West End Citizen Association v. District of Columbia Board of Zoning Adjustment Foggy Bottom Grocery, LLC

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DISTRICT OF COLUMBIA COURT OF APPEALS

No. 11-AA-39

WEST END CITIZENS ASSOCIATION,

PETITIONER,

V.

DISTRICT OF COLUMBIA BOARD OF ZONING ADJUSTMENT,

RESPONDENT;

FOGGY BOTTOM GROCERY, LLC,

INTERVENOR.

On Petition for Review of a Decision of the

District of Columbia Board of Zoning Adjustment

(BZA-18031-A)

(Argued: November 29, 2011* Decided: April 2, 2015)

Martin P. Sullivan for petitioner.

Constance J. Miller for intervenor.

*

As explained more fully in the text of this opinion, this court issued its

initial decision in this case in an unpublished memorandum opinion and judgment

that was dated August 16, 2012, and amended December 19, 2012. We reversed

the Board of Zoning Adjustment in part and remanded the record for it to resolve

certain remaining issues. After further proceedings, the Board decided those issues

in a final decision and order on remand dated December 8, 2014. Thereafter, this

court received the augmented record and the parties’ statements of their positions.

Neither party requested further oral argument.

2

Irvin B. Nathan, Attorney General for the District of Columbia at the time,

Todd S. Kim, Solicitor General, Donna M. Murasky, Deputy Solicitor General, and

Andrew Van Brisker, Assistant Attorney General, filed a Statement in Lieu of Brief

in support of intervenor.

Before GLICKMAN and MCLEESE, Associate Judges, and FARRELL, Senior

Judge.

GLICKMAN, Associate Judge: This is round two in an appeal by the West

End Citizens Association (“WECA”) of a Certificate of Occupancy (“C of O”)

granted to intervenor, Foggy Bottom Grocery, LLC. Intervenor does business

under the name FoBoGro. The C of O allowed FoBoGro to operate a grocery in a

residentially zoned neighborhood of the District of Columbia known as Foggy

Bottom. In round one, the Board of Zoning Adjustment (“BZA”) concluded that

the proposed grocery business would not constitute an improper expansion of a

nonconforming use and therefore upheld the C of O. This court reversed that

decision. On remand, the BZA again rejected WECA’s appeal of the C of O, this

time on equitable estoppel grounds. Before us now is WECA’s petition for review

of that determination. For the reasons that follow, we affirm.

I.

The building at the center of this controversy is a three-story row house

located at 2140 F Street, N.W. It has been the site of a grocery store since 1946.

3

The operation of that grocery on one floor of the building has been a lawful

nonconforming use in a residentially zoned area since at least May 12, 1958, when

the modern zoning map became effective.

In 2008, FoBoGro became interested in acquiring and modernizing the

grocery business there. Before doing so, it applied for a new C of O to allow the

entire building to be used for a grocery store and what its application referred to as

a “sandwich shop.” The Zoning Administrator approved the application and issued

the requested C of O on August 21, 2008. The C of O provided that the total area

of the building that could be devoted to the approved uses was 1,835 square feet,

which encompassed all three floors. After receiving this C of O, FoBoGro

purchased the business, leased the building from George Washington University,

and eventually began renovating the property.

WECA did not learn of FoBoGro’s August 2008 C of O until around August

2009. It then complained to the Zoning Administrator that the C of O improperly

expanded a nonconforming use in two respects: by allowing the operation of a

grocery to expand from one floor of the building to all three floors, and by

permitting the operation of a sandwich shop at the location in addition to a grocery.

In response to WECA’s complaints, the Zoning Administrator sent a revocation

4

notice to FoBoGro on October 14, 2009. “Because you changed the prior use of

the Property in your application by the adding of a proposed ‘sandwich shop use,’”

the notice stated, “the C of O . . . was issued in error.” The notice did not cite the

alleged expansion of the grocery store use from one to three floors as a basis for

revocation.1

FoBoGro opposed the threatened revocation. It explained that it merely

intended to sell sandwiches and other prepared foods for off-premises consumption

only, as a component of its grocery business. This explanation satisfied the Zoning

Administrator that no expansion of the nonconforming use was planned. On

November 4, 2009, he issued a new C of O to FoBoGro to replace the August 2008

C of O. The new C of O continued to permit a grocery business to be conducted in

the 1,835 square foot space at 2140 F Street. The only differences were that it

described the authorized use as including an “accessory prepared food shop”

1

Although prior C of O’s had authorized use of the first floor as a grocery

store without mentioning the other two floors of the building, the Zoning

Administrator determined that those other floors always had been utilized to

provide storage and office space for the grocery. This was permissible in the

Zoning Administrator’s view because C of O’s for commercial establishments

typically did not mention parts of the premises that were not open to the public.

The Zoning Administrator therefore concluded that FoBoGro’s use of the floors in

its grocery business did not constitute an expansion of the nonconforming use of

the premises, even though FoBoGro planned to repurpose the floors for retail use.

5

instead of a “sandwich shop,” and it stated explicitly that the approved occupancy

comprised three floors of the building.

WECA promptly appealed the November 2009 C of O to the BZA. It

contended that the C of O impermissibly expanded the existing nonconforming

grocery use by permitting FoBoGro to use the entire building in the grocery

business instead of only one floor, and by permitting the operation of an accessory

prepared foods shop. FoBoGro disputed these contentions and asserted affirmative

equitable defenses of laches and estoppel.2

After a hearing at which the Zoning Administrator and other witnesses

testified, the BZA rendered its initial decision in this case. It ruled that the C of O

2

More or less simultaneously in the fall of 2009, WECA also protested an

application FoBoGro filed with the Alcoholic Beverage Control Board (the “ABC

Board”) for changes in its retailer’s license to allow it to expand to three floors,

extend its operating hours, and incorporate a take-out deli. WECA objected that

these changes would have an adverse impact on the peace, order, and quiet of the

neighborhood, and on parking, vehicular and pedestrian safety, and residential

property values. The ABC Board held a hearing on WECA’s protest, at which

WECA representatives testified. Ultimately, the ABC Board granted FoBoGro’s

application, finding that the requested changes in FoBoGro’s grocery business

were “appropriate for the location” and would “not adversely impact the peace,

order, and quiet of the neighborhood; residential parking needs and vehicular and

pedestrian safety; and real property values” in the area. WECA’s submissions to

the ABC Board and that Board’s decision are included in the administrative record

of WECA’s appeal of FoBoGro’s C of O to the BZA.

6

did not authorize an impermissible expansion of the nonconforming grocery store

use, because that use had not been limited in the past to only one floor of the

building, and because the incidental sale of prepared food for off-site consumption

was part of the grocery business. The BZA therefore denied WECA’s appeal of

the C of O without finding it necessary to address FoBoGro’s equitable defenses.

WECA sought review in this court. In an unpublished memorandum

opinion, we affirmed the BZA’s determination that the sale of prepared food was

encompassed in the grocery use. We held, however, that the nonconforming

grocery use at 2140 F Street had been limited by the terms of earlier C of O’s to

one floor of the building, and that it was improper for the November 2009 C of O

to permit the expansion of such use to the rest of the building. We remanded the

record to the BZA for it to consider three remaining issues: the timeliness of

WECA’s appeal of the Zoning Administrator’s approval of the expanded grocery

use, and FoBoGro’s laches and estoppel defenses to the revocation of its C of O.3

3

This court identified the timeliness issue sua sponte, noting that the Zoning

Administrator first authorized the expansion of the nonconforming grocery use

throughout the building in the 2008 C of O over a year before WECA filed its

appeal. See 11 DCMR § 3112.2 (a) (2015) (providing that an appeal of a decision

to grant a C of O must be filed within sixty days from “the date the person

appealing the administrative decision had notice or knowledge of the decision

complained of, or reasonably should have had notice or knowledge of the decision

complained of, whichever is earlier”); Basken v. District of Columbia Bd. of

(continued…)

7

In its decision on remand, the BZA ruled that FoBoGro had forfeited a

challenge to the timeliness of WECA’s appeal4 and had not established a laches

defense. The BZA concluded, however, that FoBoGro’s equitable estoppel

defense to revocation of its C of O was meritorious. Accordingly, the BZA

dismissed the remaining portion of WECA’s appeal.

The augmented record of the proceedings before the BZA has been returned

to this court for a final decision on WECA’s petition for review. In compliance

with our remand order, the parties have advised us of their positions with respect to

the BZA’s decision. FoBoGro concurs with the order of dismissal and does not

seek review of the BZA’s determinations regarding timeliness and laches. WECA

argues that the BZA erred in accepting FoBoGro’s estoppel defense and asks us to

reverse the dismissal. Our review of the BZA’s determination is limited in nature.

(continued…)

Zoning Adjustment, 946 A.2d 356, 367 (D.C. 2008) (explaining that the issuance of

a new C of O “does not … start another sixty-day appeal period as to any and all

DCRA zoning decisions affecting a project that preceded issuance of the

certificate”).

4

Relying on this court’s decision in Gatewood v. District of Columbia Water

& Sewer Auth., 82 A.3d 41 (D.C. 2013), the BZA concluded that the time limit in

the zoning regulations for appealing a C of O is a non-jurisdictional claim-

processing rule. See id. at 46-49. Prior decisions of this court held the time limit

to be jurisdictional. See, e.g., Economides v. District of Columbia Bd. of Zoning

Adjustment, 954 A.2d 427, 434-35 (D.C. 2008).

8

We must affirm its factual findings as long as they are based on substantial

evidence in the record and, ultimately, we must sustain its action unless it was

arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with

law.5

II.

Because of the public interest in enforcement of the zoning laws, stringent

conditions are placed on the assertion of an equitable estoppel defense against the

government, and “its application is limited to situations when the equities are

strongly in favor of the party invoking the doctrine.”6 Thus, as the BZA correctly

recognized, we typically have said that to make out a case of estoppel, a party must

show that “(1) acting in good faith, (2) on affirmative acts of [the zoning

authority], (3) he made expensive and permanent improvements in reliance

5

Kuri Bros. v. District of Columbia Bd. of Zoning Adjustment, 891 A.2d

241, 244-45 (D.C. 2006); D.C. Code § 2-510 (a)(3) (2012 Repl.).

6

Sisson v. District of Columbia Bd. of Zoning Adjustment, 805 A.2d 964,

972 (D.C. 2002) (internal quotation marks and brackets omitted); see also id. at

971 (emphasizing the “fundamental notion” that defenses of laches and estoppel

are “judicially disfavored in the zoning context”) (internal quotation marks

omitted).

9

thereon, and (4) the equities strongly favor him.”7 For the equities to favor the

party claiming an estoppel, any injury to the public that would flow from the non-

enforcement of the zoning law must be minimal and outweighed by the injury

estoppel would avoid.8

7

Id. at 972 (internal quotation marks and brackets omitted). See also 4

RATHKOPF’S THE LAW OF ZONING AND PLANNING (hereinafter, “RATHKOPF”) §

65:29 (2014) (“A basic formulation of estoppel elements states that a local

government exercising its zoning powers will be estopped when a property owner

(1) relying in good faith, (2) upon some act or omission of the government, (3) has

made such extensive obligations and incurred such extensive expenses that it

would be highly inequitable and unjust to destroy the rights which the owner has

ostensibly acquired.”); Interdonato v. District of Columbia Bd. of Zoning

Adjustment, 429 A.2d 1000, 1003 (D.C. 1981) (“Only by showing each of the

following elements could petitioners successfully invoke an estoppel claim: (1)

expensive and permanent improvements, (2) made in good faith, (3) in justifiable

and reasonable reliance upon[] (4) affirmative acts of the District government, (5)

without notice that the improvements might violate the zoning regulations; and (6)

equities that strongly favor the petitioners.”).

8

We note that an estoppel of government action to enforce the zoning laws

does not necessarily foreclose private enforcement of rights under those laws—for

example, where an adjoining property owner whose “interest is distinct from and

greater than that of the community as a whole” complains in a timely manner of

special damages attributable to an erroneously issued building permit or C of O.

Garrou v. Teaneck Tryon Co., 94 A.2d 332, 335 (N.J. 1953); see generally 4

RATHKOPF § 65:32 (“Laches and estoppel involving adjoining owners”). The

availability of private relief when the government is estopped from revoking a

permit or a C of O, or from otherwise enforcing the zoning laws, is a question our

court has yet to resolve or examine in detail. See Rafferty v. District of Columbia

Zoning Comm’n, 583 A.2d 169, 176 (D.C. 1990) (“This court has never

determined whether the District’s erroneous issuance of a permit may operate to

estop other interested persons from enforcing their rights under the zoning laws.”);

Saah v. District of Columbia Bd. of Zoning Adjustment, 433 A.2d 1114, 1117 n.3

(D.C. 1981) (holding BZA estopped from denying a variance where, inter alia,

(continued…)

10

The BZA concluded the requirements of equitable estoppel were satisfied in

this case because it found that (1) the Zoning Administrator’s 2008 C of O

permitted the entire building to be used for the operation of a grocery; (2)

FoBoGro proceeded reasonably and in good faith, having no reason to believe the

2008 C of O impermissibly expanded the nonconforming grocery use; (3)

FoBoGro relied on the 2008 C of O by spending “considerable sums” to purchase

the grocery business, lease the building, enter into various contracts, renovate the

building, and incur other business expenses; and (4) the equities favored FoBoGro,

because of its good faith and objectively reasonable reliance on the 2008 C of O,

and because the BZA found “no evidence” that the neighborhood would be harmed

by the continued operation of “a grocery store that has been a neighborhood

institution for over 60 years.”

(continued…)

injury to the public would be “minimal,” but not “reach[ing] the question of the

effect of the estoppel on a claim made by a neighboring landowner”); Goto v.

District of Columbia Bd. of Zoning Adjustment, 423 A.2d 917, 925 n.15 (D.C.

1980) (“It is not clear that estoppel will bar a case brought by a neighboring

landowner; arguably, that defense may be asserted only against the municipality

which rendered the decision on which a party relied.”). Given the absence of any

convincing showing of prejudice to WECA, as we discuss below, we conclude in

the present case only that the BZA permissibly relied on estoppel principles to

foreclose WECA’s challenge to the issuance of the 2009 C of O to FoBoGro.

11

WECA’s principal argument on appeal is that FoBoGro “could not have

relied justifiably or reasonably”9 on the 2008 C of O when it incurred the bulk of

its renovation expenses, because it did so after WECA commenced its attack on

the C of O in August 2009.10 But as the BZA appreciated, FoBoGro relied on the

2008 C of O to its considerable financial detriment in other ways well before it

learned of WECA’s challenge to the legality of its C of O, for example by

purchasing the grocery business and entering into a lease of the building.

Although our cases in the zoning context have focused on whether the party

invoking estoppel made expensive and permanent improvements in reliance on the

erroneous governmental decision, we see no reason in principle why other forms of

reliance cannot equally support an estoppel. Any error by the BZA in taking

FoBoGro’s renovation costs into account strikes us as surely inconsequential.11

9

Interdonato, 429 A.2d at 1004.

10

FoBoGro was not issued a building permit authorizing renovations until

August 16, 2009, and construction at the property did not begin until late

September or early October 2009.

11

Under “the rule of prejudicial error,” D.C. Code § 2-510 (b), “reversal and

remand is required only if substantial doubt exists whether the agency would have

made the same ultimate finding with the error removed.” Arthur v. District of

Columbia Nurses’ Exam. Bd., 459 A.2d 141, 146 (D.C. 1983); see, e.g., Neighbors

Against Foxhall Gridlock v. District of Columbia Bd. of Zoning Adjustment, 792

A.2d 246, 254 (D.C. 2002); Glenbrook Rd. Ass’n v. District of Columbia Bd. of

Zoning Adjustment, 605 A.2d 22, 44 (D.C. 1992).

12

WECA also argues that FoBoGro was precluded from asserting its estoppel

defense because the C of O at issue in the present proceedings is not the 2008 C of

O on which it relied, but rather is the replacement C of O that the Zoning

Administrator issued in November 2009. We do not agree, because the latter C of

O continued without material change the earlier authorization in the 2008 C of O

of a grocery use on all three floors of the building, and FoBoGro had no reason or

occasion to assert its estoppel defense at any time before WECA appealed the 2009

C of O.

Furthermore, contrary to WECA’s contention, the BZA’s finding that

FoBoGro acted in good faith is not undermined by the fact that its principal (Mr.

Hart) identified himself as the business owner in the application for the 2008 C of

O before FoBoGro actually purchased the grocery. This fact was not concealed

and there is no indication that the Zoning Administrator was misled in any way or

that WECA or any other party was prejudiced by the irregularity.

Finally, regarding the BZA’s assessment of the competing equities, WECA

disagrees with the finding that the expansion of the nonconforming grocery store

use from one to three floors will not harm the surrounding neighborhood. WECA

appears to complain that the BZA failed to address its claims of prejudice.

13

However, WECA does not even attempt to demonstrate that the BZA’s finding

lacks substantial support in the record, nor does it point us to evidence of any

actual harm flowing from the grocery store operation. WECA’s expressed

concerns about possible adverse effects on the area’s tranquility, traffic, and

property values were speculative and unsubstantiated. In our view, the BZA’s

dismissal of those concerns—it found “no evidence” of harm and stated that “[i]n

fact, WECA has never argued that it has been harmed in any way by the operations

of the grocery store”—was within the ambit of its discretion as fact finder.

In sum, we are not persuaded that the BZA materially erred in finding on the

record before it that FoBoGro satisfied all the requirements for an equitable

estoppel of the revocation of its C of O. We likewise are not persuaded that the

BZA misunderstood or misapplied the law, that it acted arbitrarily or capriciously,

or that it abused its discretion. Accordingly, we uphold the determination that

FoBoGro established its estoppel defense and affirm the BZA’s order of December

8, 2014, dismissing the remainder of WECA’s appeal of the November 2009 C of

O issued to FoBoGro.

So ordered.