied, and soon thereafter a zoning ordinance was passed which excluded plaintiff's proposed use. This Court held that the date of application for a building permit fixed the applicable zoning laws and that the application could not be denied on the basis of a subsequently-enacted ordinance. There was no contention in that case that there were countervailing public interests that outweighed the right of the property owner to use his land pursuant to the law in effect at the time of application for a permit.

The holding of Contracts Funding is not in accord with the rule generally accepted in other jurisdictions that an applicant for a building permit or subdivision approval does not acquire any vested right under existing zoning regulations prior to the issuance of the permit or official approval of a proposed subdivision. Generally, denial of an application may be based on subsequently-enacted zoning regulations. See 8 McQuillin, Municipal Corporations § 25.155 (1976); 1 Anderson, American Law of Zoning § 6.23 2d ed. (1976); and cases cited in Annot., 50 A.L.R.3d 596, 607 (1973).

However, for the reasons discussed below, we are of the view that the majority rule fails to strike a proper balance between public and private interests and opens the area to so many variables as to result in unnecessary litigation. We hold instead that an applicant for subdivision approval or a building permit is entitled to favorable action if the application conforms to the zoning ordinance in effect at the time of the application, unless changes in the zoning ordinances are pending which would prohibit the use applied for, or unless the municipality can show a compelling reason for exercising its police power retroactively to the date of application.

In the present case, the trial court found that plaintiffs had acquired a vested development right by their substantial compliance with procedural requirements and that the city was estopped from withholding approval of the proposed subdivision. The court used the language of zoning estoppel, a principle that is widely followed. ² That principle estops a government entity from exercising its zoning powers to prohibit a proposed land use when a property owner, relying reasonably and in good faith on some governmental act or omission, has...