Posted by: Patricia Salkin | August 28, 2016

Fed. Dist. Court of Kentucky Grants Dismissal of Due Process and Equal Protection Claims Against City for Failure to Remove Owner-Occupied Condition

Hills Developers, Inc. and its subsidiary, Anabasis, LLC (collectively, “the Developer”) owned an 11.586-acre tract of real property located in the Preston community, and part of the Plantation Pointe development in Florence, Kentucky. In 2007 and 2008, the Developer constructed two owner-occupied multi-unit condominium buildings on this land. In 2015, the Developer prepared to begin construction of other five buildings, which were supposed to be identical to the first two buildings in appearance; however, the Developer planned to retain ownership and rent the units in the next five buildings. When the City approved the zoning request for the entire Plantation Pointe development, it specifically requested that the prior owner of the property agree to an owner-occupied condition. The City therefore voted to deny the Developer’s request for removal of the owner-occupied condition, and Developer asserted claims of denial of equal protection, denial of substantive due process, and denial of procedural due process.

The City contended that the Developer’s due process and equal protection claims were barred by the applicable statute of limitations. Although the parties agreed that the applicable statute of limitations was one year, they could not agree on the date of accrual for the causes of action. The Developer argued that the cause of action did not accrue on the date of acquisition, but on September 8, 2015, the date that the City denied the re-zoning application. The court disagreed, and noted that the Developer knew of this restriction upon acquiring the property. The court found that even though the Complaint did not identify the precise date of purchase, it must have been sometime between the imposition of the owner-occupied condition in 1996 and the construction of the Developer’s first building in 2006. Accordingly, because the Developer did not file suit until October 6, 2015, the City concluded that the causes of action were time-barred under either scenario.

Lastly, the court granted the dismissal of Developer’s Equal Protection claim, since it failed to explain when or how the City treated it differently than other property owners within the same zoning classification.

Hills Developers, Inc. v. City of Florence, CV 15-175-DLB-CJS, 2016 WL 4443483 (E.D. Ky. Aug. 18, 2016)

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