Weidman vs. City of Lebanon Zoning Board No. 2014-02004

Civil Action-Law-Zoning-Request for a Variance to Continue Non-Permitted Use of Property-Appeal of Decision of Zoning Hearing Board-Trial Court Standard of Review-Variance-Variance by Estoppel-Prohibited Use of Property for Extended Period of Time-Knowledge of the Municipal Authority-Good Faith of the Landowner

1. A landowner seeking to sell his property including a building that he converted from a storage shed to apartments in 1984 without obtaining a zoning permit was denied a Buyer Notification Certificate by the City of Lebanon when he sought to sell the property based upon the landowner’s failure to obtain the zoning permit to convert the storage shed into apartments in 1984. The landowner appealed to the City of Lebanon Zoning Hearing Board requesting a variance to continue the current use of the property with the apartments, which request was denied by the Zoning Hearing Board. The landowner appealed the decision to the Court.

2. A trial court may receive additional evidence when an appeal from zoning hearing board is lodged. If the trial court receives additional factual evidence, the trial court’s scope of review is plenary, and the trial court must make a decision de novo. If the trial court receives no additional evidence, the trial court must review the zoning hearing board’s decision and determine whether there was an abuse of discretion or an error of law and must defer credibility decisions to the zoning hearing board, which was present to hear witnesses and examine their demeanor.

3. The party soliciting a variance has the burden of proving the following elements by substantial evidence: (1) unique physical characteristics of the property, not just the operation of the zoning ordinance, create unnecessary hardship; (2) these characteristics mean the property cannot be developed in conformity with the provisions of the ordinance such that a variance is needed to enable reasonable use of the property; (3) the applicant has not created the hardship; (4) the variance will not alter the character of the neighborhood or adversely affect future development of the adjacent property; and (5) the variance is the minimum necessary to afford relief and requires the least possible modification of the regulation at issue.

4. Variance by estoppel, while sparingly applied, may be applied when a party makes use of a property contrary to applicable zoning ordinances for a long period of time without objection by municipal authorities. A party seeking a variance by estoppel must show: (1) a long period of municipal failure to enforce the law or some form of acquiescence to the use; (2) the landowner acted in good faith and relied innocently on the validity of the use; (3) the landowner made substantial expenditures in reliance upon his belief that the use was permitted; and (4) the denial of the variance would impose an unnecessary hardship on the applicant.

5. The Court held that landowner failed to sustain his burden of establishing entitlement to a variance, most significantly because he created the situation himself by converting the storage shed to apartments without obtaining a zoning permit.

6. However, the Court held that the landowner established entitlement to a variance by estoppel, as the record established that the landowner used the property as apartments since 1984, the landowner purchased annual licenses for the apartments that were required by a City of Lebanon Ordinance since 2007, the landowner acted in good faith in complying with the rules as he perceived them to exist, the landowner recently expended funds to make repairs to the apartments in anticipation of the continued ability to rent the apartments and the selling price of the property would be significantly less without the apartments.

7. The Court granted the appeal, vacated the decision of the Zoning Hearing Board and directed the City to issue a Buyer’s Notification Certificate to the landowner.

L.C.C.C.P. No 2014-02004, May 8, 2015.

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

CIVIL ACTION – LAW NO. 2014-02004

RONALD G. WEIDMAN, SR., Appellant

v.

CITY OF LEBANON ZONING HEARING BOARD, Appellee

ORDER OF COURT

AND NOW, to wit, this 8^th day of May, 2015, in accordance with the attached Opinion, the appeal from the decision of the Lebanon City Zoning Hearing Board pertaining to the property located at 476 North Fifth Street in the City of Lebanon is GRANTED and the Zoning Hearing Board’s decision is VACATED. The Zoning Hearing Board is ordered to issue a Buyer’s Notification certificate to Ronald G. Weidman, Sr.

BY THE COURT,

BRADFORD H. CHARLES, J.

APPEARANCES:

George Christianson, Esquire For Ronald G. Weidman, Sr.

CHRISTIANSON MEYER

Keith L. Kilgore, Esquire For City of Lebanon Zoning

SPITLER, KILGORE & ENCK, P.C. Hearing Board

Opinion, Charles, J., May 8, 2015

This case concerns the retroactive application of zoning standards that were not historically enforced. Where the prior actions of an administrative body have tacitly endorsed failure to comply with the strictures of a zoning ordinance, we will not permit that body to subsequently enforce that ordinance. For these reasons and others that we will articulate herein, we will vacate the City of Lebanon Zoning Hearing Board’s (hereafter “BOARD”) refusal to grant APPELLANT a Buyer Notification Certificate (hereafter “BNC”).

I. FACTS

In November of 1983, APPELLANT entered into a long-term agreement of sale to purchase the property located at 476 North Fifth Street. Title was conveyed on January 12, 1987. The property was .07 acres, zoned residential high density and improved with a two-unit, multi-family dwelling. On August 1, 1983, the prior owner obtained a building permit to construct a 40’ by 24’ cement block storage building on an existing pad at the rear of the property. On that pad, there had previously been a building that had served as an upholstery shop before it was demolished. There were electric, water and sewage lines running to the pad.

In 1984, APPELLANT completed the construction of the new building, which he rented out as an apartment. It has been used as an apartment ever since. When Lebanon enacted its Retail Licensing Ordinance in 2007, APPELLANT registered for a license for three units and has paid the yearly rental fee of $40.00 per unit since then. His license expired on March 31, 2015.

Because APPELLANT is 75 years old, he is no longer interested in leasing the property and wants to sell it. He applied for a Buyer Notification Certificate (hereafter “BNC”). The city noticed that there were three apartments on the property and denied the application. APPELLANT filed a Petition for Appeal before the BOARD, seeking a variance to be able to continue the current use of the property. There was a hearing on October 15, 2014, at which the BOARD denied APPELLANT’s request. APPELLANT filed an appeal on November 13, 2014; this issue is before us today.

II. SCOPE OF REVIEW

When a zoning appeal is filed, a trial court may receive additional evidence via a hearing. If the court receives additional factual evidence, the court’s scope of review is plenary and a de novo decision must be made. Berryman v. Wyoming Borough Zoning Hearing Bd., 884 A.2d 386 (Pa.Cmwlth. 2005). However, where a reviewing court has taken no additional evidence in a zoning case, it must review the zoning board’s decision only to see if it abused its discretion or committed an error of law. Swemly v. Zoning Hearing Bd. of Windsor Twp., 698 A.2d 160 (Pa.Cmwlth. 1997); Kurtis Investment v. Zoning Hearing Bd. of West Mifflin, 592 A.2d 813 (Pa.Cmwlth. 1991). An abuse of discretion occurs when the findings of the zoning board are not supported by substantial evidence. Tinicum Township v. Nowicki, 99 A.2d 586 (Pa.Cmwlth. 2014). “Substantial evidence” has been described as information that a reasonable person would view as “adequate to support a conclusion.” Sweeny v. Zoning Hearing Bd. of Lower Merion Twp., 626 A.2d 1147 (Pa. 1993).

When examining the record, a trial court may not substitute its interpretation of the evidence for that of the zoning board. Vanguard Cellular System v. Zoning Hearing Bd. of Smithfield Twp., 568 A.2d 703 (Pa.Cmwlth. 1989). Credibility decisions must be deferred to the board because the board was present to hear witnesses and examine their demeanor. Hawk v. City of Pittsburgh Zoning Bd., 38 A.3d 1061 (Pa.Cmwlth. 2012); In Re: Richboro CD Partners, 89 A.3d 472 (Pa.Cmwlth. 2014).

In this case, we did not receive additional factual testimony or evidence. Accordingly, we will not undertake a de novo review of the above-referenced case. Rather, we will evaluate the BOARD’s decision with the goal of determining whether the BOARD abused its discretion.

III. DISCUSSION

The BOARD points out that whenever a structure is changed, the owner must obtain a zoning permit. Codified Ordinances of Lebanon §§ 1305.02 & .03. APPELLANT did not do so when he converted the storage garage to an apartment. The BOARD argues that APPELLANT’s use of the rear pad as a third apartment was never permissible. Because APPELLANT created his own dilemma, the BOARD asks us to affirm its denial of a variance.

In response, APPELLANT points out that he has been consistently using the rear outbuilding as an apartment for 31 years without objection by the City. Moreover, APPELLANT emphasizes that he never hid the use of the rear building from the City. In fact, he paid rental fees to the City for the rear building since 2007.

A traditional variance allows for departure from a strict application of the zoning code when literal enforcement would result in unnecessary hardship and where the deviation would not harm the public. Broussard v. Zoning Bd. of Adjustment of City of Pittsburgh, 907 A.2d 494 (Pa. 2006); 53 P.S. § 10910.2(a). The reasons for a variance must be substantial, serious and compelling, and variances are to be granted sparingly and only under exceptional circumstances. Nowicki v. Zoning Hearing Bd. of Borough of Monaca, 91 A. 3d 287 (Pa.Cmwlth. 2014). The party soliciting a variance has the burden to prove the following elements by substantial evidence:

(1) Unique physical properties of the property, not just the operating of the zoning ordinance, create unnecessary hardship;

(2) These characteristics mean the property cannot be developed in conformity with the provisions of the ordinance, so that a variance is needed to enable reasonable use;

(3) The applicant has not created the hardship;

(4) The variance will not alter the character of the neighborhood or adversely affect future development of adjacent property; and

(5) The variance is the minimum necessary to afford relief and will require the least possible modification of the regulation at issue.

Tri-County Landfill, Inc., v. Pine Twp. Zoning Hearing Bd., 83 A.3d 488 (Pa.Cmwlth. 2014). The BOARD correctly concludes that APPELLANT cannot sustain the heavy burden to qualify for a variance, most significantly because he created the situation himself.

Variance by estoppel, though sparingly applied, applies when a party uses property contrary to applicable zoning ordinances for a long period of time without objection by municipal authorities. See, e.g., Springfield Twp. v. Kim, 792 A.2d 717 (Pa.Cmwlth. 2002). A party seeking variance by estoppel must show:

(1) A long period of municipal failure to enforce the law, or some form of acquiesce to the unlawful use;

(2) Whether the landowner acted in good faith and relied innocently upon the validity of the use throughout the proceedings.

(3) Whether the landowner has made substantial expenditures in reliance upon his belief that his use was permitted.

(4) Whether the denial of the variance would impose an unnecessary hardship on the applicant, such as the cost to demolish an existing building.

Skarvelis v. Zoning Hearing Board, 679 A.2d 278, 281 (Pa.Cmwlth. 1996).

The concept of variance by estoppel appears tailor-made for this situation. As established infra, APPELLANT purchased annual licenses from the city for each of the three rental units ever since such licenses were required. It was only when he requested a BNC that the city objected to the fact that there were three apartments on the property. As the BOARD points out, the grant of these licenses did not warrant that the units complied with the law. Codified Ordinances of Lebanon § 1907.5(b)(4). However, the BOARD should not be allowed to have accepted APPELLANT’s money for eight years, thereby implicitly condoning the existence of the apartment, and then suddenly decide to revoke its approval. This pattern of behavior very neatly fits the definition of an arbitrary decision, especially considering that APPELLANT has used the building as an apartment for thirty years, the area has always been zoned residential high density and the property is surrounded by other multiple-family dwellings.

It is clear to this Court that APPELLANT has acted in good faith. Not only did he disavow any knowledge that the building was not in compliance and would have done something about it if he had known, (N.T. 21:11-22), but also one of the BOARD members acknowledged that he believed APPELLANT made an “honest mistake.” (N.T. 26:1-4).

The BOARD claims that APPELLANT’s payment of licensure fees, totaling $320.00 for the apartment in question, was not sufficiently substantial to satisfy the third factor in the variance by estoppel test. However, APPELLANT testified that he also recently replaced the roof on the building and bought a new heating system in anticipation of his continued ability to rent out the property as an apartment. (N.T. 22:22-25). Finally, if there are only two apartments that can be rented, the selling price of the property would certainly be significantly less. Though we recognize that mere economic factors do not suffice to show unnecessary hardship, Colonial Park for Mobile Homes, Inc. v. New Britain Borough Zoning Hearing Bd., 290 A.2d 719, 722 (Pa.Cmwlth. 1972), when considered along with the other factors, APELLANT clearly has “expended substantial sums in reliance upon his belief that his use of the rear structure was appropriate.

All of the elements of variance by estoppel apply in this case. In particular, we were impressed by the good faith effort of APPELLANT to comply with the rules as he perceived them to exist. We certainly perceive no effort by APPELLANT to play “fast and loose” with zoning or municipal requirements for his property. In fact, his use of the rear outbuilding as an apartment was consistent, open and licensed. For the City to now prevent such use after APPELLANT expended significant sums to improve/repair the structure would be unfair.

Though the application of variance by estoppel is sufficient by itself to support our ruling, there is another compelling reason to overturn the BOARD’s decision. As APPELLANT points out, thirty years ago, most zoning restrictions were oral and were not nearly as stringent as those in existence today. To impose today’s exacting standards on a decision that was made thirty years ago would be not only unjust, but also irrational. In response to an audience question about parking, one of the zoning officers confirmed that the arrangement was “grandfathered in.” (N.T. 24:10-25:12). There is no reason why the apartment as a whole should not also be “grandfathered in.”

At the conclusion of the hearing, one of the zoning officers stated that it would set a dangerous precedent to grant a variance in this case. (N.T. 25:24-26:4). On the contrary, it would set a dangerous precedent to allow such arbitrary enforcement after years of implicit approval. For the above reasons, we will vacate the BOARD’s decision and order it to issue a BNC to APPELLANT. An Order to accomplish this will be entered today’s date.