Billboards, Vested Rights and Screwy Ordinance Interpretations

             The N.C. Supreme Court recently decided a land use case (not a common occurrence) with facts that are, actually, fun to describe.  Let’s review the facts and the holding, and stay tuned for some color(ful) commentary from Morris Communications d/b/a Fairway Outdoor Advertising v. City of Bessemer City Board of Adjustment.

 The Facts

             This is another billboard case.  If you’re a veteran of land use issues you’re probably thinking that the case, ipso facto, will be about vested rights.  And it is, but it has a few twists. (I’ve never done the math, but if a case involves billboards, it’s almost always about vested rights).

             Fairway Outdoor Advertising legally erected a sign in Bessemer City in 2000. It was on land owned by Ralph Dixon and next to the highway right of way.  Five years later, NC DOT decided to widen the road, requiring the sign to be moved to accommodate the government’s project, and requiring Mr. Dixon to make changes with his own land (it was used for a NAPA auto parts store).

             Fairway applied for and received a new sign permit and a building permit.  Both permits required “work” to commence within 6 months or the permits expired.

             So . . . Fairway got to “work.” How? It began condemnation negotiations with NC DOT.  It negotiated a new lease with Mr. Dixon.  It had numerous communications with NC DOT about its negotiations with Mr. Dixon.  Although the opinion doesn’t say it, I’m sure a surveyor was engaged to survey the leasehold area.  Someone would have had to create construction plans. 

             On June 8th, Fairway received a renewal on its building permit, and on June 12, the Bessemer City zoning ordinance was changed to ban most outdoor advertising (i.e. billboards).  The change in the law, of course, immediately raised the question of who was protected under the prior law because their rights had vested.

             Cooperating with NC DOT, Fairway removed its sign the day after the new sign ban ordinance was passed, but even then DOT had not figured out where the right-of-way would be located, and Mr. Dixon still had not determined how the building on his site would be reconfigured to accommodate DOT’s widening.

             Eventually, all the parties whose actions and decisions were beyond Fairway’s control got their act together.  On December 4th and 5th the county inspected the footings and the next day the sign went up. And five weeks later Bessemer City sent Fairway a Notice of Violation saying the sign was not allowed under the new law, its permit was no longer valid, and it had 30 days to remove its expensive asset that was only taken down in the first place because the state has the power to make it do that when it expands a road.

 The Appeal

             Fairway appealed the NOV to the Board of Adjustment and lost.  It appealed the BOA’s decision to the superior court and lost.  It appealed the superior court’s decision to the Court of Appeals and lost.  But this time there was a glimmer of hope.  Judge Robert N. Hunter from Greensboro (as opposed to the Judge Robert C. Hunter, from Marion) was on the three judge panel.

             Judge Hunter (from Greensboro) has become a consistent protector of property rights and a judge with limited patience for abuses of governmental authority (as demonstrated in the recent Amward Homes case out of Cary).

             Judge Hunter dissented, giving Fairway an automatic right of appeal to the N.C. Supreme Court. 

             [Procedural note: the NC Supreme Court is not an open forum for any dissatisfied party.  There are specific ways you can reach the N.C. Supreme Court to present a case. If your Court of Appeals panel is divided, your appeal right is automatic.  If your panel is unanimous, you have to seek the Supreme Court’s permission to review it, and then they usually tell the petitioner no, except under certain specific situations, such as case of compelling public interest, etc.]

 The Decision

             The first aspect of the Court’s decision pertained to the deference given to local interpretations of local ordinances.  The Court of Appeals held that the BOA’s decision was “entitled to deference under de novo review.”  The Supreme Court caught this nuance and corrected it.

             A reviewing court may consider a local government’s interpretation of its ordinances, but under de novo review there is no entitlement to deference.  A reviewing court is free to substitute its decision for that of the BOA.

             [Real World Insight: As a practical matter, somewhere between 99% and 99.5% of all boards of adjustment uphold the ordinance interpretations of their planning staff.  De novo review pertains to errors of law, not fact.  Therefore it is important that a judge’s hands not be bound when he or she applies the law.]

             But here’s where it gets fun.

             The Bessemer City ordinance provides: “If the work described in any compliance or sign permit has not begun within six months from the date of issuance thereof, the permit shall expire.  Upon beginning a project, work must be diligently continued until completion with some progress being apparent every three months.”

             The zoning administrator interpreted the ordinance to mean that, even in this information-based economy, only the man on the bulldozer or trackhoe is capable of doing what we call “work.”

             Fairway argued that the term “work” had a broader meaning, and the court agreed, citing the long-held principle that in land use – like baseball – the tie is always to the runner. (Actually, there is no such rule in baseball with that description. It’s more of a colloquial expression)

             Well, it didn’t actually say it that way, but that’s what the court meant.  What it actually said was 1) when there is a reasonable doubt, “governmental restrictions on the use of land are construed strictly in favor of the free use of property,” and 2) “Zoning ordinances are in derogation of the right of private property, and where exemptions appear in favor of the of property owner, they should be liberally construed.”

             In other words, if a zoning ordinance term is not abundantly clear, the private citizen who presents an alternate and reasonable interpretation prevails.

             But the decision has an “edgy” tone that, to me, betrays judicial impatience with the zoning administrator’s interpretation.

             The zoning administrator insisted that the sign be treated as a “new” sign, even though he was fully aware that Fairway was forced to relocate the sign by NCDOT and that there were several matters to be worked out before it could be moved. 

             Then the court says this:

             “The record raises an inference that the Bessemer City zoning administrator took advantage of the ambiguity in the sign ordinance and the uncertainty and complexity of the road widening project to hasten the city’s prospective ban on outdoor advertising. . . . He also revealed that . . . he had a ‘general disagreement with billboards.’”

             [Practitioner’s note: the only way the court had this information in the first place is because a good lawyer engaged in pointed cross-examination of the zoning administrator. Portions of the cross-examination are repeated in the opinion verbatim, and they illuminate both the problems with the initial decision and the court’s reaction]

             It is more than significant that the court noted that a fundamental reason Boards of Adjustment exist is to “correct errors or abuse.”

 Color(ful) Commentary

             [Writer’s note:  Last week I participated in a hearing in Rowan County over a conditional use permit for a 1200 foot broadcast tower that lasted, in total, for almost 20 hours. Planning director Ed Muire told me before the hearing that he reads this blog and appreciates my color commentary and insider’s view of the world of development and the legal system.  On cross-examination, Ed was unbiased and factual, and he, like so many planners who serve the public, had to stay until past midnight the first night and past 10:00 p.m. the second night.  So Ed, this color commentary is for you]

             I truly believe that all lawyers – like all people generally – prepare carefully for what they should and will say in a formal hearing, all the while having their own private, fantasy-world conversation running in the background – like music in an elevator – that expresses what they really wish they could say or had said. 

             My fantasy presentation before the Bessemer City Board of Adjustment would have run something like this:

             “Dudes.  Where in the ordinance is there anything about “work” having to be visible “on the ground?”  It ain’t there!  The most you have is the description that work must be “apparent,” and the record clearly reflects what was obvious and apparent – that Fairway was actively engaged in all sorts of activity to get the sign back up while waiting for NCDOT and the landowner to make their [darn] decisions.

             “Do you truly think the folks at Fairway were not working when they were negotiating with Mr. Dixon and NC DOT???  If the company had not paid them wages for that work they could have sued under more than one employment statute.  The Department of Labor certainly considered it work.

             “If the employees handling the negotiations didn’t pay state and federal taxes on income from their “work” negotiating with Mr. Dixon and NCDOT they could ultimately go to jail.  The IRS and NC Department of Revenue certainly considered them to be earning wages for work.

             “Think you could convince the sign engineer’s and the surveyor’s licensure boards that they weren’t working when they designed the sign and the lease area where it would be placed??

             “And how many of you came home from work today able to point to one visible thing you did other than emails on a screen and words in airspace from phone calls?

             You get the picture.  The local interpretation was, as the court said, “unduly restrictive” and, as the court implied, the result of an improper personal bias.

             And to Mr. Muire, who might be wondering, my fantasy presentation before the Rowan County Board of Commissioners was the one I gave and the one you heard. I’m just sorry that it wasn’t colorful like the one I just “did.”

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Comments
7 Responses to “Billboards, Vested Rights and Screwy Ordinance Interpretations”
  1. Chris Murphy says:

    Tom – if the permit was renewed on June 8th and the footings were inspected on Dec 4th and 5th and the sign went up on the 6th, why was there any question about the validity of the permit? Obviously real “tractor” work had taken place during the 6 months (since the sign was actually erected within the 6 month timeframe from the June 8th renewal) – also, under the building code, once a permit has receieved an inspection, isn’t it good for a year, so long as work continues?

    • Tom Terrell says:

      Great question. The facts in a case history are always summarized, so you and I likely have only seen the tip of the iceberg. However, I think the answer is that it was the building permit that had been renewed, not the sign permit. I read the case as saying that the planning staff relied on the expired sign permit as the basis for finding the building permit did not save the sign.

  2. Allen says:

    Tom, I personally think court (and apparently Bessemer City’s attorney) missed the boat on the work issue. Certainly work had begun, just not the work described in the permit. The permit was for construction of a sign, not for negotiating the placement of a sign, contracting for design or installation of a sign, or all the other work for which no permit is required. Developers routinely perform significant work prior to even applying for a permit, including seeking other approvals from local governments like subdivision or site plan approval, but that work does not qualify as work authorized under the permit, and not just because it was performed prior to application for a permit. By the court’s logic, every permit would be valid for eternity as long as the applicant called someone about it once within the first six months.

    • Tom Terrell says:

      Thanks, Allen. My position would be 1) that “work described” includes “work implied” (all of the work leading up to and being a necessary precondition to the work described) 2) Since there were no other permits other than building permit and sign permit, one of them would have to be found to include the preliminary work, and 3) Fairway is a “citizen” whose property was being taken away by the state with absolute power to do so, and the court was not going to allow a local zoning adminstrator to take advantage of that power imbalance to effect something that lay somewhere between a personal opinion and a vendetta against billboards conceptually.

      • Allen says:

        But wouldn’t “work implied” include filling out a permit application? It seems to me that the 6 month expiration is essentially invalid in all situations. I agree that there were extenuating circumstances with the right-of-way acquisition, but I think the court went way too far in applying this across the board.

        • Tom Terrell says:

          I’d have to read the entire case file for a full picture of the facts. Some questions are hard to answer based just on the abbreviated fact summaries in the case itself.

  3. Dan O'Shea says:

    Tom,
    Thanks for your refreshingly simple and colorful summation of an all to fimiliar scenario.
    It is unfortunate that “some administrators” seem to disregard fundamental property rights as a means to an end.
    Your wisdom and wit are most appreciated.

    Dan

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