Posted by: Patricia Salkin | February 4, 2016

VA Supreme Court Holds Refusal to Extend CUP Had a Rational Basis and was Fairly Debatable

EMAC, L.L.C. filed an action for declaratory judgment, damages and attorney’s fees against the County of Hanover and the Board of Supervisors of the County of Hanover. EMAC alleged impermissible discrimination in the Board’s denial of an extension of a conditional use permit (CUP) allowing placement of signs to advertise mall that had not yet been developed. The County and the Board (collectively “defendants”) filed a demurrer and motion to dismiss, the circuit court granted the defendants’ demurrer and motion to dismiss, and EMAC appealed.

EMAC first argued that the circuit court erred when it sustained the demurrer and motion to dismiss based upon the grounds that EMAC did not allege that the existing zoning ordinance was unreasonable without a CUP permitting a destination commerce sign on its property. Here, EMAC’s amended complaint alleged that the Board discriminated against it by rejecting its application for an extension of CUP–2–12 for the southern sign while granting Northlake’s extension request of CUP–2–12 for the northern sign. The court noted that an impermissibly discriminatory decision is unreasonable regardless of whether the existing zoning ordinance is reasonable as applied to an applicant’s land. Therefore, if a landowner alleges that a zoning decision impermissibly discriminated against it, it has implicitly alleged that the decision was unreasonable. Accordingly, the court erred in finding that EMAC was required to allege that the existing zoning ordinance was unreasonable as applied to its land in order to state a cause of action, and in granting defendants’ demurrer and motion to dismiss on that basis.

As an alternative basis for its decision to grant defendants’ demurrer, the circuit court stated that the amended complaint and exhibits demonstrated that the decision to deny EMAC’s extension request was supported by a rational basis and was fairly debatable. The court found that when viewed in the light most favorable to the plaintiff, Northlake and EMAC were not similarly situated parties. While Northlake, the owner of the land designated for the northern sign, was listed as an applicant on the application for CUP–2–12 and it gave County representatives permission to enter its land to inspect upon request, neither EMAC, the owner of the land designated for the southern sign at the time of the application for CUP–2–12, nor its attorney-in-fact or tenant was an applicant, and EMAC gave no such permission. Thus, Northlake was seeking an extension for a valid portion of CUP–2–12, while EMAC was seeking an extension for a void ab initio portion of CUP–2–12. Additionally, Northlake had an agreement with the outlet mall developer concerning the operation of the northern sign on its property, and there was no controversy concerning whether extension of that CUP is consistent with the public interest of developing the outlet mall and constructing the sign.

For these reasons, the court found that is was rational, fairly debatable and consistent with the public interest to allow the CUP for the sign on EMAC’s property to lapse so that the Board could evaluate the appropriate placement of the southern sign consistent with the public interest. It therefore affirmed the circuit court’s holding.

EMAC, LLC v County of Hanover, 2016 WL 164132 (VA 1/14/2016)


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