OHIO SUPREME COURT RULES THAT A TENANT’S ABANDONMENT OF NONCONFORMING USE CANNOT CONSTITUTIONALLY BE IMPUTED TO MOBILE-HOME PARK’S OWNER

The Supreme Court of Ohio recently ruled, in State ex rel. Sunset Estate Properties, L.L.C., v. Lodi, Slip Opinion No. 2015-Ohio-790, that a portion of the Village of Lodi’s zoning code (dealing with abandonment of nonconforming mobile home use) is unconstitutional on its face. 

The facts in this case are simple enough (the law is another matter).  Basically, the appellees, Sunset Properties, L.L.C., and Meadowview Village, Inc., each own property in Lodi on which they operate mobile-home parks. Both properties are in areas currently zoned in districts that do not permit mobile-home parks, however, the mobile-home parks are deemed legal nonconforming uses (under Ohio Revised Code Section 713.15) because such uses existed prior to the passage of the Village’s zoning ordinance. In other words, they are (what is commonly known as) “grandfathered.”

In 1987, the Village of Lodi (the appellant in the Ohio Supreme Court case) passed an ordinance (Lodi Zoning Code 1280.05(a)) regarding abandonment of nonconforming uses.  Generally, the ordinance contained two parts. The first provided a general time frame for deemed abandonment: when a nonconforming use has been discontinued for six months or more. The second part was specific to mobile homes. This provision stated that the absence or removal of a mobile home from its lot constitutes discontinuance from the time of removal. In reliance on this provision, when a tenant left one of appellees’ mobile-home-park lots and the lot was vacant for longer than six months, Lodi would refuse to reconnect water and electrical service when a new tenant wanted to rent the lot.  As a result, appellees were not able to re-rent these lots and claimed they lost a property right due to the corresponding loss of use/income.

As a result of the Village of Lodi’s actions, the appellees filed suit, and requested, among other things, a declaration from the trial court that the ordinance is unconstitutional and constitutes a taking of their properties. The trial court granted summary judgment in favor of Lodi on all counts. The mobile-home park owners appealed, asserting that the trial court erred in granting summary judgment in favor of Lodi.  The Ninth District Court of Appeals agreed with the park owners and reversed the trial court’s judgment, holding that Lodi’s zoning ordinance was unconstitutional on its face. The Village of Lodi then appealed to the Ohio Supreme Court, who affirmed the Ninth District’s judgment.

Before rationalizing its holding, the Ohio Supreme Court in Sunset Estates first reminds us that “[t]his court has consistently approved the constitutionality of comprehensive zoning ordinances.” The court cited several cases where the court held zoning to be a valid legislative function of a municipality’s police powers and that a strong presumption exists in favor of the validity of such zoning ordinances. Since the specific ordinance being reviewed in Sunset Estates dealt with abandonment of non-conforming uses, the court then cited cases establishing that Ohio courts “have upheld both the denial of the right to resume a nonconforming use after a period of nonuse, and the denial of the right to substitute new buildings for those devoted to an existing nonconforming use and to add or extend such buildings.” In fact, according to the court, nonconforming uses may be regulated “to the point that they wither and die”, and still pass constitutional muster. However, as the court in Sunset Estates clarified, “the authority of state and local governments to regulate land use is vast but not unbounded.”

The boundaries, according to the Ohio Supreme Court are established in Section 1, Article XIV, Amendments, United States Constitution, and Section 16, Article I of the Ohio Constitution, providing that no person shall be deprived of life, liberty or property without due process of law. And, as the court previously reasoned in Akron v. Chapman, 160 Ohio St. 382, 385 (1953), “property” contemplates not only ownership and possession, but “the substantial right of unrestricted use, enjoyment, and disposal.” Consequently, the court in Sunset Estates reasoned that in order for a nonconforming use to be extinguished, the use must be voluntarily abandoned, not taken away. Non-conforming uses cannot be regulated by an ordinance that deprives a property owner of a vested property right.

Constitutionally speaking, the court held that the deprivation of the vested private-property rights of mobile-home-park owners was not rationally  related  to  Lodi’s legitimate  goals  of  protecting  property  values  and encouraging  development. Factually disturbing to the court was the fact that the plain language of the (last sentence of the) Village of Lodi’s ordinance imputed a tenant’s abandonment of one lot within a mobile-home park on the park’s owner.  In so doing, “the provision impermissibly deprives the owner of the park of the right to continue the use of its entire property in a manner that was lawful prior to the establishment of the zoning ordinance.” In other words, the vacation of a mobile park tenant from its pad is not (and should not be deemed) according to the court, a voluntary abandonment of the non-conforming use by the mobile park owner.

The court did clarify that it had no problem with ordinances that provide that a nonconforming use shall not be re-established at the end of a certain period of abandonment. In fact, the Ohio Revised Code has a general provision addressing nonconforming land use (O.R.C. Section 713.15). The court also had no problem with Lodi’s Zoning Code…except for the final sentence.  

The last sentence of Lodi Zoning Code 1280.05(a) rendered the ordinance “arbitrary” and irrational” (according to the court) because the Lodi ordinance does not distinguish “abandonment” or “discontinuance” for any type of nonconforming use other than relative to mobile homes. In other words, while all other property owners and businesses must voluntarily abandon the nonconforming use of the property, mobile home parks alone can be forced into involuntary abandonment simply by a mobile home being removed  (i.e., a structure that is designed to be moved) from a lot.

State ex rel. Sunset Estate Properties, L.L.C., v. Lodi is not without controversy. Two dissenting judges and others are not happy with the court’s decision, because they believe the majority was “trigger happy” in pushing the “unconstitutional button.”According to the dissenting judges, “the court of appeals failed to exercise judicial restraint in deciding this case on constitutional grounds without first fully addressing nonconstitutional issues that could have been resolved.” Citing prior case law, the dissent noted that the Ohio Supreme Court does not reach constitutional issues unless absolutely necessary… and that “courts should exercise judicial restraint and determine whether a case can be resolved based on non-constitutional issues before considering constitutional issues.”

In fact, the original complaint raised two, non-constitutionally based issues: 1) the Lodi Zoning Code 1280.05(a) conflicts with state law; and 2) there is an issue of interpretation, namely as to whether or not Lodi Zoning Code 1280.05(a) authorized Lodi to extinguish the nonconforming use of the properties in question, lot by lot.

     Even though the dissenting judges commented that the 9^th District Court of Appeals failed to review these non-constitutional issues, they declined to review them as well. Perhaps there is merit to these claims. ORC 713.15 does use the term “voluntarily discontinued” while Lodi Zoning Code 1280.05(a) states that absence or removal of a mobile home “shall constitute discontinuance”.  Conflicting provisions? Maybe. Could the court have resolved this case based upon the interpretation of vs. the constitutionality of Lodi’s Zoning Code 1280.05(a)? Perhaps. In any event, at least mobile home park operators in Ohio are smiling in the wake of State ex rel. Sunset Estate Properties, L.L.C., v. Lodi.

Ohio Supreme Court Decides in Favor of Beck Energy; Local Drilling Ordinances Not a Valid Exercise of Home Rule

The Ohio Supreme Court decided a critical case in February affecting the state’s oil and gas drilling industry when it issued its decision in State ex rel. Morrison v. Beck Energy Corp (Slip Opinion No. 2015-Ohio-485) on February 17, 2015.

 

Beck Energy Corporation (“Beck Energy”) obtained a state permit to drill an oil and gas well on private property in the city of Munroe Falls (the “City”), located in Summit County.  The City attempted to block Beck Energy from drilling the well despite its state permit based on its own ordinances. The permit  was issued to Beck Energy by the Ohio Department of Natural Resources (“ODNR”) under O.R.C. 1509.02.  It contained 67 separate conditions, including many that addressed issues related to site preparation, pit construction and waste disposal, along with many others that govern “Urbanized Areas,” such as noise mitigation, erosion control, tree trimming and parking. Beck Energy, as an applicant for a drilling permit, was also required to provide notices to each owner within 500 feet of the well’s surface location, as well as to the municipality where the well was to be drilled.

 

The City issued a stop-work order and sought an injunction against Beck Energy alleging that the company was violating the City’s ordinances. The appeal to the Ohio Supreme Court involved 5 of these ordinances; including a general zoning ordinance and 4 ordinances that specifically relate to oil and gas drilling. Violations of these drilling ordinances constitute misdemeanors and could result in jail time and fines, with each day of the violation being a separate offense.

 

Beck Energy opposed the City’s injunction request which was granted by the trial court but overturned by the court of appeals.  The City appeals to the Ohio Supreme Court who addressed the question as to whether the City’s ordinances represented a valid exercise of its home-rule power.

 

The home rule amendment to Ohio’s constitution gives municipalities the “broadest possible powers of self-government in connection with all matters which are strictly local and do not impinge upon matters which are of a state-wide nature or interest.” (State ex rel. Hackley v. Edmonds, 150 Ohio St. 203, 212, 80 N.E.2d 769 (1948))  However, a municipality is not allowed to exercise its police powers in a manner that conflicts with general laws. In those instances, it must yield to the state’s law.

 

In reaching its decision that the City’s ordinances must yield to O.R.C. 1509.02, the Ohio Supreme Court followed a 3 step analysis: (1) is the ordinance an exercise of the police power rather than of local self-government, (2) the statute is a general law, and (3) the ordinance is in conflict with the statute.

 

In this case, the City did not dispute that its ordinance involved the exercise of police power rather than local self-government. The court then found that O.R.C. 1509.02 is a general law as it (1) is part of a statewide comprehensive legislative enactment, (2) applies to all parts of the state alike and operates uniformly throughout the state, (3) sets forth policy, sanitary or similar regulations, and (4) prescribes a rule of conduct upon citizens generally. The court noted that just because a state statute will have more impact in one geographic section of the state over others does not prevent it from being a ‘general law’.

 

Finally, the court found that the City’s ordinances conflict with the state’s statute. An ordinance conflicts with a state statute when it permits or licenses that which the statute forbids and prohibits, and vice versa. In this case, the City’s ordinances prohibited a permit that was lawfully issued by the state under O.R.C. 1509.02 and attempts to provide for double licensing which is not permitted under the state statute.

 

Finding a balance between home-rule authority and state regulatory authority is difficult, even without the added controversy of fracking. Under the circumstances, it comes as no surprise that the Ohio Supreme Court’s decision in favor of Beck Energy was issued by a divided (4-3) court. It will be interesting to see what transpires in the future on this subject.

__________________