Posted by: Patricia Salkin | August 5, 2013

Fed. Dist. Court in Florida Court Dismisses Takings and Due Process Claims

since 1982. Located directly across the street from the Plaintiff’s property is 898 West Montrose Avenue (the Subject Property). The Subject Property had been utilized as an auto repair shop from 1940 through March of 2003, when the owner at the time, Mr. Neimeyer abandoned the property, stopped paying occupational taxes and ceased to possess a valid occupational license to operate the premises as an automobile repair shop. In 2006, the Plaintiff purchased the subject property from Mr. Neimeyer with the intention of moving his business across the street.

In 1991, the City of Clermont, Florida enacted Ordinance 230-M which had the effect of designating the property located at 898 West Montrose Avenue as Central Business District- Established Business District (CBD- EBD). This designation enabled the properties to be used for certain enumerated commercial business purposes, however, the operation of an automotive repair business was not one of those uses. Nonetheless, the property was able to continue to be used as an automotive repair shop because it was considered a pre-existing “non-conforming use” and therefore was grandfathered in. The City’s comprehensive plan allows non-conforming uses to operate but they must continue to operate on the property without interruption in order to retain the status. Any non-conforming use of land or building which has ceased by discontinuance or abandonment for a period of one year loses its grandfathered status and the landowner must seek approval from the City and obtain a conditional use permit to continue the use.

From 2003-2006 there had been no attempt to use the Subject Property as an automotive repair business. Though Mr. Neimeyer had allowed Plaintiff to park cars on the property in exchange for landscaping, there had been no attempt to continue to use of an automotive repair shop. After acquiring the property, the Plaintiff applied for an occupational license to operate an automotive repair business on the Subject Property. The City denied the application based on the property’s zoning designation and the fact that the property had been abandoned for more than one-year thereby losing its non-conforming use status. Despite urging Mr. Neimeyer to renew the occupational license prior to the sale, there was no confirmation if such renewal took place (it did not). The City invited the plaintiff to apply for a Conditional Use Permit to operate the repair shop on the property. Instead, the plaintiff embarked on a campaign to exempt the property from the zoning designation by attempting to prove the 1991 rezoning was improper.

In 2007, the City amended its comprehensive plan to specifically address the use of the Subject Property. The amendment allowed the use of auto and truck repair service on the property provided the landowners apply for and obtain a conditional use permit. Despite this showing of good-faith by the City, the plaintiff refused to apply for a conditional use permit believing that the City would make numerous demands that plaintiff renovate the property and/or add structures that they did not believe they should be required to do. In 2011, the City issued a violation to plaintiff alleging they were using the subject property for an unpermitted commercial use- a repair shop- and demanded they cease all commercial business or obtain a conditional use permit. The Plaintiffs contend they never operated a business and simply allowed their staff to work on their own vehicles on the site.

Prior to the 2011 violation, Bee’s Auto had been cited in 2009 for posting a series of politically charged signs on the Subject Property. All the signs were in the nature of, and had language blasting the City and its officials for a perceived unjustness in not allowing plaintiff to operate on the Subject Property. In response to the citation, Bee’s Auto filed suit alleging violations of their first amendment right to free speech. The two sides settled the dispute which permanently enjoined the city from enforcing the ordinance which provided the basis of the citations. However, the settlement allowed the City to amend to create new ordinances whose enforcement would not be enjoined by the settlement. Adopting new oordinances regarding non-commercial signs, the City delivered another citation in 2011 over the signs. Following the citation, the plaintiffs filed a new suit against the City.

In their complaint against the City, the plaintiffs alleged six claims: (1) a state law claim for equitable estoppel; (2) an inverse condemnation/unlawful takings claim under the Fifth Amendment; (3) a constitutional claim under 42 U.S.C § 1983 for violation of procedural due process rights; (4) a constitutional claim under §1983 for violation of substantive due process rights; (5) a claim for declaratory and injunctive relief to prohibit enforcement of the Citation for operating on the subject property; and (6) a First Amendment claim for declaratory and injunctive relief to prohibit enforcement of the Citation for the non-commercial signs. Before the Court was the City of Clermont’s motion for summary judgment on all the claims.

First, the Court examined Bee’s Auto’s Equitable Estoppel claim. The plaintiffs argued that they purchased the property and incurred various expenses in good faith reliance “upon the continued and historic use of the subject property and that the City’s comprehensive plan would not be amended without proper procedures.” The plaintiffs asked the Court to declare they have a common law vested right to use the property as an automotive repair service and storage center and enjoin the City from enforcing the amended comprehensive plan. The Court rejects this argument. In Florida, the elements of a claim for equitable estoppel are (1) a property owner’s good faith reliance; (2) on some act or omission of the government; and (3) a substantial change in position or the incurring of excessive obligations and expenses so that it would be highly inequitable and unjust to destroy the right he acquired. The Court found that Bee’s Auto did not rely on an act or omission by the government when the amendment to the comprehensive plan was passed nearly 15 years prior to the plaintiff’s acquisition of the property. Moreover, the act or omission which changed the position of the subject property was the abandonment of the use by the prior owner. Finally, the Court says that the Plaintiffs are able to operate on the property once they apply for and obtain a Conditional Use Permit. Therefore, the Court grants Summary Judgment on the equitable estoppel claim.

Next, the Court looked at the Inverse Condemnation/Takings Clause claim set forth by the plaintiffs. Bee’s Auto alleged the regulation essentially deprives them of all economic use and the regulation unreasonable interfered with their investment-backed expectations. First, the Court examined the differences between a facial taking and an as-applied taking, noting that while the Plaintiff argues the regulations are a facial taking, their allegations actually allege an as-applied taking because while the ordinance does not deny all economic use (facial), it does serve to limit the ability of the owner to operate an automotive repair shop, which would be as-applied. Regardless of the distinction, the Court grants the City’s motion for summary judgment because the claim is not ripe until the landowner has made at least one meaningful application to the City. Again citing their unwillingness to apply for a conditional use permit, the Court says it is without jurisdiction to entertain the claim until one meaningful application has been filed.

Turning to the two due process claims, the Court rejects both the procedural and substantive due process claims for virtually the same reason. The Court agrees with the City’s argument that there can be no claim for procedural due process when a constitutionally adequate process exists and the plaintiffs refuse to avail themselves to it. The Court says the process of hearings before both the Zoning and Planning Board and the City Council, along with appellate rights to the City Manager prior to seeking judicial remedy is constitutionally sufficient and the City cannot be held to have violated procedural due process rights when the plaintiff is unwilling to partake in the process. The Court also denies the plaintiff’s substantive due process claim because the amendments to the comprehensive plan are not arbitrary, capricious regulations amounting to unconstitutional legislation because they were not legislative functions, rather they were executive actions seeking to carry out the intent of the legislature. When proper processes are in place, the Court says, there can be no claim of deprivation of substantive due process when non-legislative deprivations of state-created rights (including land-use rights) even if there are allegations of arbitrary and irrational action by the Government. Because the City’s zoning acts were executive, and not legislative, there can be no substantive due process claim and therefore the Court grants the City’s motion for summary judgment.

The plaintiff’s next argument, that they should be exempt from the City’s ordinances and operate an auto repair business without obtaining any approvals from the City was quickly dismissed by the Court. The Court says that the plaintiffs have offered no evidence which proves the ordinances to be unconstitutional and the fact that they refuse to apply for a Conditional Use Permit ‘mystifies” the Court.

Finally, the Court denied the City’s motion for summary judgment on the First Amendment claim. The plaintiffs challenged the ordinances restricting non-commercial speech both facially and as-applied. The Court doesn’t necessarily agree with the plaintiffs that the ordinances run afoul of the first amendment, but there is no evidence or detailed argument to say whether the City’s amended ordinances are constitutional despite differentiating between political and non-political signs. The Court ultimately denied the City’s motion because even though content-based restrictions are constitutional only if it can survive strict scrutiny review, there has been no argument by neither the City nor the plaintiff concerning strict scrutiny.

Bee’s Auto, Inc. v. City of Clermont, 2013 WL 764766 (MD FL 2/28/2013).

The opinion can be accessed at: http://scholar.google.com/scholar_case?case=10869955964232083955&hl=en&as_sdt=2&as_vis=1&oi=scholarr


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