Land use license stuck in slow lane

Law of the Land

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Jan. 6, 2010

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Law of the Land

Tara-Nicholle Nelson
Inman News

In the case Triumph Transport Inc. v. City of Bellflower, et al., Edwin Soto was in contract to buy a property to house his trucking company office and store the company's trucks. The property was located in an area zoned "light industrial." Soto notified the city of his intended use of the property and was advised that the use might or might not require a conditional use permit; later (but prior to Soto closing escrow on the property) the City Planning Commission voted to require Soto to obtain a conditional use permit.

The day after the commission voted, Soto submitted an application for a business license. More than a month later, Soto was told by city staffers that he should resubmit the application and that it would be granted (without a conditional use permit), as his proposed use had been determined to be allowed. In fact, the city never processed either application.

About a week after the second application was submitted, the City Council voted in an urgency ordinance imposing a moratorium to the effect that, for 45 days, "no application for a business license for a draying, freighting, or trucking yard and/or terminal would be processed without a conditional use permit."

The following day, the city wrote to advise Soto of the new moratorium. That same day, in reliance on city staff's earlier assurances that the intended use would be allowed without a conditional use permit, Soto closed escrow on the property. The following day, Soto received the city's notification regarding the moratorium.

Soto then filed suit against the city, asking the court to order the city to issue the business license on grounds that the city's own assurances that it would be issued should preclude the city from refusing the license.

The trial court ruled in favor of Soto, but did not order the city to issue the business license.

On appeal, the trial court's ruling was reversed. The city argued that Soto did not possess a vested, protectable right in the zoning of the property until he became the owner, so that the city was not required to make a decision on the two licensing applications Soto submitted until after escrow closed (which was also after the moratorium had been imposed).

Soto counterargued that because he was in compliance with the licensure requirements in place at the time he submitted the license applications, the city did not have the discretion to reject the applications and the moratorium was inapplicable to his application.

In an unpublished opinion, the Court of Appeal explained that while a retroactive application of the moratorium would not be appropriate in the absence of an emergency situation as against a vested right, because Soto neither owned the property, held a use permit nor had expended any funds in reliance on an existing permit, he did not possess a vested right in either the existing or future zoning of the property.

Further, because the city specified that Soto's inquiries had prompted it to re-examine the potential impacts of a trucking business on the health and safety of the neighboring public, the moratorium was properly enacted as an emergency measure.

Finally, even where the equitable elements of estoppel exist, the court cited the precedential rule that "a party faces 'daunting odds' to establish estoppel against a governmental entity in a land use case."

Weighing the potential for injustice to Soto against the adverse effect on public policy of allowing development to proceed outside of proper planning and permitting processes, the court invoked the facts that Soto was aware that the City Planning Commission was planning to require him to obtain a conditional use permit -- no matter what other staffers told him.

Accordingly, the court held that "there is no injustice here in requiring Triumph to participate in the conditional permit process and undergo a review that will ensure that the city's needs for public health and safety are met," and reversed the trial court's ruling.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.

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