WILLIAM H. THOMPSON, JR., )
and COUNTRY MAID FARMS, )
INCORPORATED, a Tennessee
Corporation,
)
) FILED
)
Plaintiffs/Appellants, ) Appeal No. September 1, 1999
) 01-A-01-9808-CH-00438
Cecil Crowson, Jr.
v. )
Appellate Court Clerk
) Davidson Chancery
DEPARTMENT OF CODES ) No. 98-71-II
ADMINISTRATION, )
METROPOLITAN GOVERNMENT )
OF NASHVILLE and DAVIDSON )
COUNTY, )
)
Defendant/Appellee. )
COURT OF APPEALS OF TENNESSEE
APPEAL FROM THE CHANCERY COURT FOR DAVIDSON COUNTY
AT NASHVILLE, TENNESSEE
THE HONORABLE CAROL L. McCOY, CHANCELLOR
DAVID O. HUFF
Washington Square, Suite 204
214 Second Avenue, North
Nashville, Tennessee 37201
ATTORNEY FOR PLAINTIFFS/APPELLANTS
THOMAS G. CROSS
Metropolitan Attorney
204 Metropolitan Courthouse
Nashville, Tennessee 37201
ATTORNEY FOR DEFENDANT/APPELLEE
AFFIRMED AND REMANDED
WILLIAM B. CAIN, JUDGE
OPINION
This case involves the refusal of the Metropolitan Department of Codes
Administration ("the Department") to issue building permits to the
petitioner/appellant landowner. Planning to divide and sell his land, the
petitioner made preparations to subdivide this land pursuant to the Department's
advice on how to avoid regulation by the Metropolitan Planning Commission
("MPC"). However, due to a new interpretation of existing statutory law, the
petitioner's preparations, once completed, were no longer adequate and the
Department deemed that the land must undergo review before the MPC as a
subdivision. Consequently, the zoning administrator of the Department denied
the petitioner the building permits and the petitioner brought suit claiming first
that the division of land was not a "subdivision" as that term is defined by
statute. Furthermore, the petitioner contended that the zoning administrator's
application of the newly-interpreted law to him violated his constitutional rights
to equal protection and due process and effected against him the application of
a retrospective law. In addition, the appellant claimed that the Department
should be equitably estopped from refusing to issue the building permits. The
trial court granted the Department's motion for involuntary dismissal of the
petitioner's case. We affirm the decision of the trial court on all issues.
I.
Petitioner William Thompson is the sole owner of Petitioner Country
Maid Farms which consists of two tracts of land in north Davidson County. He
has utilized this land over the years as a dairy farm. In 1995, Mr. Thompson
decided to develop this land into residential lots for the purpose of selling them.
Mr. Thompson initially met with John Bracey of the MPC who told him
that if the lots were more than five acres, the MPC would not interfere. On
December 14, 1995, Mr. Thompson and his friend Dan Barge, an engineer, met
with Sonny West, the zoning administrator for the Department, to discuss the
2
division of this property. Mr. West advised the petitioner that if each lot had
five or more acres of land, fifty feet of public road frontage per lot, and no water
or utility extensions, the petitioner would receive building permits. In other
words, if these criteria were met, Mr. Thompson would not have to obtain the
MPC's approval to subdivide his property. On four occasions in 1996, Mr. West
confirmed his advice, three times over the phone and once in person.
Mr. West's testimony was in accord with Mr. Thompson's regarding the
advice given Mr. Thompson at the December 14, 1995 meeting and thereafter.
He clarified that he told Mr. Thompson what would be required to remain
outside of MPC jurisdiction. Mr. West testified that his office had taken this
same legal position with everyone who inquired up until the time that the law
was clarified by an informal opinion, issued on March 28, 1997 by the Metro
Legal Department. He stated that since his office became aware of the new
interpretation of the law by the informal opinion, it had not issued any permits
to people who were not in compliance with the law as re-interpreted by this
informal opinion.
It is not disputed that after receiving the initial advice from Mr. West, Mr.
Thompson began the process of preparing his land for development which
lasted for the next 18 months. He prepared a declaration of restrictive covenants
and maintenance agreement, an access easement and a declaration of sanitary
sewer and sewer service easement and had each recorded at the Register's office.
He obtained legal street and postal addresses for the lots. He purchased water
taps for the lots. He had a road constructed. He contracted with NES to install
telephone poles. In addition, Mr. Thompson made physical improvements to the
land. Mr. Thompson testified that as of December 31, 1997, he had spent about
$88,795 on developing this property.
After completion of this process in November of 1997, Mr. Thompson
took the recorded deeds to Mr. West to obtain the building permits at which time
Mr. West advised him that the Department could no longer issue the permits.
As stated, the Department's change of position was the result of an informal
memorandum opinion issued on March 28, 1997 by a staff member of Metro's
3
Department of Law. In this opinion, the legal department opined that prior
zoning administration practice was not consistent with the law. In pertinent
part, the informal opinion concluded that the division of land into lots,
regardless of size, does constitute a subdivision pursuant to Tennessee Code
Annotated sections 13-3-401(4)(B) and 13-4-301(4)(B) if any new utility
extensions (e.g., water, sewer, electric power, or cable) or new road construction
is necessary. Hence, subdivision regulations would not apply if each planned
lot has the required frontage along and direct driveway access to an existing
public street and will obtain utilities only through individual service lines
connecting directly to existing mains. However, where proposed divisions of
land show access from new lots to a public street through a new road or common
easement or new utility lines serving more than one lot, the statute mandates
subdivision review.
Mr. Thompson testified that he would never have begun development of
his property had he been advised initially that it would be necessary to comply
with subdivision regulations as this would not have been a profitable venture.
Mr. Thompson had spent approximately $89,000 on the property at the time of
trial. He testified that, in the wake of the new interpretation, the improvements
will not have enhanced the value of the property unless he completes the
development process. He estimated that it would take another $200,000 to bring
the land into subdivision compliance according to the original plan. Mr.
Thompson testified that he can not even graze cattle on the property in its
present state as he had been able to before making the changes.
Walter Davidson, the engineer who calculated the cost estimates of
preparing Mr. Thompson's property in different ways, testified that it would
have cost Mr. Thompson approximately $300,000 more to develop a public road
meeting the standards in the subdivision regulations rather than the private road
that was already developed. He testified in detail as to the reasons for this
increased cost. He agreed that a public road was more durable and safe. It was
Mr. Davidson's opinion that in order to comply with subdivision regulations,
Mr. Thompson would have to spend $2000 or $3000 more per lot and only get
$1000 more for the purchase price of each lot.
4
Mr. Thompson testified that after he was denied the building permits by
Mr. West, he appealed to the Board of Zoning Appeals and sent a letter to
Terrance Cobb of the Metropolitan Codes Department. Mr. Cobb responded by
calling Mr. Thompson at home and explaining that he would look into the
matter; however, he later told Mr. Thompson that he could not help him. There
was never a hearing held before the Board of Zoning Appeals and the record
before us today was formed in the chancery court.
Mr. Thompson filed a "Petition for Writ of Certiorari, and for Mandamus,
and for Declaratory Judgment" in the Davidson County Chancery court. In this
petition, he claimed that the Department's refusal to issue him the building
permits is illegal, arbitrary and capricious in that the change in the Department's
long-standing policy and practice came after the approval of Mr. West and with
no prior notice to Mr. Thompson. This, Mr. Thompson argued, constitutes a
violation of his constitutional rights, specifically the rights of equal protection
and due process as guaranteed by both the state and federal constitutions. In
addition, Mr. Thompson asserted that the Department's refusal to issue the
permits constitutes, in practice and application, a retrospective law violative of
Article 1, Section 20 of the Tennessee Constitution. Finally, Mr. Thompson's
petition asserted that he had relied on the prior approval of the Department to
his detriment.
After the petitioners presented their case in chief, the trial court dismissed
the action pursuant to Tenn. R. Civ. P. 41.02(2). From the bench, the court
stated its reasoning as follows: "regardless of the Department's practice, the
law is and has been that those in [the petitioners'] position must comply with the
statutory requirements for a subdivision." The court found that cases cited by
the petitioners to support the equitable estoppel argument were distinguishable.
The court then taxed the costs against the petitioners.
II.
As a preliminary matter, we must determine what type of proceeding Mr.
5
Thompson brought below. Mr. Thompson went to the correct person in the
Department of Codes Administration for the issuance of building permits which
was Sonny West, the zoning administrator. After being denied the permits, he
protested the denial to Terrance Cobb in the same department who ultimately
told him that Sonny West was the final authority. When asked if he appealed
Mr. West's decision, Mr. Thompson testified that he did appeal to the Board of
Zoning Appeals. However, from the record, it is evident that the Board of
Zoning Appeals never heard the case. Apparently, this lawsuit in the chancery
court was filed simultaneously with the appeal to the Board. A writ of certiorari
did issue from the chancery court to Mr. Cobb which ordered him "to make,
certify and transmit to this Court the entire record of the proceedings before the
Department of Codes relative to its decision to deny petitioners herein the
building permits requested as more fully set out in the Petition for Writ of
Certiorari." However, there is nothing in the record from any proceeding in the
Department of Codes nor any indication that any proceeding took place which
would have been the basis for such a record.
Mr. Thompson's complaint was in the form of a petition for writ of
certiorari, for writ of mandamus and for declaratory proceeding. In this petition,
he sought a writ of certiorari, a declaration that the Department's refusal to issue
the building permits was arbitrary and capricious, an order directing Mr. West
to issue the building permits, and a declaration that the Department's
interpretation of the ordinance was an unenforceable retrospective law. Without
reference to the type of proceeding or the attendant standard of review, the trial
court dismissed the case after hearing the petitioners' proof.
The distinction between the alternative procedures available for the
judicial review of actions taken by either county or municipal authorities is best
summarized by the following excerpt from Tennessee Jurisprudence:
§ 4. Actions. -- Generally. -- An action for declaratory judgement,
rather than a petition for certiorari, is the proper remedy to be
employed by one who seeks to invalidate an ordinance, resolution
or other legislative action of a county, city or other municipal
legislative authority enacting or amending zoning legislation. . . .
6
The remedy of certiorari will continue to be the proper remedy for
one who seeks to overturn a determination of a board of zoning
appeals. This distinction in remedies is made because the
determinations made by a board of zoning appeals are
administrative determinations, judicial or quasi-judicial in nature,
and are accompanied by a record of the evidence produced and the
proceedings had in a particular case, whereas the enactment of
ordinances or resolutions, creating or amending zoning regulations,
is a legislative, rather than an administrative action and is not
ordinarily accompanied by a record of evidence, as in the case of
an administrative hearing.
26 Tennessee Jurisprudence Zoning § 4, p. 232 (1993); see also Hoover, Inc. v.
Metropolitan Bd. of Zoning Appeals, 955 S.W.2d 52, 54 (Tenn. App. 1997)
("The vehicle for reviewing decisions of local boards of zoning appeals is the
common-law writ of certiorari.").
Thus, administrative determinations, judicial and quasi-judicial in nature,
which are accompanied by a record of the evidence produced and the
proceedings had are properly reviewed by a writ of certiorari. Fallin v. Knox
County Bd. of Com'rs, 656 S.W.2d 338, 342 (Tenn. 1983) (determining that an
action for declaratory judgment was proper where plaintiff sought to invalidate
a resolution of the county board of commissioners purporting to amend a zoning
ordinance). It is well established that the decision to or not to grant a building
permit is an administrative determination. Harrell v. Hamblen County
Quarterly Court, 526 S.W.2d 505, 509 (Tenn. App. 1975) ("The issuing of
permits has often been held to be an administrative or ministerial act and the
person charged with the duty of issuing permits must follow literally the
provisions of the ordinance.") In another case, our supreme court quoted a well-
known treatise as follows:
Municipal legislative bodies may reserve to themselves, where they
do so by an ordinance containing a rule or standard to govern them,
the power to grant or deny licenses or permits. This may be done
in zoning matters, where it is not contrary to a state zoning or
enabling act, and where the zoning ordinance likewise contains
sufficient standards to govern the municipal council. Thus, a
zoning ordinance vesting in the municipal council the power to
determine whether a building permit should be granted ... is
regarded as administrative, rather than legislative in character.
McCallen v. City of Memphis, 786 S.W.2d 633, 639 (Tenn. 1990) (quoting 8A
7
E. McQuillin, The Law of Municipal Corporations, § 25.217 at 160-61(3d ed.
1986)).
In the instant case, the nature of the decision below, the denial of a
building permit, indicates that the appropriate means of review is the common
law writ of certiorari. However, the decision was not appealed to the Board of
Zoning Appeals1 and did not come up to the chancery court accompanied by a
record. Since Mr. Thompson failed to exhaust his administrative remedies by
appealing the decision of the zoning administrator to the Board of Zoning
Appeals, he can not now file a petition for a writ of certiorari. See Robison v.
Metropolitan Government, No. 01-A-01-9105-CH-00178, 1992 WL 205268
(Tenn. App. 1992).
In light of the fact that Mr. Thompson abandoned his appeal to the Board
of Zoning Appeals thereby precluding review by certiorari, the appropriate
avenue by which this matter can be resolved is a declaratory judgement pursuant
to section 29-14-103 of the Tennessee Code. Mr. Thompson's petition in the
chancery court included a request that the court issue a declaratory judgment
declaring "the refusal to issue building permits as illegal, arbitrary and
capricious, it being in totally contrary of long-standing Department policy and
practice and in violation of petitioners' constitutional rights of equal protection
and due process of laws." As we have established, a declaratory judgment is not
the proper means for reviewing a zoning administrator's decision for
arbitrariness or capriciousness. However, the constitutionality of law can be
determined by a declaratory action. See Industrial Dev't Bd. v. First U.S. Corp.,
407 S.W.2d 457, 219 Tenn. 156 (1966). In addition, there is authority for this
court to issue a declaratory judgment on the issue of whether the division and
1
Mr. Thompson certainly had the right to such an appeal. Section 17.40.180 of the
Zoning Regulations of the Metropolitan Government of Nashville address the powers of the
Board of Zoning Appeals and provides as follows:
A. Administrative Appeals. Pursuant to Section 13-7-207(1), Tennessee Code
Annotated, the board shall hear and decide appeals from any order, requirement,
decision or determination made by the zoning administrator or the urban
forester in carrying out the enforcement of this zoning code, whereby it is
alleged in writing that the zoning administrator or the urban forester is in error
or acted arbitrarily.
See also Robison, 1992 WL 205268 at *5.
8
sale of certain property constitutes a subdivision under the Tennessee Code. See
Loftin v. Langsdon, 813 S.W.2d 475 (Tenn. App. 1991).
III.
As a declaratory action, the first issue is whether the division of Mr.
Thompson's property does indeed fall within the definition of a subdivision such
that local subdivision review is mandatory. Section 13-4-301(4)(B)2 of the
Tennessee Code provides that "'[s]ubdivision' means . . . the division of a tract
or parcel of land into two (2) or more lots, sites, or other divisions requiring new
street or utility construction . . . for the purpose, whether immediate or future,
of sale or building development, and includes resubdivision and when
appropriate to the context, relates to the process of resubdividing or to the land
or area subdivided." The informal opinion from the office of the Metro Legal
Department specifically addressed a particular division of land known as a "flag
development" where each lot has driveway access to a public road but only
through a shared easement which is common to all of the lot owners. The
informal opinion's conclusion was that "[t]he division of land into tracts of five
acres or greater where access to public streets and public utilities will be
provided along a newly constructed or improved private or shared drive or
easement falls within the definition of a 'subdivision'" as quoted above from
section 13-4-301(4)(B).
At oral argument, Mr. Thompson's attorney conceded that the informal
opinion was correct. He contends however that the proposed division of his
property does not fall within the definition of "subdivision" as clarified in that
opinion. We disagree. In focusing in his argument on the fact that the division
of his property did not require new public water or sewer utility construction,
2
Section 13-3-401(4)(B) provides the exact definition of subdivision in the context of
regional planning. Section 11.504 of the Charter of the Metropolitan Government of Nashville
and Davidson County grants to the MPC all the powers, duties and responsibilities granted to
both municipal and regional planning commissions under the state zoning and planning
enabling statute. It is clear that Mr. Thompson's property, which was in Davidson County was
within the jurisdiction of the MPC. See Subdivision Regs of the metro Planning Comm'n 1-3
(1997). Thus, the issues in this case involve the definition of subdivision and other pertinent
statutes found under the municipal regulations in part 3 of Title 13 of Tennessee Code
Annotated.
9
Mr. Thompson misses the point of the informal opinion. For purposes of Mr.
Thompson's proposed division of land, the relevant part of the informal opinion
modified the prior interpretation of the statute as to the question of what
constitutes a "new street," not what constitutes "new utility construction." That
opinion determined that the construction of a private driveway/street which
served as a common easement in a "flag development" qualified as a "new
street" for purposes of the subdivision definition. There is no dispute that the
development proposed by Mr. Thompson is a flag development with a private
driveway/street easement through which all lots are reached. Therefore, we can
only conclude that this proposed division amounts to a subdivision as defined
by the Tennessee Code.
Mr. Thompson's second contention is that even if a proposed division
comes within section 13-4-301(4)(B)'s definition, it does not necessarily follow
that the local subdivision regulations apply. He argues that the state statute is
an enabling statute which permits the local governing body, the MPC, to create
the subdivision regulations it deems necessary, and the MPC has the prerogative
to not require that certain divisions of land be burdened with the local
subdivision regulations. Mr. Thompson insists that the definition of
"subdivision" in the MPC's subdivision regulations is more narrow than that in
the code and does not encompass his proposed division.
We cannot agree with Mr. Thompson's assessment of the law. Tennessee
law assigns full responsibility for the process of subdivision regulation,
development, application and administration to regional and municipal planning
commissions. Tenn. Code Ann. § 13-4-303 (1992). The law is clear that if the
statutory definition of "subdivision" applies to a division of land, then approval
of the MPC is necessary before a subdivision plan can be recorded. The code
provides as follows:
(a) From and after the time when the planning commission of any
municipality shall have adopted a master plan which includes at
least a major street plan, or shall have progressed in its master
planning to the stage of the making and adoption of a major street
plan, and shall have filed a certified copy of such major street plan
in the office of the county register of the county in which the
municipality is located, no plat of a subdivision of land lying
10
within the municipality shall be filed or recorded until it shall
have been submitted to and approved by the planning
commission and such approval entered in writing on the plat
by the secretary of the commission.
Tenn. Code Ann. § 13-4-302 (1992); see also § 13-3-402 (articulating a similar
prohibition for county registers with respect to recording subdivision plats for
purposes of regional planning). Subdivision, as used in this statute, is defined
by section 13-4-301(4)(B).
This court's opinion in Loftin v. Langsdon supports our conclusion that
divisions of land which fall within the code's definition of "subdivision" must
be submitted to the MPC for approval. 813 S.W.2d 475 (Tenn. App. 1991).
There, a landowner petitioner made major improvements to his land in
preparation for the division and sale of lots. Id. at 476. The local director of
community development noticed the lots for sale in the newspaper and contacted
the landowner to advise him that he could not proceed without approval from
the planning commission. Id. The landowner then commenced an action in the
chancery court asking that court for a declaratory judgment that the division of
his property did not constitute a subdivision under section 13-3-401(4)(B) and
thus did not come under regulation by the planning commission. Id. at 477.
Looking to rules of statutory interpretation, the court found that the landowner's
actions relating to the road and utility improvements on the land placed him
within the subdivision statute. Id. at 479-80. The issue in Loftin hinged upon
what it meant for new street or utility construction to be "required." However,
implicit in the court's reasoning was that once it was found that new street or
utility construction was "required" thus placing a division within the ambit of
section 13-3-401(4)(B), that division would come under regulation by the MPC.
IV.
We next address the constitutionality of applying the law, as newly
interpreted by the informal opinion, to the division of Mr. Thompson's property.
Mr. Thompson argues in effect that the enforcement of this law against him
violates his rights to equal protection, due process and freedom from
11
retrospective laws. We disagree, finding that none of Mr. Thompson's
constitutional rights have been compromised by applying the law to him.
Turning first to the equal protection challenge, we find that Mr.
Thompson has failed to show that he has been treated differently from those
persons similarly situated. See Evans v. Steelman, 970 S.W.2d 431, 435 (Tenn.
1998) (citing Tennessee Small School Sys. v. McWherter, 851 S.W.2d 139, 153
(Tenn.1993) ("The concept of equal protection guarantees that persons similarly
situated shall be treated alike."). In fact, the testimony at trial was to the effect
that, prior to the issuance of the informal opinion, others seeking building
permits under facts akin to those of this case were not required to submit to
subdivision review. Significantly, after the informal opinion was issued, anyone
seeking a permit in the same situation has been required to undergo subdivision
review. Mr. West's uncontroverted testimony was that certain developers had
been required to subject their divisions of property to subdivision review in the
midst of development, after construction was well under way. He testified of
one instance where, while the department did not retract the building permits
which already had been issued, it refused to issue any more until the
development went before the MPC for review which resulted in the developer
being made to rebuild a road.
Likewise, Mr. Thompson has not shown that he has been deprived of
constitutional due process. Mr. Thompson's claim is apparently a substantive
rather than a procedural due process claim: he does not contend that the
department could not deny the building permits without first according him fair
notice and hearing. Rather, Mr. Thompson maintains that he could not
constitutionally be denied the permits at all. He thus asserts that he obtained a
categorical substantive due process right to building permits once he had sought
and followed the advice of the department to secure such permits. See Haskins
v. City of Chattanooga, 877 S.W.2d 267, 269 (Tenn. App. 1993) (citing Charles
v. Baesler, 910 F.2d 1349, 1352-53 (6th Cir.1990)). We disagree with Mr.
Thompson's substantive due process challenge.
12
"Substantive due process 'affords only those protections "so rooted in the
traditions and conscience of our people as to be ranked fundamental." ' "
Haskins, 877 S.W.2d at 269 (citing Charles, 910 F.2d at 1352-53); see Michael
H. v. Gerald D., 491 U.S. 110, 109 S.Ct. 2333, 2341-42, 2345, 105 L.Ed.2d 91
(1989). The threshold question for a substantive due process claim is whether
the claimant has a property interest entitled to constitutional protection. In order
for a right to be entitled to constitutional protection, it must be more than a
unilateral expectation or an abstract need or desire. The property interest must
be created by an independent source, and the person claiming the right must
demonstrate a legitimate claim of entitlement to it. See Board of Regents v.
Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 2709, 33 L.E.2d 548 (1972). In the
instant case, Mr. Thompson does not have a property interest in the zoning
administrator's erroneous interpretation of state law. Such a right could not be
derived from an independent source because state law - the very independent
source involved - requires him to obtain approval of his subdivision.
If a fundamental right is not involved, "the test for determining whether
a statute comports with substantive due process is whether the legislation bears
'a reasonable relation to a proper legislative purpose' and is 'neither arbitrary nor
discriminatory.'" Newton v. Cox, 878 S.W.2d 105, 111 (Tenn. 1994) (citing
Nebbia v. New York, 291 U.S. 502, 537, 54 S.Ct. 505, 516, 78 L.Ed. 940 (1934)
and National R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470
U.S. 451, 105 S.Ct. 1441, 84 L.Ed.2d 432 (1985)). To reiterate, the challenge
here is not to the reinterpretation of the statute in and of itself, but rather to its
application to Mr. Thompson. As noted in our discussion of Mr. Thompson's
equal protection issue, the application of this newly interpreted law to Mr.
Thompson's division of land was neither arbitrary nor discriminatory.
Moreover, the application of this law, as newly interpreted, bears a reasonable
relation to a proper legislative purpose in regulating subdivisions, the General
Assembly's desire to "provide for the harmonious development of the
municipality and its environs, for the coordination of streets within subdivisions
with other existing or planned streets or with the plan of the municipality or of
the region in which the municipality is located, for adequate open spaces for
traffic, recreation, light and air, and for a distribution of population and traffic
13
which will tend to create conditions favorable to health, safety, convenience and
prosperity." Tenn. Code Ann. § 13-4-303(a) (1992); see Loftin v. Langsdon, 813
S.W.2d 475, 479 (Tenn. App. 1991) (noting that "[t]he purpose of Planning
Commission regulations dealing with road construction is to insure that the
roads are built in a manner such as will protect the health, safety, and welfare of
the citizens. . . . [I]t is obvious that the intent of the legislature was that
roadways traveled by the general public be safe.").
Mr. Thompson's final constitutional argument involves the prohibition
against the imposition of a retrospective law in violation of Article 1, § 20 of the
Tennessee Constitution. This section provides "[t]hat no retrospective law, or
law impairing the obligations of contracts, shall be made." Article 1, § 20 does
not forbid every retroactive law. Rather, for purposes of this constitutional
provision, the term "retrospective laws" has been defined by the Tennessee
Supreme Court as those laws "which take away or impair vested rights acquired
under existing laws or create a new obligation, impose a new duty, or attach a
new disability in respect of transactions or considerations already passed."
Morris v. Gross, 572 S.W.2d 902, 907 (Tenn. 1978); see also Owens v.
Truckstops of Am., 915 S.W.2d 420, 427 (Tenn. 1996). Mr. Thompson argues
here that the Department's action imposes new duties and new obligations on
him which did not exist when Mr. West advised him that his project did not fall
within the regulatory domain of the MPC.
While it is true that compliance with the new interpretation of the statute
demands greater obligations on the part of Mr. Thompson, it does not do so in
the context of a transaction which has already passed. In other words, while Mr.
Thompson was advised of the previous law, he was not nor could not have been
guaranteed that this would be the law forever. Certainly before the permits were
granted and the buildings constructed, there was no transaction. Significantly,
along with any others who desire to divide and sell their land in the wake of the
new interpretation, Mr. Thompson can still do so as long as he brings his
division into compliance with the MPC's subdivision regulations.
V.
14
Lastly, we turn to Mr. Thompson's contention that principles of equitable
estoppel bar the MPC from applying the law, as newly interpreted, to his
proposed division of land. The courts are clear that "[p]ublic agencies are not
subject to equitable estoppel or estoppel in pais to the same extent as private
parties and very exceptional circumstances are required to invoke the doctrine
against the State and its governmental subdivisions." Bledsoe County v.
McReynolds, 703 S.W.2d 123, 124 (Tenn. 1985); Paduch v. City of Johnson
City, 896 S.W.2d 767, 772 (Tenn. 1995). After a review of the case law, the
court in Bledsoe County observed "that in those Tennessee cases where estoppel
was applied, or could have been applied, the public body took affirmative action
that clearly induced a private party to act to his or her detriment, as
distinguished from silence, non-action or acquiescence. " Bledsoe County, 703
S.W.2d at 125.
The supreme court's opinion in Paduch is instructive as to what action by
a public body amounts to "inducement." That opinion arose out of the defendant
city's refusal to issue to the plaintiff landowners building permits for the
construction of buildings on their land until they paved a portion of a road
accessing the property. Paduch, 896 S.W.2d at 768. After being given this
ultimatum, the landowners paved the road at their own expense and the city
issued the building permits. Id. However, the landowners brought suit seeking
in part to recover the money they had spent paving what they alleged was a
public street. Id. Despite the fact that the city wrongfully conditioned the
building permits upon the landowners paving the street, the supreme court found
that the landowners were not affirmatively induced to improve the public street.
Id. at 773. In other words, the city's action in telling the landowners that they
needed to pave the street to procure a building permit did not amount to
inducement.
This court has held that the type of inducement necessary to impose
estoppel on a governmental agency is that which leads to an implied contract
between a party and the governmental agency or causes the party to relinquish
a cause of action. Elizabethton Hous. and Dev. Agency, Inc. v. Price, 844
S.W.2d 614, 618 (Tenn. App. 1992). In Price, the defendant landlord defended
a suit initiated against her by the local public housing agency (PHA) for
15
recovery of funds which the PHA felt the landlord had wrongfully accepted
from the PHA. The PHA claimed that the landlord had accepted money from
the PHA after allegedly violating the PHA's rules. The landlord, on the other
hand, argued that a PHA employee had assured her that her actions were
permissible and within the rules. While the defendant landlord alleged an
affirmative act by an employee of the PHA, the court did not deem this the type
of "exceptional circumstances" wherein estoppel may be imposed on a
governmental agency. The court concluded as follows:
Estoppel is appropriate against government agencies only when the
agency induced the party to give up property or a right in exchange
for a promise. Thus, estoppel is appropriate when the facts clearly
evidence an implied contract, Gas-light Co. v. Memphis, 93 Tenn.
612, 30 S.W. 25 (1894); Trull v. City of Lobelville, 554 S.W.2d
638 (Tenn.App.1976); Brown v. City of Manchester, 722 S.W.2d
394, 397 (Tenn.App.1986), or when the government induces a
private party to relinquish a cause of action, State ex rel. Ammons
v. City of Knoxville, 33 Tenn.App. 622, 232 S.W.2d 564 (1950).
Price, 844 S.W.2d at 618.
The Department's action in this case does not amount to the type of
inducement that gives rise to estoppel. The Department told Mr. Thompson how
to comply with the law as it was then interpreted. It did not affirmatively induce
Mr. Thompson to make changes to his property. Furthermore, the Department's
action did not lead to an implied contract between Mr. Thompson nor did it
cause Mr. Thompson to relinquish a cause of action. Mr. Thompson still has the
ability to develop his land by complying with the law as it is currently
interpreted. We conclude that the facts in this case do not present the
exceptional circumstances required to invoke equitable estoppel against a public
agency.
VI.
The decision of the trial court is affirmed. We find that the division of
property proposed by Mr. Thompson does fall within the statutory definition of
subdivision found in section 13-4-301(4)(B) of the Tennessee Code. As a
subdivision, this division of land must undergo local subdivision review by the
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MPC. Finally, despite the fact that Mr. Thompson was advised pursuant to an
earlier interpretation of the law, we do not find that the application to Mr.
Thompson of this statute, as newly interpreted by the informal opinion of the
Metro Legal Department, in any way violates Mr. Thompson's constitutional
rights. Furthermore, we do not find that the doctrine of equitable estoppel can
be invoked to bar the Department from applying to Mr. Thompson the law as
clarified by the informal opinion.
________________________________
WILLIAM B. CAIN, JUDGE
CONCUR:
_________________________________
WILLIAM C. KOCH, JR., JUDGE
_________________________________
PATRICIA J. COTTRELL, JUDGE
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