Whitehead Oil Co. v. City of Lincoln
| Decision Date | 22 April 1994 |
| Docket Number | No. S-92-423,S-92-423 |
| Citation | 245 Neb. 680,515 N.W.2d 401 |
| Parties | WHITEHEAD OIL COMPANY, a Corporation, Appellee and Cross-Appellant, v. CITY OF LINCOLN, Nebraska, a Municipal Corporation, Appellant and Cross-Appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Equity: Jurisdiction. Where a court of equity has obtained jurisdiction of a cause for any purpose, it will retain it for all, and will proceed to a final determination of the case, adjudicating all matters in issue, thus avoiding unnecessary litigation.
2. Ordinances: Zoning: Injunction: Equity. An action to declare a zoning ordinance void and to enjoin its enforcement is equitable in nature.
3. Actions: Governmental Subdivisions: Property. Inverse condemnation is a shorthand description for a landowner suit to recover just compensation for a governmental taking of the landowner's property without the benefit of condemnation proceedings.
4. Actions: Constitutional Law: Property. A landowner is entitled to bring an action in inverse condemnation as a result of the self-executing character of the takings clauses of the U.S. and Nebraska Constitutions.
5. Ordinances: Zoning: Property. Property interests are not created by the U.S. Constitution, they are created and their dimensions are defined by rules or understandings that stem from an independent source such as state law.
6. Ordinances: Zoning: Property. A land-use regulation or zoning ordinance which is an invalid exercise of police power may result in a taking, notwithstanding that not all economically viable use of the land is denied.
7. Ordinances: Zoning: Property. A land-use regulation does not cause a taking if it substantially advances legitimate state interests and does not deny an owner economically viable use of his or her land.
8. Constitutional Law: Property: Damages. Under Neb. Const. art. I, § 21, recovery may be had for damages to property occasioned by temporary takings.
9. Constitutional Law: Due Process: Property: Injunction: Damages. An arbitrary and capricious due process challenge may be either a facial or an as-applied challenge. For a facial challenge, the remedy is the striking of the regulation. In the case of an as-applied challenge, the remedy is an injunction preventing the unconstitutional application of the regulation to plaintiff's property, or damages resulting from the unconstitutional application, or both an injunction and damages.
10. Ordinances: Zoning: Property: Damages. In the case of a temporary regulatory taking, the landowner's loss takes the form of an injury to the property's potential for producing income or an expected profit. The landowner's compensable interest, therefore, is the return on the portion of fair market value that is lost as a result of the regulatory restriction.
William F. Austin, Lincoln City Atty., for appellant.
William G. Blake, of Pierson, Fitchett, Hunzeker, Blake & Loftis, Lincoln, for appellee.
This is the third appearance in this court of this longrunning controversy between Whitehead Oil Company, the plaintiff-appellee in this action, and the City of Lincoln, the defendant-appellant herein. In Whitehead Oil Co. v. City of Lincoln, 234 Neb. 527, 451 N.W.2d 702 (1990) (Whitehead Oil I ), we held that the district court had erred in granting the city a summary judgment on Whitehead Oil's challenge to the city's refusal to grant the former a use permit. Today, in Whitehead Oil Co. v. City of Lincoln, 245 Neb. 660, 515 N.W.2d 390 (1994) (Whitehead Oil II ), we affirmed the district court's subsequent ruling that the city's refusal to grant Whitehead Oil a use permit was arbitrary and capricious, and modified the district court's remand of the matter to the city for reconsideration, directing that the district court instead order the issuance of such a permit, subject to specified conditions.
In this action, the district court enjoined the city from enforcing a zoning ordinance and awarded Whitehead Oil damages in the amount of $762.50 per month from June 1, 1987 (the approximate date on which the city denied issuance of the use permit) to April 1, 1992 (the approximate date of the district court's decree herein), plus an attorney fee. The city appealed to the Nebraska Court of Appeals, assigning errors which may be summarized as claiming that the district court mistakenly (1) ruled the zoning ordinance in question was the result of arbitrary and capricious action and is thus unreasonable and unenforceable, (2) ruled that there had been a taking of Whitehead Oil's property, (3) ruled that the city had violated Whitehead Oil's civil rights, and (4) awarded Whitehead Oil damages. Whitehead Oil cross-appealed claiming that the district court's award of damages is inadequate. We, pursuant to Neb.Rev.Stat. § 24-1106(3) (Cum.Supp.1992), removed the case to this court in order to regulate the caseloads of the appellate courts and now affirm the decree of the district court, as modified in part V of this opinion, and remand with direction.
We begin our study of the scope of review by recalling that where a court of equity has obtained jurisdiction of a cause for any purpose, it will retain it for all, and will proceed to a final determination of the case, adjudicating all matters in issue, thus avoiding unnecessary litigation. Armbruster v. Stanton-Pilger Drainage Dist., 165 Neb. 459, 86 N.W.2d 56 (1957). Accord, Global Credit Servs. v. AMISUB, 244 Neb. 681, 508 N.W.2d 836 (1993); Travelers Indemnity Co. v. Heim, 223 Neb. 75, 388 N.W.2d 106 (1986); Trump, Inc. v. Sapp Bros. Ford Center, Inc., 210 Neb. 824, 317 N.W.2d 372 (1982). An action to declare a zoning ordinance void and to enjoin its enforcement is equitable in nature. Giger v. City of Omaha, 232 Neb. 676, 442 N.W.2d 182 (1989); Sasich v. City of Omaha, 216 Neb. 864, 347 N.W.2d 93 (1984). That some of the causes presented require us to apply federal substantive law is not significant, for we are free to apply our own procedural rules. Anderson v. HMO Nebraska, 244 Neb. 237, 505 N.W.2d 700 (1993).
Thus, while this case presents legal causes as well as the aforedescribed equity cause, we apply the equity standard of review to the entire matter. As that standard is set forth in Whitehead Oil II, we do not restate it here.
Inasmuch as the relevant facts are set forth in Whitehead Oil II, we proceed directly to our analysis of the city's appeal.
Our holding in Whitehead Oil II resolves adversely to the city its claim in the first summarized assignment of error that the district court erred in finding the zoning ordinance under which the city denied Whitehead Oil a use permit is unreasonable.
Accordingly, nothing further need be said in that regard, except to note that the district court properly enjoined the city from enforcing the ordinance.
In the second summarized assignment of error, the city claims the district court erred in finding that Whitehead Oil's property was temporarily taken.
The Fifth Amendment to the U.S. Constitution provides: "[N]or shall private property be taken for public use, without just compensation." The 5th Amendment is made applicable to the states through the 14th Amendment. First Lutheran Church v. Los Angeles County, 482 U.S. 304, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987); Penn Central Transp. Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978), reh'g denied 439 U.S. 883, 99 S.Ct. 226, 58 L.Ed.2d 198.
In addition, Neb. Const. art. I, § 21, provides that the "property of no person shall be taken or damaged for public use without just compensation therefor."
Whitehead Oil seeks damages in inverse condemnation under both the U.S. and Nebraska Constitutions. More specifically, it seeks the fair rental value of its property as a site for a convenience store of the type described in Whitehead Oil II from the date its use permit should have been issued.
Inverse condemnation is a shorthand description for a landowner suit to recover just compensation for a governmental taking of the landowner's property without the benefit of condemnation proceedings. Agins v. Tiburon, 447 U.S. 255, 100 S.Ct. 2138, 65 L.Ed.2d 106 (1980); Western Fertilizer v. City of Alliance, 244 Neb. 95, 504 N.W.2d 808 (1993); Dishman v. Nebraska Pub. Power Dist., 240 Neb. 452, 482 N.W.2d 580 (1992). A landowner is entitled to bring an action in inverse condemnation as a result of the self-executing character of the takings clauses of the U.S. and Nebraska Constitutions. First Lutheran Church v. Los Angeles County, supra; Western Fertilizer v. City of Alliance, supra; Dishman v. Nebraska Pub. Power Dist., supra.
The city attacks on two grounds the district court's finding that there has been a taking under the federal Constitution. First, it urges that Whitehead Oil is in no position to raise the issue because it has not exhausted its administrative remedies. Second, the city contends that as Whitehead Oil's property could always have been put to some viable economic use, there was no taking.
The city cites MacDonald, Sommer & Frates v. Yolo County, 477 U.S. 340, 106 S.Ct. 2561, 91 L.Ed.2d 285 (1986), reh'g denied 478 U.S. 1035, 107 S.Ct. 22, 92 L.Ed.2d 773; Williamson Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985); Lake Nacimiento Ranch Co. v. San Luis Obispo Cty., 841 F.2d 872 (9th Cir.1987), cert. denied 488 U.S. 827, 109 S.Ct. 79, 102 L.Ed.2d 55 (1988), and several other cases for the proposition that damages for a temporary taking may not be considered in the absence of a final decision regarding application of the offending regulation to the property...
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