Posted by: Patricia Salkin | July 7, 2018

KY Appeals Court Finds Property was Rezoned Subject to Restriction

This post was authored by Matthew Loeser, Esq.

Tom Harper, owner of a 97-acre tract of real property in Richmond, Kentucky applied to the Richmond Planning and Zoning Commission for a zoning map amendment to change the property from agricultural to R-4. The Planning Commission approved the application and recommended to the Richmond City Commission the property “be zoned R4, with the restriction that no part of the property shall be used for multifamily purposes.” Spangler then entered into a contract for the property, which was expressly contingent on the Planning Commission’s approval of the plan for a multifamily housing development. Spangler sought approval of its development plan and minor plat with the Planning Commission. The Planning Commission approved the development plan and minor plat, but David Rush, the Chairman of the Planning Commission, refused to execute either. Spangler then filed this action with the Madison Circuit Court, requesting the court to declare the property zoned R-4 without any land use restriction and order the Chairman to execute the development plan and minor plat. The Madison Circuit Court granting partial summary judgment to Spangler Apartments, LLC, and held the real property at issue was not subject to a land use restriction on multifamily development.

On appeal, the City argued there were three ways existence of the restriction could be found as a matter of law: through Ordinance 06-30, through operation of statutory law, or through nunc pro tunc Ordinance 15-20. The court found that Ordinance 06-30 did not explicitly provide for a restriction on the property, and the restriction would have to be implicitly attributed to the ordinance language. Similarly, the court found that Ordinance 15-20 could not, by itself, make the restriction effective because a nunc pro tunc order or ordinance “may be used to make the record speak the truth, but not to make it speak what it did not speak but ought to have spoken.” The court found, however, that the Planning Commission’s recommendation became effective as a matter of law after the passage of 90 days, and the subject property was rezoned R-4 with a restriction on multifamily development. Accordingly, the trial court erroneously found the property was not subject to the land use restriction.

Lastly, Spangler argued the City should be estopped from denying the property was zoned R-4 without restriction. While Spangler presented many facts to support the application of equitable estoppel, such as its due diligence in speaking to several individuals about Ordinance 06-30 and its expenditures in pursuing this development, the City presented facts in opposition, arguing Spangler had knowledge of a potential restriction in the ordinance and the City made no false representation. Accordingly, the court remanded both claims to the trial court for factual determination of whether equitable estoppel or “honest error” doctrine applied in this case.

City of Richmond v Spangler. 547 SW3d 556 (KY App. 4/6/2018)

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