Viborg Cooperative Elevator Association (“VCEA”) owned property zoned agricultural that abutted a residentially zoned area. Armstrong and Petersen (“Abutters”) owned single-family residences on the abutting residentially-zoned property. In 2006, VCEA sought a building permit to construct a commercial grain storage facility on the Property, although what was really needed was a conditional use permit (CUP). By mistake, the zoning administrator issued the permit, and 12 days later she realized her mistake and informed VCEA that it needed a CUP. VCEA claimed that in those twelve days it had spent approximately $44,000 on the grain storage facility, but they did then apply for a CUP which was then denied based on an inadequate application. VCEA later filed a revised application.
Between the Board’s hearing on the original application and its hearing on the revised application, one of the Board members was replaced by Lyle Van Hove who was a county commissioner before the appointment. In his former role, he was involved in a dispute between the Abutters, who opposed the grain storage facility, and VCEA. Because Van Hove had been concerned with the county’s possible liability related to the zoning administrator’s mistake, he had contacted attorneys for both parties in an attempt to negotiate conditions that would satisfy the Abutters. Van Hove then participated in the hearing on VCEA’s revised application, and moved to approve the CUP, which was unanimously approved by the Board. The Abutters challenged the Board’s decision, claiming among other things that they were denied due process because Van Hove should have been disqualified due to a conflict of interest resulting from his earlier involvement trying to resolve the dispute.
The Supreme Court of South Dakota agreed that Van Hove had a disqualifying interest and that participation in the matter violated the Abutters’ due process rights. A local zoning board’s decision to grant a CUP is quasi-judicial, and is therefore subject to Fifth Amendment due process constraints, meaning that the board’s decision must be “fair and impartial.” The Court said that board members must: “be free from bias or predisposition of the outcome;”and “must consider the matter with the appearance of complete fairness.” A board member will have a disqualifying conflict of interest if: (1) the interest is different from the interest of members of the general public; and (2) a reasonably-minded citizen would conclude that the member’s interest “creates a potential to influence” the member’s impartially. Importantly, “[a] disqualifying conflict of interest may exist even if the official had not acted upon it.”
Although Van hove denied that he had an interest in the outcome of the CUP decision, the court concluded that his concern for the county’s potential liability was a qualifying interest because: (1) his interest as a county commissioner in the potential liability of the county because of the zoning administrator’s mistake was “different from the interest of the members of the general public;” and (2) a reasonably-minded person would conclude that Van Hove’s interest had the potential to influence his impartiality. As a result of Van Hove’s “possible influence” on the other Board members’ votes, the court vacated the CUP and ordered a new hearing without Van Hove’s participation.
Armstrong v. Turner County Board of Adjustment, 2009 WL 2707767 (S.D., 8/26/2009)
The opinion can be accessed at: http://www.sdjudicial.com/Uploads/opinions/25008.pdf
