Whitehead Oil Co. v. City of Lincoln

• Decision Date: 22 April 1994
• Docket Number: No. S-92-422,S-92-422
• Citation: Whitehead Oil Co. v. City of Lincoln, 245 Neb. 660, 515 N.W.2d 390 (Neb. 1994)
• Parties: WHITEHEAD OIL COMPANY, a Corporation, Appellee, v. CITY OF LINCOLN, Nebraska, a Municipal Corporation, Appellant.
• Court: Nebraska Supreme Court

Page 390

515 N.W.2d 390

245 Neb. 660

WHITEHEAD OIL COMPANY, a Corporation, Appellee, v. CITY OF LINCOLN, Nebraska, a Municipal Corporation, Appellant.

No. S-92-422.

Supreme Court of Nebraska.

April 22, 1994.

Syllabus by the Court

1. Municipal Corporations: Appeal and Error. Neb.Rev.Stat. § 15-1201 (Reissue 1991) applies only where the various bodies controlled thereby act judicially or quasi-judicially.

2. Licenses and Permits: Equity: Appeal and Error. Use permit decisions are quasi-judicial in nature and reviewable under the provisions of Neb.Rev.Stat. § 15-1201 (Reissue 1991) as in equity in both the trial and appellate courts.

3. Equity: Appeal and Error. In an appeal from an equitable action, the reviewing court reviews the action de novo on the record and reaches a conclusion independent of the factual findings of the lower court; however, where credible evidence is in conflict on a material issue of fact, the reviewing court considers and may give weight to the circumstance that the trial court heard and observed the witnesses and accepted one version of the facts rather than another.

4. Municipal Corporations: Ordinances: Zoning: Appeal and Error. What is the public good as it relates to zoning ordinances affecting the use of property is, primarily, a matter lying within the discretion and determination of the municipal body to which the power and function of zoning is committed, and unless an abuse of this discretion has been clearly shown, it is not the province of the court to interfere.

5. Ordinances: Zoning: Appeal and Error. In passing upon the validity of zoning ordinances, an appellate court should give great weight to the determination of local courts especially familiar with local conditions.

6. Municipal Corporations: Ordinances: Zoning: Licenses and Permits. A zoning authority may not use its powers to reward its friends or punish its enemies; thus, where a zoning authority is guilty of misconduct or bad faith in its dealings with an applicant for a use permit in accordance with the then existing zoning regulation or arbitrarily and unreasonably adopts a new regulation in order to frustrate the applicant's plans for development rather than to promote the general welfare, the new regulation may not be applied retroactively.

7. Ordinances: Presumptions: Proof: Due Process. A legal presumption exists in favor of validity, and unless the contrary appears upon the face of an ordinance, the burden is upon the party attacking it as invalid to show by clear and unequivocal evidence that the regulation imposed by it is so arbitrary, unreasonable, or confiscatory as to amount to depriving such party of property without due process of law.

8. Zoning. Whatever the motives, a zoning decision which does not promote the general welfare is arbitrary and unreasonable.

William F. Austin, Lincoln City Atty., for appellant.

William G. Blake, of Pierson, Fitchett, Hunzeker, Blake & Loftis, Lincoln, for appellee.

BOSLAUGH, CAPORALE, FAHRNBRUCH, and LANPHIER, JJ., GRANT, J., Retired, RIST, District Judge, and RONIN, District Judge, Retired.

CAPORALE, Justice.

I. STATEMENT OF CASE

This is the second appearance of this matter in this court, which arises out of the refusal of the defendant and present appellant, City of Lincoln, to issue a permit entitling the plaintiff and present appellee, Whitehead Oil Company, to use its property in a particular way. In the first appearance, we, in Whitehead Oil Co. v. City of Lincoln, 234 Neb. 527, 451 N.W.2d 702 (1990) (Whitehead Oil I ), 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 a land-use permit and accordingly remanded the matter for further proceedings. Following those proceedings, the district court reversed the city's decision and remanded the matter to the city, directing that it reconsider Whitehead Oil's use application. The city appealed to the Nebraska Court of Appeals, claiming that the district court erred in so ruling. Under the authority granted by Neb.Rev.Stat. § 24-1106(3) (Cum.Supp.1992), we removed the matter to this court in order to regulate the caseloads of the appellate courts. We affirm as modified, and remand with direction.

II. SCOPE OF REVIEW

Whitehead Oil's appeal to the district court was taken pursuant to Neb.Rev.Stat. § 15-1201 (Reissue 1991) as an appeal from a final decision or order of the city council of a city of the primary class. Neb.Rev.Stat. § 15-101 (Reissue 1991). According to Neb.Rev.Stat. § 15-1205 (Reissue 1991): "The district court shall hear the appeal as in equity and without a jury and determine anew all questions raised before the city."

In an action seeking injunctive relief from an ordinance vacating a public street, we, without referring to § 15-1205, wrote:

It is apparent that under these statutory and charter provisions, the city council has the discretionary power to vacate streets and alleys. The exercise of this discretionary power "is not ordinarily subject to judicial review, unless there has been abuse of discretion, fraud, or glaring informality or illegality in proceedings, or absence of jurisdiction." Hanson v. City of Omaha, [157 Neb. 403, 59 N.W.2d 622] [ (1953) ] supra. See, also, 11 McQuillin, Municipal Corporations, § 30.187, p. 116 (3d Ed., 1977). In the present case, there was no evidence of fraud, informality or illegality in proceedings, or absence of jurisdiction. Therefore, the issue subject to judicial review is whether the city council so abused its discretion that the vacation ordinance can be held to be unreasonable and arbitrary.

Cather & Sons Constr., Inc. v. City of Lincoln, 200 Neb. 510, 519, 264 N.W.2d 413, 419 (1978).

We have also held that an appeal from an order or decision of the human rights commission of a city of the primary class, pursuant to § 15-1201, is to be heard as in equity and, upon further appeal to this court, is to be reviewed as an equity action. American Stores v. Jordan, 213 Neb. 213, 328 N.W.2d 756 (1982).

In Copple v. City of Lincoln, 210 Neb. 504, 315 N.W.2d 628 (1982), we clarified that § 15-1201 applies only where the various bodies controlled thereby act judicially or quasi-judicially. Were it otherwise, the statute would delegate legislative power to the courts in contravention of Neb. Const. art. II, § 1. Accordingly, we therein held that as the enactment of a zoning ordinance by a city of the primary class is a purely legislative act, such an enactment does not give rise to a direct appeal, the only remedy being by a collateral attack, such as seeking an injunction.

In Bowman v. City of York, 240 Neb. 201, 482 N.W.2d 537 (1992), after a review of prior decisions holding that consideration of the validity of a zoning ordinance was an equitable matter, we determined that a challenge of a zoning variance granted by a board of adjustment pursuant to Neb.Rev.Stat. §§ 19-910 and 19-912 (Reissue 1991) is not to be reviewed as an equitable matter. We announced the resulting standard of review as follows:

The considerations discussed in the foregoing two cases, coupled with the fact that § 19-912 permits an appeal to the district court only on the ground that a board of adjustment's decision is illegal, lead us to conclude that a district court may disturb a decision of such a board only if, as suggested in Frank v. Russell, 160 Neb. 354, 70 N.W.2d 306 (1955), and Mossman v. City of Columbus, 234 Neb. 78, 449 N.W.2d 214 (1989), the decision was illegal or is not supported by the evidence and is thus arbitrary, unreasonable, or clearly wrong. In deciding whether a board's decision is supported by the evidence, the district court shall consider any additional evidence it receives. See, e.g., Demarest v. Mayor & Council of Bor. of Hillsdale, 158 N.J.Super. 507, 386 A.2d 875 (1978); Richman v. Zoning Bd. of Adj., 391 Pa. 254, 137 A.2d 280 (1958).

....

We therefore now hold that an appellate court reviews the decision of the district court and that irrespective of whether the district court took additional evidence, the appellate court is to decide if, in reviewing a decision of a board of adjustment, the district court abused its discretion or made an error of law. Where competent evidence supports the district court's factual findings, the appellate court will not substitute its factual findings for those of the district court. See, Lambros v. Missoula, 153 Mont. 20, 452 P.2d 398 (1969); Estate of Barbagallo v. Zoning Hear. Bd., 133 Pa.Commw. 38, 574 A.2d 1171 (1990).

Bowman, 240 Neb. at 210-11, 482 N.W.2d at 544. Accord Barrett v. City of Bellevue, 242 Neb. 548, 495 N.W.2d 646 (1993).

Stratbucker Children's Trust v. Zoning Bd. of Appeals, 243 Neb. 68, 497 N.W.2d 671 (1993), adopted the same scope of review for an appeal taken to the zoning board of appeals of a city of the metropolitan class under the provisions of Neb.Rev.Stat. §§ 14-408, 14-413, and 14-414 (Reissue 1991).

However, § 15-1205, which controls the standard of review for appeals from decisions of the various organs of a city of the primary class, does not limit review to illegality, but, instead, provides that the appeal shall be considered as in equity. Decisions concerning the issuance of use permits involve the exercise of discretion in the application of use standards to the specific characteristics of the property in question. Such decisions are therefore quasi-judicial in nature and reviewable under the provisions of § 15-1201 as in equity in both the trial and appellate courts. See Mossman v. City of Columbus, 234 Neb. 78, 449 N.W.2d 214 (1989) (board of adjustment exercising discretion acts judicially).

In an appeal from an equitable action, the reviewing court reviews the action de novo on the record and reaches a conclusion independent of the factual findings of the lower court; however, where credible evidence is in conflict on a material issue of fact, the...