MC Properties, Inc. v. City of Chattanooga

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

MC PRO PER TIES , INC., ) C/A NO. 03A01-9807-CH-00216

)

Plaintiff-Appellee, ) HAMILTON CHANCERY

)

FILED

v. ) HON. HOWELL N. PEOPLES,

) CHANCELLOR January 28, 1999

THE CITY OF CHATTA NOOGA and ) Cecil Crowson, Jr.

THE CHATTANOOGA CITY ) Appellate C ourt

Clerk

COUNCIL, ) REVERSED

) AND

Defendants-Appellants. ) REMANDED

JOHN R. ANDERSON and HARRY R. CASH, GRANT, KONVALINKA &

HARRISON , P.C., Chattanooga, for Plaintiff-Appellee.

PHILLIP A. N OBLETT and LAWR ENCE W . KELLY, Chattanooga, for D efendants-

Appellants.

O P I N IO N

Franks, J.

The City Council denied plaintiff’s request to rezone 10.2 acres of a

certain tract of land on and near Shallowford Road in Chattanooga. Plaintiff filed a

petition for certiorari in the Chancery Court and after trial, the Chancellor ordered

rezoning o f the prope rty. The City has ap pealed to th is court.

The issues raised on appeal are:

1. Whether the Trial Court erred in admitting evidence and

testimony wh ich had no t been prese nted to the C ity Council.

2. Whether the Trial Court erred in finding that the action of the

City Council was illegal, arbitrary or capricious.

3. Whether the denial of the rezoning request constitutes an

unconst itutio nal ta king of prope rty.

Zoning cases have historically entered the court system through two

differe nt proc edures , i.e., a writ o f certior ari and a declara tory judgm ent actio n.

Tenness ee Code Annota ted §27-8 -101 add ressing the c ommo n law w rit of certiorari,

provides that the “writ of certiorari may be granted whenever authorized by law, and

also in all cases where an inferior tribunal, board, or officer exercising judicial

functions has exceeded the jurisdiction conferred, or is acting illegally, when in the

judgment of the court, there is no other plain, speedy or adequate remedy.” The Code

also provides for a statutory writ of certiorari: “anyone who may be aggrieved by any

final order o r judgmen t of any board or comm ission func tioning und er the laws o f this

state may have said order or judgment reviewed by the courts.” T.C.A. §27-9-101.

The language of the Code appears to limit the writ to judicial determinations by lower

tribunals or administrative agencies, making the writ appropriate for such matters as

appeals from determ inations made by a Bo ard of Zoning A ppeals, which are

administrative, but inappropriate for such matters as challenges to the enactment of

ordinances or resolutions w hich create or amend zoning regulations, wh ich are

legislativ e. Fallin v. Knox County Bd. Of Comm ’rs., 656 S.W.2d 338, 342 (Tenn.

1983). The Te nnessee Suprem e Court has said that “an action for declaratory

judgment, as provided by T.C.A. §§29-14-101--29-14-113, 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 county, city or other municipal

legislative authority enacting or amending zoning legislation.” Id. The Co urt,

however, went on to say that “where, as here, the plaintiff mistakenly employs the

remedy of certiorari the court may treat the action as one for declaratory judgment and

proceed accordingly, rather than dismiss the action.” Id.

The review by courts in a declaratory judgment action examining the

validity of a zon ing ordinan ce is limited. Z oning has long been accepted a s a valid

exercis e of the police p ower. See Spen cer Sturla C o. V. City of M emphis , 155 Tenn.

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70, 290 S.W. 608, 612-613 (1927). When faced with such an exercise of police power

the Supreme Court has stated:

Zoning is a legislative matter, and, as a general proposition, the exercise

of the zoning power should not be subjected to judicial interference

unless clearly necessary. In enacting or amending zoning legislation, the

local authorities are vested with broad discretion and, in cases where the

validity of a zoning ordinance is fairly debata ble, the court cannot

substitute its judgment for that of the legislative authority. If there is a

rational or ju stifiable basis for the enactment and it does not violate any

state statu te or po sitive co nstitution al guara nty, the wisdom of the zoning

regulation is a matter exclusively for legislative determination. In

accordan ce with the se principles, it h as been state d that the co urts

should not interfere with the exercise of the zoning power and hold a

zoning enactment invalid, unless the enactment, in whole or in relation

to any particular property, is shown to be clearly arbitrary, capricious, or

unre ason able , hav ing n o sub stantial re latio n to the public hea lth, safet y,

or welfare , or is plainly contrar y to the zoning laws. (Em phasis

supplied).

Fallin, 656 S .W.2d at 342- 343, also see Davidson County v. Rogers, 184 Tenn. 327,

198 S.W .2d 812-8 14-815 (1 947); Family Golf of Nashville, Inc. V. The Metropolitan

Gov’t of N ashville and Davidso n Coun ty, 964 S.W.2d 25 4, 260 (Tenn. A pp. 1997);

Carter v. Adams, 928 S.W .2d 39, 40 (T enn. Ap p. 1996); Copeland v. City of

Chattanooga, 866 S .W.2d 565, 56 7 (Ten n. App . 1993) .

Though there a re procedural differenc es between com mon law certiorari

and decla ratory judgme nt, any distinction in the applicatio n of the su bstantive law to

legislative and administrative actions has “dissipated with the passage of time.”

McA llen v. C ity of M emph is, 786 S.W.2d 633, 641 (Tenn. 1990). The Tennessee

Supreme Court has found:

The “fairly debatable, rational basis,” as applied to legislative acts, and

the “illegal, arbitrary and capricious” standard relative to administrative

acts are essentially the same. In either instance, the court’s prim ary

resolve is to refrain from substituting its judgment for that of the local

government body. An action will be invalidated only if it constitutes an

abuse of discretion. If “any possible reason” exists justifying the action,

it will be upheld . (Id.)

Whether there is sufficient evidence to support the zoning action is a

question of law, making appellate review de novo without a presumption of

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correct ness. Carter v. Adams, 928 S.W.2d 39, 40 (Tenn. App. 1996). Tennessee Rules

of Appellate Procedure 13.

Though the Trial Court did not state it was treating the matter as a

declaratory judgment action, that is essentially what it did by admitting additional

evidence. It allowed in evidence what it considered relevant to any of the matters that

were disc ussed by the m embers o f the City Co uncil, instead o f limiting the e vidence to

the record of the hearing.

Under the declaratory judgment provisions, the admission of new

evidence is not limited as it is under a writ of certiorari. The statute provides that

“[w]he n a procee ding und er this chapte r involves th e determin ation of an issue of fa ct,

such issue may be tried and determined in the same manner as issues of fact are tried

and determined in other civil actions in the court in which the proceeding is pending.”

T.C.A. §29-14-108. It also provides that the chapter “is to be liberally construed and

administered.” T.C.A . §29-14-113. An y evidence that is relevant to the court’s

responsibility of determining whether the zoning decision is “fairly debatable” or

wheth er there is “any po ssible re ason” f or the zo ning re gulation should be adm itted.

That is what the Trial Judge did in this case, and it was proper to do so.

We conclude the Trial Court was in error in finding that the action of the

City Council was illegal, arbitrary or capricious. The Supreme Court has determined

that “‘fairly deba table, rational b asis,’ as applied to legislative ac ts, and the ‘illega l,

arbitrary and capricious’ standard relative to administrative acts are essentially the

same. In eith er instance, the court’s prim ary resolve is to ref rain from s ubstituting its

judgmen t for that of th e local gov ernmenta l body. An ac tion will be in validated o nly

if it constitutes an abuse of discretion. If ‘any possible reason’ exists justifying the

action, it will be upheld.” McAllen, 786 S .W.2d at 641.

The City advanced several reasons why the Council properly denied the

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change o f zoning. T hey may not be good rea sons, but this is n ot for the C ourt to

determine so long as the issue is fairly debatable. Barry Bennett, the Director of

Current Planning and Operations of the Regional Planning Agency, offered testimony

that the staff of the Planning Agency recommended denial because under the current

policy, Shallowford Road has been established as the most definable stopping point

for the northward expansion of commercial development in the area, and the area

south of Shallowford Road is all commercial and the area north of Shalllowford Road

is predominantly residential. He exp lained that the policy recommen ds R-4 and O -1

type zones on the frontage properties, which would be low density, low traffic office

or institutional z ones wh ich wou ld serve as a buffer be tween the comme rcial areas to

the south and the residential areas to the north.1 The staff also wan ted to set a

precedent, because if the properties in question were rezoned, Mr. Bennett anticipated

rezoning requests for another 70 or 75 acres of property in the area currently zoned

residential. He stated that the street system could not accommodate the traffic that

would be generated by 70 more acres of commercial development, and that

improv emen ts wou ld need to be m ade to th e roads before any rezo ning tak es place .

Bennett believes that the area will go commercial eventually, but he wants the

improvements to the roads to be made first. Bennett testified that the staff also

consid ers the im pact on people who liv e in the a rea and people who s hop in t he area .

This potential rezoning, along with other potential rezoning, would have a significant

impact on the residents and shoppers until the new infrastructure is in place.2

1

The plaintiff did not request R-4 or O-1 zones in this case.

2

Bennett conceded on cross-examination that the City does not always adhere to the plans it

creates for development. He observed:

You know, and it’s our hope that they adhere to the plans, but sometimes that isn’t always

the case.

The record demonstrates that the City has not adhered to its plans for the development of this

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Even tho ugh plaintif f in this case o ffered ev idence that it c ould

accommodate any additional traffic, it might generate, limiting commercial

developm ent in this area until the app ropriate infra structure can be built is a fa irly

debatable issue. While the City Council has previously allowed rezoning, without

having proper infrastructure in place, and the fact that the City Council often goes

against the recommendations of the planning agency staff, the Council has the power

to zone property in its discretion, so long as it is rationally related to the welfare of the

people. Waiting to rezone property until the road system can handle the additional

traffic, is in the power of the legislative body, and if the Council’s decision diminishes

the valu e of pro perty, it is in th eir legisla tive pow er to do so, as w ell. See Nichols v.

Tullahoma Open Door, Inc., 640 S.W.2d 13 (Tenn. App. 1982). The legislative body

does not have to enact zoning regulations which would provide the best use of the

property. It has br oad discretio n to zone a s it feels prop er, which it e xercised in th is

case.

Though the property in question should, and probably will, eventually be

zoned commercial, the issue is fairly debatable at the present time, and we may not

substitute ou r judgmen t for the City C ouncil. W e find no b asis to overtu rn their

decision.

Finally, the Trial Court dismissed plaintiff’s claim of an unconstitutional

taking und er inverse co ndemna tion, before the hearing on this matte r. It does relate to

our prior determination that the issue to rezone was a fairly debatable issue.

This Court has previously held that zoning regulations may not deprive

proper ty owne rs of the benef icial use of their proper ty. Campbell v. Nance, 555

S.W.2d 4 07 (Tenn . App. 197 6); Bayside W arehouse Co. v. City o f Memp his, 63 Tenn.

area, and such deviations needlessly raise the specter of favoritism and diminish the legitimacy of

such plans.

6

App. 268, 470 S.W.2d 375 (1971). These cases are distinguishable from the present

case. In Camp bell, the property in question was zoned residential and was surrounded

by property zoned commercial. The property never had a home on it and was not

suitable for residential purposes in its condition. The entire area had become

comme rcially oriented, an d based u pon these factors, the C ourt determ ined that to

leave the lot z oned resid ential wou ld deprive th e owne rs of the be neficial use o f their

prop erty.

Similarly, in Bayside, the City Council of the City of Memphis rezoned

twenty-three acres of land ow ned by Bayside Wareh ouse Comp any from M-2

Industrial to C-3 Com mercial. The property was lo cated on Mu d Island. The Co urt

found that the property was ideally suited for river-oriented industry, because it had

virtually no access by land a nd ther e were no plan s to build access in the ne ar futur e.

In its then condition it was not at all suitable for commercial use, so commercial

zoning would depriv e the ow ners of any bene ficial us e wha tsoeve r. Id. at 377.

Here, the property owners, while not receiving the most beneficial use

of their property, do have a beneficial use. The land consists of a church and two

residential homeow ners. The church is cu rrently using the property as a church. It

wants to se ll the property so th at it can mov e to a larger trac t of land do wn the stre et,

but it is still able to use its property. Only one residential homeowner testified. He

testified that the area has changed drastically since he moved there, and that he does

not wan t to live there an y longer. He s aid he has n ot received offers to b uy his

property from anyone other than commercial developers. Though he has not received

any offers, he did not testify that he has actively tried to sell his property as office

property or residential property. The record shows available beneficial uses of the

properties, contrasted with Camp bell and Bayside. Accord ingly, there is no b asis to

hold that there has been an unconstitutional taking absent rezoning.

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For the foregoing reasons, the decision of the Trial Court vacating the

denial of th e rezoning petition by the C ity is reversed, and the decision of the City

Council is reinstated.

The cost of the appeal is assessed to appellee, and the cause remanded.

__________________________

Herschel P. Franks, J.

CONCUR:

___________________________

Don T. McM urray, J.

___________________________

Charles D. Susano, Jr., J.

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