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Shelley v. Tyrone

Supreme Court of Georgia

October 16, 2017


          NAHMIAS, Justice.

         This case arises from a long-running battle that appellant Richard Shelley has been waging against the Town of Tyrone's zoning ordinances. Because Shelley failed to exhaust his administrative remedies before seeking relief in the trial court, his as-applied challenges to the zoning ordinances are not ripe for judicial review. We therefore affirm the superior court's order granting Tyrone partial summary judgment on those claims. And because the town has enacted a new zoning ordinance, Shelley's facial challenges to the previous ordinances are moot. We therefore vacate the superior court's order addressing the merits of those claims and remand the case with direction to dismiss those claims unless Shelley properly amends his complaint to challenge the ordinance now in effect.

         1. Viewing the evidence in the light most favorable to Shelley as the party opposing summary judgment, see Cowart v. Widener, 287 Ga. 622, 624 (697 S.E.2d 779) (2010), the record shows the following. In 1999, Shelley purchased commercial property with four rental units on Senoia Road in Tyrone.[1] In 2003, he purchased another commercial property in Tyrone, this one with eight rental units and located on Palmetto Road. Both properties include industrial-type buildings with high ceilings, limited parking, limited storefront, and truck docks. At the time of each purchase, the properties were zoned C-2 commercial district, but according to Shelley the properties had preexisiting tenants with grandfathered nonconforming uses, meaning the right to use the properties in those ways was allegedly vested at the time Tyrone adopted zoning restrictions removing them as permitted or conditional uses.

         C-2 was the middle commercial zoning designation. It replaced C-H (commercial highway district) in 1989 but kept the same primary uses. A new zoning ordinance was passed in 1997; it is unclear if that ordinance made any changes to C-2. The tenants when Shelley bought the properties included an automobile repair and sales shop, a landscaper, and a furniture upholsterer. It appears that at least these three were permitted uses under C-2 at the time of Shelley's purchases.

         In 2004, Tyrone amended its zoning ordinance and eliminated some of the permitted uses under C-2. The deleted uses included some that Shelley had on his property at least at some point, including major automobile repair, automobile dealer, landscaping, and furniture upholstery. Shelley sent several letters to Tyrone alleging that this amendment deprived him of all economically feasible uses of his properties and requesting that the town either restore a number of uses that had been deleted or pay him almost $2 million to make up for lost rents. The town council denied Shelley's requests.

         In 2007, Shelley, representing himself, sued Tyrone in superior court, arguing that the 2004 zoning amendment violated his federal and state due process rights because it eliminated all economically feasible uses of his property and because it was passed without proper notice or investigation. He asked for, among other things, a declaratory judgment that the town's 1989 zoning ordinance was controlling and the 1997 ordinance and 2004 amendment were invalid; injunctive relief preventing the town from refusing to issue legal business use licenses to him; and damages for inverse condemnation. Tyrone removed the case to federal district court on the ground that it involved a federal question.

         On April 6, 2009, the federal court issued an order that summarized the history of the enactment of Tyrone's zoning ordinances and found that the 1997 ordinance was the controlling zoning ordinance for Shelley's case and that Tyrone validly amended that ordinance in 2004. The court then explained that to do business in Tyrone, entities must submit an application for and obtain an Occupation Tax Certificate (OTC). The court held that Shelley's as-applied constitutional challenges to the 2004 amendment were not ripe because he had not applied for an OTC or obtained any final decision from the zoning authority depriving him of a tenant or hindering an existing tenant based on the 2004 amendment. The federal court further held that to the extent Shelley was raising a takings claim, he would have to raise that in state court. The court dismissed these as-applied claims without prejudice.

         The federal court then held that Shelley's facial challenge to the 2004 ordinance amendment on federal due process grounds was ripe but failed because property owners generally do not have due process claims for legislative decisions like that one and to the extent Shelley was entitled to some level of due process, the town council complied with Tyrone's local notice and hearing requirements. Thus, the court dismissed that claim with prejudice and granted Tyrone's motion for partial summary judgment. The federal court declined to exercise supplemental jurisdiction over the remaining state-law claims and closed the case.

         Shelley then hired two attorneys, who reopened the case so the state-law claims could be remanded to the superior court. Following some negotiations, Tyrone's attorney sent a letter to Shelley's attorneys on May 3, 2010, advising that Shelley's "petition for recognition of rights to nonconforming uses and vested rights" was not something that the town could grant. The town attorney noted that he was not aware of any decisions made by Tyrone that failed to recognize any of Shelley's nonconforming uses or vested rights. He promised that the town would not "make any decision which would impact the vested rights of [Shelley], if any" and added, "the Town stands ready to issue appropriate permits to [Shelley] for which he is qualified." On October 21, 2010, the parties filed a mutual dismissal with prejudice of all of Shelley's remaining claims.[2]

         About a year later, in October 2011, Tyrone held two public hearings to discuss proposed Ordinance 2011-13. This ordinance was intended to streamline the 1997 zoning ordinance and consolidate the zoning designations; the town council thought the town was too small for the number of different designations it had. As relevant for Shelley's properties, which had been designated C-2, the 2011 ordinance merged the three commercial designations into two: C-1 (downtown commercial) and C-2 (highway commercial). The ordinance incorporated all of the permitted and conditional uses of the former C-2 into C-1, redesignated all property that was C-2 as C-1, and redesignated all property that was C-3 as C-2. Thus, under Ordinance 2011-13, Shelley's properties would be zoned C-1.[3] The proposed ordinance also allowed legal nonconforming uses to preserve vested rights but said that if a nonconforming use of a property was discontinued and that nonconforming use was not resumed within six months, the property would lose permission for the nonconforming use.

         Shelley attended both October 2011 meetings and personally objected to Ordinance 2011-13 as unconstitutionally restricting his property use. Shelley's attorney also spoke at the first meeting, held on October 6, asserting that it would cost Shelley one to two million dollars to change his buildings to fit the new zoning restrictions. The town attorney asked everyone at the meeting, and Shelley specifically, to name any uses they believed had been covered under the old zoning ordinance but would not be covered under the new one. The ordinance was then tabled until the second meeting, which was held two weeks later. At that meeting, Shelley said that the automobile brokers use had been eliminated in the C-1/C-2 merger. The town council agreed and revised the new ordinance to add it as a conditional use in C-1. Shelley also suggested that the time to preserve a nonconforming use be increased from six months to one year, which the council did. The town council then passed Ordinance 2011-13 with those two amendments.[4]

         In March 28, 2013, Shelley learned that the Tyrone planning commission and zoning administrator had informed a prospective tenant that furniture assembly would not be allowed on Shelley's property because it was not permitted under C-1 zoning and the planning commission "saw no reason to add such a use to the C-1 Zoning District."[5] The furniture assembler therefore rented elsewhere. On September 18, 2013, another prospective tenant decided not to rent from Shelley after she was told by the town clerk and zoning administrator that her plan for a beauty parlor would not be allowed on Shelley's property because the property already had one beauty parlor, and two would overtax the septic system. On September 27, 2013, Shelley sent a letter to Tyrone indicating that he planned to file a lawsuit for inverse condemnation based on the loss of rent from these two potential tenants, claiming he suffered $36, 900 in lost rent due to the town's "illegal denials of permitted land uses in the C-1 District." He also alleged that Tyrone had reneged on the agreement made in the 2010 letter to his attorneys that the town would not do anything to impact his vested rights.

         On March 28, 2014, Shelley filed the lawsuit at issue in this appeal in superior court, asking for a declaratory judgment that the permitted uses of his properties are the same as those permitted in 1977. He alleged that Tyrone's 1977 zoning ordinance governed his properties because that was the ordinance in place when the buildings on his properties were constructed, and thus all uses available then but not now should be grandfathered, nonconforming uses. Shelley also asked for a preliminary and permanent injunction prohibiting Tyrone from denying him any of these uses. He alleged generally that all zoning ordinances passed since 1977 are facially void "because of the[ir] defective adoption and content" and more specifically that Ordinance 2011-13 was void because it was adopted without compliance with Georgia's Zoning Procedures Law (ZPL), see OCGA §§ 36-66-1 to 36-66-6, or the zoning procedures codified in Tyrone's ordinances. Shelley also alleged that Ordinance 2011-13 as well as the 2004 amendment to the 1997 zoning ordinance dramatically limited the uses of his properties, while not promoting the welfare of the town. Finally, he asked for attorney fees and expenses of litigation.

         Shelley later amended his complaint twice, adding an inverse condemnation claim, which alleges that he "has not been paid adequate compensation for the Town of Tyrone's limitations of uses on [his properties]" and requesting damages. In April 2015, Shelley moved for summary judgment on his facial challenges, and in June, Tyrone moved for summary judgment on those challenges as well as the claims regarding the application of the zoning ordinances to Shelley's properties.

         On October 1, 2015, Tyrone enacted a completely new zoning ordinance and zoning map with Ordinance 2015-07. The zoning map was attached to the new ordinance and handed out to the public for its consideration at the advertised public hearing on the ordinance. Based on this development, Tyrone filed a suggestion of partial mootness of this case on November 6, 2015, attaching a certified copy of the new zoning ordinance. Shelley responded, arguing that none of his claims are moot.

         On June 26, 2016, the superior court denied Shelley's motion for summary judgment and granted Tyrone's motion. The court concluded that Shelley's inverse condemnation claim was barred by his failure to provide ante litem notice to the town and noted that Shelley had failed to prove any violation of his vested rights. The court also held that although the only zoning map Tyrone had produced was dated well after the adoption of the 1997 zoning map, which was the map Ordinance 2011-13 amended, there was in fact an official map in 1997.[6]The court said that there is no precedent requiring a zoning map to be amended at the same time as the zoning ordinance text. The court next concluded that Tyrone did not violate the ZPL when enacting Ordinance 2011-13 and that the town was not required to follow the town-created procedures because they were preempted by the ZPL. Finally, ...

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