Town & Country Foods, Inc. v. City of Bozeman

March 11 2009

DA 07-0448

IN THE SUPREME COURT OF THE STATE OF MONTANA

2009 MT 72

TOWN & COUNTRY FOODS, INC.,

Plaintiff and Appellant,

v.

CITY OF BOZEMAN,

Defendant and Appellee.

APPEAL FROM: District Court of the Eighteenth Judicial District,
In and For the County of Gallatin, Cause No. DV 05-522
Honorable Wm. Nels Swandal, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

Arthur V. Wittich and Margot E. Barg, Wittich Law Firm, Bozeman, Montana

For Appellee:

Philip F. Walsh, Walsh & McKenna, Bozeman, Montana

Submitted on Briefs: May 28, 2008

Decided: March 10, 2009

Filed:

__________________________________________
Clerk
Justice John Warner delivered the Opinion of the Court.

¶1 The Eighteenth Judicial District Court, Gallatin County, granted summary judgment

in favor of the City of Bozeman (the City), affirming the city commission’s denial of the

application for approval of a site plan proposed by Town and Country Foods, Inc. (T&C).

¶2 We restate the issues as follows:

¶3 Issue 1: Did the Bozeman city commission violate T&C’s constitutional rights to

substantive due process and equal protection of the law by denying its application for

approval of a site plan?

¶4 Issue 2: Was the Bozeman city commission’s decision to deny T&C’s application an

abuse of discretion?

BACKGROUND

¶5 T&C desires to build on land it owns in a district zoned B-1 according to the

Bozeman Unified Development Ordinance (UDO or Zoning Ordinance). The B-1 zone is a

“neighborhood business district” and the size of buildings in the B-1 zone is limited to 5,000

square feet. The intent of the B-1 zone is,

to provide for smaller scale retail and service activities frequently required by
neighborhood residents on a day to day basis, as well as residential
development as a secondary purpose, while still maintaining compatibility
with adjacent residential land uses. Development scale and pedestrian
orientation are important elements of this district.

Section 18.18.010(A), UDO.

¶6 In 2005, after the City rejected an initial proposal to build a 32,000 square foot store

on the subject property, and following several meetings with the planning director and his

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staff, T&C applied for approval of a new site plan. In its new plan, T&C proposed to build

six mini-stores, each serving a different purpose, e.g., a separate pharmacy, bakery, produce

market, etc. In an attempt to meet the B-1 size requirement, the plan proposed each mini-

store to be under 5,000 square feet in size. The planning director and his staff told T&C its

plans complied with the letter of the zoning regulations and that the office of the planning

director would recommend approval, but the city commission “may see it differently, and

that’s their prerogative, it’s their discretion to do so . . . .”

¶7 In May 2005 at a public meeting, the city commission voted unanimously to

“reclaim” T&C’s application, rather than leave the decision to the office of the planning

director. At this meeting, Jerry Perlinski, the owner of T&C, said he agreed the project

belonged with the commission rather than going through the regular channels in the

administrative review process.

¶8 Two months later, the city commission voted four to one to deny T&C’s application.

The record reflects that members of the commission verbally stated reasons for the denial at

a public meeting and also informed T&C of their reasons for the denial in a letter, the details

of which are discussed below. The record indicates that, although each of the mini-stores

proposed by T&C complied with the building size requirements of the B-1 zone, the city

commission decided the overall aggregate impact of the proposal did not harmonize with the

intent of the B-1 zone.

¶9 T&C commenced this action, claiming the city commission violated its constitutional

right to due process by arbitrarily and capriciously deciding to consider its application itself,

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rather than allowing the decision to be made by the planning director, and denying the site

plan approval application. T&C also alleged that the city commission violated its

constitutional right to equal protection of the law because it treated T&C differently from

other similarly situated applicants.

¶10 The City moved for summary judgment, asserting that because the Zoning Ordinance

gave the city commission broad discretion in granting applications for site plan approval,

T&C did not have a protected interest in its application, which prevented T&C from

establishing its substantive due process and equal protection of the law claims. The District

Court granted summary judgment in favor of the City, concluding that because the Zoning

Ordinance granted the city commission broad authority and significant discretion in

rendering its decision to approve or reject T&C’s site plan, T&C did not have a protected

property interest in having its application granted. The District Court concluded no material

facts were in dispute and the city commission followed proper procedure by stating its

findings at the public hearing and reducing its reasons to writing in the denial letter sent to

T&C.

¶11 T&C appeals, arguing the District Court relied on disputed facts to determine the

Zoning Ordinance granted the city commission broad discretion and that the city commission

acted arbitrarily and capriciously in reclaiming and denying its application.

STANDARDS OF REVIEW

¶12 The standard of review in appeals from summary judgment rulings is de novo. Erler

v. Creative Finance & Investments, L.L.C., 2009 MT 36, ¶ 16, ___ Mont. ___, ___ P.3d ___.

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Summary judgment is appropriate only when there is no genuine issue of material fact, and

the moving party is entitled to judgment as a matter of law. Erler, ¶ 16 (citing M. R. Civ. P.

56). We review questions of law to determine whether the district court’s legal conclusions

are correct. Erler, ¶ 16.

¶13 Section 76-2-327, MCA, authorizes a court reviewing a zoning decision made by a

board of adjustment or any officer, department, board, or bureau of the municipality to hold a

hearing and reverse, affirm, or modify a zoning decision. In Montana, a district court

reviews the zoning authority’s decision for an abuse of discretion. Flathead Citizens v.

Flathead County Bd., 2008 MT 1, ¶ 32, 341 Mont. 1, 175 P.3d 282; Arkell v. Middle

Cottonwood Bd., 2007 MT 160, ¶ 24, 338 Mont. 77, 162 P.3d 856. An abuse of discretion

occurs when the information upon which the municipal entity based its decision is so lacking

in fact and foundation that it is clearly unreasonable. Flathead Citizens, ¶ 32; North 93

Neighbors, Inc. v. Bd. of Co. Com’rs, 2006 MT 132, ¶ 44, 332 Mont. 327, 137 P.3d 557

(quotation omitted).

¶14 This Court does not sit as a super-legislature or super-zoning board. Englin v. Board

of County Com’rs, 2002 MT 115, ¶ 16, 310 Mont. 1, 48 P.3d 39; Anderson Ins. v. City of

Belgrade, 246 Mont. 112, 120, 803 P.2d 648, 653 (1990). The courts give deference to the

decisions of the local board. 83 Am. Jur. 2d Zoning and Planning § 677 (2003) (citing

Omnipoint Corp. v. Zoning Hearing Bd. of Pine Grove Tp., 181 F.3d 403 (3rd Cir. 1999)).

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¶15 The record shows the material facts of the instant case—the contents of T&C’s

application, the process of approval, and the city commission’s stated reasons for denial—are

not in dispute. Thus, only questions of law remain.

DISCUSSION

¶16 Issue 1: Did the Bozeman city commission violate T&C’s constitutional rights to

substantive due process and equal protection of the law when it denied T&C’s application

for approval of a site plan?

¶17 T&C is challenging the action of the city commission in denying its application. It

does not challenge Bozeman’s Zoning Ordinance. Under these circumstances, whether the

Bozeman city commission acted illegally when it denied T&C’s application does not present

a constitutional question. In examining a substantive due process claim, a court is concerned

with the constitutionality of the underlying rule rather than with the fairness of the process

by which the government applies the rule to an individual. Rotunda & Nowak, 2 Treatise on

Constitutional Law: Substance and Procedure § 14.6 (2nd ed. 1992). This Court has set

forth the analysis for evaluating a substantive due process claim:

Substantive due process analysis requires a test of reasonableness of a statute
in relation to the State’s power to enact such legislation. The essence of
substantive due process is that the State cannot use its police power to take
unreasonable, arbitrary or capricious action against an individual. In order to
satisfy substantive due process guarantees, a statute enacted under a state’s
police power must be reasonably related to a permissible legislative objective.

Raisler v. Burlington N. R. Co., 219 Mont. 254, 263, 717 P.2d 535, 541 (1985) (citations and

internal quotations omitted) (followed in State v. Webb, 2005 MT 5, ¶ 22, 325 Mont. 317,

106 P.3d 521); State v. Egdorf, 2003 MT 264, ¶ 21, 317 Mont. 436, 77 P.3d 517).
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Substantive due process primarily examines underlying substantive rights and remedies to

determine whether restrictions are unreasonable or arbitrary when balanced against the

purpose of a government body in enacting a statute, ordinance or regulation. Webb, ¶ 21;

Egdorf, ¶ 19. In other words, the test of whether the government denied a party

constitutional substantive due process concerns an examination of whether the government,

by enacting a piece of legislation, acted in an unreasonable, arbitrary, or capricious fashion.

¶18 A constitutional substantive due process analysis is inapplicable under the facts of this

case because T&C does not allege Bozeman’s Zoning Ordinance is unconstitutional. T&C

essentially argues the city commission failed to follow its own ordinance in denying its

application and therefore acted arbitrarily and capriciously. We address this argument in

Issue 2.

¶19 T&C also claims the city commission violated its constitutional right to equal

protection of the law when it denied its application. The Fourteenth Amendment to the

United States Constitution, and Article II, Section 4, of the Montana Constitution guarantee

equal protection of the law. Egdorf, ¶ 15; State v. Davison, 2003 MT 64, ¶ 10, 314 Mont.

427, 67 P.3d 203. The basic rule of equal protection is that the law must treat similarly-

situated individuals in a similar manner. Farrier v. Teacher’s Retirement Bd., 2005 MT 229,

¶ 14, 328 Mont. 375, 120 P.3d 390. To prevail on an equal protection challenge, the injured

party must demonstrate that the law at issue discriminates by impermissibly classifying

individuals or entities and treating them differently on the basis of that classification.

Davison, ¶ 10.

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¶20 T&C does not allege that the law, in this case Bozeman’s Zoning Ordinance,

discriminated against it by classifying its property differently than other similarly situated

property. T&C simply claims that the city commission denied its application, and thus

treated it differently than others owning property in B-1 zoned areas whose site plan

applications were granted. Again, T&C’s complaint challenges the city commission’s

decision, rather than the Zoning Ordinance, and does not present a constitutional denial of

equal protection claim.

¶21 Issue 2: Was the Bozeman city commission’s decision to deny T&C’s application an

abuse of discretion?

¶22 Generally, if a decision by a zoning authority adversely affects the owner of land in

the use of property, that owner is an aggrieved party and may challenge the decision.

Eugene McQuillin, Municipal Corporations § 25.318 (3rd ed. West 2003). Aggrieved

parties may challenge a zoning authority’s decision as unreasonable, arbitrary, capricious,

unfair, or discriminatory. McQuillin, Municipal Corporations § 25.309.

¶23 In Montana, municipalities may regulate, inter alia, the size of buildings and the

location and use of buildings, structures, and land for trade, industry, residence or other

purposes to promote health, safety, morals, or the general welfare of the community. Section

76-2-301, MCA. Bozeman adopted its Zoning Ordinance pursuant to § 76-2-301, MCA, and

the ordinance requires all development proposals to be subject to site plan approval by the

city commission or the planning director. Sections 18.02.020, 18.34.010(A), 18.64.010,

UDO. The requirements for denial of a site plan approval application are if “the conditions

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required for approval do not exist” and that the denial must be in writing. Section

18.34.090(D), UDO.

¶24 In Bozeman, the planning director generally grants or denies site plan approval

applications. However, the city commission, upon a vote of four out of five of its members,

may reclaim the final approval of an application from the planning director if it does so

before the planning director makes an official decision. Section 18.64.010(B)(1), UDO. If

an aggrieved party wishes to appeal a zoning decision made by the city commission, they

may present “to a court of record a petition, duly verified, setting forth that such decision is

illegal in whole or in part and specifying the grounds of illegality.” Section 18.66.080(B),

Bozeman Municipal Code (BMC).

¶25 T&C appealed to the District Court, alleging the city commission’s decision in

denying the site plan application was arbitrary, irrational, and in bad faith. As discussed

above, we review the city commission’s decision for an abuse of discretion. That is, whether

the city commission’s zoning decision was soundly based in fact. See Flathead Citizens,

¶ 32.

¶26 T&C’s argument on appeal is that the District Court relied on highly disputed facts to

determine that the city commission did not act arbitrarily and capriciously in three ways.

First, T&C presented evidence it complied with the size requirements of the Zoning

Ordinance, the Zoning Ordinance allowed the mini-stores to share common walls, and the

planning department recommended approval. Thus, T&C claims disputed facts exist

regarding whether its site plan conflicts with the Zoning Ordinance. Second, T&C asserts

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whether the city commission “carefully weighed” the criteria listed in the Zoning Ordinance

is disputed because the record shows the city commission did not consider all 20 criteria

which, according to T&C, is mandated. Finally, T&C claims whether the city commission

had any legitimate reason to reclaim its application from the planning director is disputed.

¶27 Essentially, T&C is arguing the District Court erred because it failed to re-weigh the

evidence, sit as a fact finder, and determine if T&C’s plan comported with the Zoning

Ordinance. However, pursuant to Bozeman’s Zoning Ordinance, the city commission is the

appropriate fact-finder, and it decided T&C’s site plan did not comply with requirements of

the B-1 zoning district. The District Court’s job is not to re-try the facts, but to review the

city commission’s decision for an abuse of discretion. Flathead Citizens, ¶ 32. In turn, this

Court reviews whether the District Court erred in concluding the city commission did not

abuse its discretion. See Flathead Citizens, ¶ 55. If the record contains sufficient evidence

showing the city commission’s decision to deny T&C’s application was reasonable and

based in fact, we will not disturb the District Court’s conclusion.

¶28 Section 18.34.090, UDO, lists 20 criteria for the city commission to consider when

reviewing a site plan application. The 20 enumerated criteria include, inter alia,

conformance with the growth policy, conformance with the Zoning Ordinance and other

applicable laws, impact on existing and anticipated traffic and parking, pedestrian and

vehicular traffic, setbacks and wetlands, and comment from affected parties. Additionally,

the city commission considers the relationship of the site plan elements to conditions both on

and off the property, including compatibility with the adjacent neighborhoods, and whether

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the design produced an efficient, functionally organized and cohesive development. Section

18.34.090(A)(20), UDO.

¶29 The record shows the city commission considered the relevant criteria listed in

§ 18.34.090(A), UDO, and stated its reasons for deciding that T&C’s site plan did not

conform to the B-1 zone. At the public meeting the city commissioners heard from the

associate planner, a project engineer, and several members of the community. The associate

planner discussed setbacks, wetlands, floodplains, and parking issues then recommended

approval of T&C’s application. The project engineer addressed issues relating to traffic and

rates of development. Jerry Perlinski addressed some of the traffic concerns regarding this

kind of store being located close to a residential area. Community members, affected by the

development, made both positive and negative comments about T&C’s site plan.

¶30 Finally, each commissioner commented on the proposal. One supported approving

the site plan because he thought it adequately addressed and mitigated traffic issues and

because the size of the buildings complied with the requirements of the zone. The other

commissioners, voting to deny T&C’s application, stated their reasons for denial were:

“shoehorning” the development into the proposed site; the distance of the development from

controlled intersections; a traffic study showing traffic degradation; setting an undesirable

precedent for the B-1 zone; negative neighborhood feedback; historic preservation; parking

problems; and, meeting the character of the B-1 zone and neighborhood. In its letter, the city

commission told T&C its application was denied because it was “not in keeping with the

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character of the neighborhood or the intent of the B-1 Neighborhood Business zoning

district.”

¶31 We cannot conclude that the information relied on by the city commission to make its

decision lacked foundation or that its decision was unreasonable. The city commission

addressed relevant criteria—vehicle and pedestrian traffic, parking, wetlands, setbacks, and

conformity with the neighborhood. The city commission complied with its Zoning

Ordinance and gave reasons for its denial of T&C’s site plan. The city commission did not

abuse its discretion.

¶32 Further, the city commission did not abuse its discretion when it reclaimed T&C’s

application. The Zoning Ordinance provides that the city commission may make the final

decision on an application--either on appeal from the planning director, or after its own

consideration. Section 18.66.010(B), BMC; § 18.64.010(B)(1), UDO. Although the

planning director said he would recommend approval, he warned T&C that the city

commission had the prerogative to disagree, thus his decision was not final. The city

commission held a public meeting and unanimously voted to reclaim T&C’s application

from the planning director, giving as their reasons the heading off of an eventual appeal and

protecting public interest and safety. The city commission followed its ordinance in

reclaiming and passing on T&C’s application. We do not determine it abused its discretion

in doing so.

CONCLUSION

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¶33 The record shows that the Bozeman city commissioners did not abuse their discretion

in reclaiming and denying T&C’s application for site plan approval.

¶34 Affirmed.

/S/ JOHN WARNER

We Concur:

/S/ JIM RICE
/S/ BRIAN MORRIS
/S/ JAMES C. NELSON

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