William H. Thompson, Jr. v. Department of Codes Administration, Metropolitan Government of Nashville and Davidson County

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

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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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