Chamberlain, L.l.c. Vs. City Of Ames, Iowa And Ames Board Of Appeals ( 2008 )

IN THE SUPREME COURT OF IOWA
No. 06–1487
Filed November 21, 2008
CHAMBERLAIN, L.L.C.,
Appellant,
vs.
CITY OF AMES, IOWA and
AMES BOARD OF APPEALS,
Appellees.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Story County, Dale E.
Ruigh, Judge.
Appellant challenges summary judgment dismissal of its suit
challenging the denial of an occupancy permit. DECISION OF COURT
OF APPEALS AND JUDGMENT OF DISTRICT COURT AFFIRMED.
John F. Lorentzen and John T. Clendenin of Nyemaster, Goode,
West, Hansell & O’Brien, Des Moines, for appellant.
William A. Wickett and Jason W. Miller of Patterson Law Firm,
L.L.P., Des Moines, and Jason C. Palmer and Andrew C. Johnson of
Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellees.
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STREIT, Justice.
An Ames developer planned to build an apartment complex with
loft space that could be used for sleeping or storage. Uncertain whether
the lofts were permissible under the Ames Municipal Code, the developer
requested an interpretation of the code from the city’s building official,
who concluded the lofts were permissible. When the building was
completed, the city denied the developer’s application for a certificate of
occupancy because it found the lofts violated the ceiling height
requirements for habitable space. The developer appealed to the city’s
board of appeals which upheld the denial of certification. The developer
then filed actions in the district court on this issue as well as asserting
recovery on the basis of promissory estoppel, equitable estoppel, and
vested rights. The district court and court of appeals rejected all claims
on summary judgment dismissal. On further review, the developer
maintains issue preclusion bars the city from essentially withdrawing the
building official’s interpretation of the code. Because the interpretation
was not a final decision, it is not entitled to preclusive effect. Further,
because the building official’s interpretation was contrary to the building
code, the developer did not acquire vested rights in the interpretation.
We affirm the decision of the court of appeals and the judgment of the
district court.
I. Facts and Prior Proceedings.
The owners of Chamberlain, L.L.C. planned to build a four-story
mixed-use complex near the Iowa State campus. The first floor would
contain retail space, and the upper floors would contain apartment
units. The design for some of the apartments included a loft or shelf
area that could be used as sleeping or storage space. The lofts provided
184 square feet of surface area, forty-five inches from the ceiling, and
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were accessible by stair-ladders. The lofts had electrical outlets, data
ports for internet access, lighting (and light switches), and carpeting.
Since Chamberlain was uncertain whether the loft-shelf areas would
comply with the city’s building code requirements, it sought approval
from the Ames building official before proceeding with the project.
In August or September 2003, two Chamberlain representatives
and the company’s architectural consultant met with the Ames building
official and the Ames fire inspector. While the parties dispute whether
actual design drawings with dimensions were reviewed during the
meeting, all agree the topic of the meeting centered on whether the loft
areas would be acceptable under the building and fire codes. The fire
inspector expressed concern that additional protections would be needed
if the spaces would be used for sleeping. The building official then
sought input on the design at a staff meeting of city building inspectors.
The building official called Chamberlain and indicated the lofts
were permissible so long as Chamberlain installed smoke detectors and
sprinklers above and below the lofts. The building official interpreted the
loft areas to be extensions of other code-compliant rooms, thus excluded
from ceiling height restrictions. He believed this interpretation was
consistent with the building code’s intent and purpose. Chamberlain
continued to develop the concept, and the city issued a building permit
in January 2004 after reviewing Chamberlain’s phased project plans.
Chamberlain built the structure and secured tenants for the units.
When the building was nearly complete, the Ames fire chief/acting
building official1 stated in a letter that the loft areas did “not meet
minimum height requirements for habitable space” and a certificate of
1The building official who provided Chamberlain with his interpretation of the
code no longer worked for the city.
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occupancy would not be issued unless significant modifications were
made to the apartments. A memo from the fire chief to the city manager
stated inspectors began noticing that the loft areas would be treated as
living space in May 2004, and some tenants and parents of tenants had
complained to the city due to concerns about the reduced height in the
loft areas.
Chamberlain appealed the fire chief’s determination to the city’s
board of appeals. The board found the fire chief’s interpretation “not
unreasonable” and determined the certificate of occupancy was properly
withheld. The city issued a certificate of occupancy only after
Chamberlain barricaded the loft areas to prevent their use.
Chamberlain filed two actions in district court. First, it filed a
petition for writ of certiorari seeking a declaration that Chamberlain was
illegally denied a certificate of occupancy when it justifiably relied on a
valid code interpretation made by an authorized building official. A
second petition was filed in equity, contending the city was prevented
from applying a new interpretation of the building code through the
doctrines of equitable estoppel, vested rights, or promissory estoppel.
The cases were consolidated, and both parties moved for summary
judgment.2 The district court held there were no false representations or
exceptional circumstances to support an equitable estoppel claim, and
Chamberlain’s promissory estoppel claim failed because there was no
“clear and definite promise” to enforce the interpretation as to the lofts.
Further, the court determined Chamberlain did not have vested rights in
the building permit because the building did not comply with the
building code. Lastly, the court rejected Chamberlain’s claim the original
2The district court did not issue a ruling with regard to the petition for writ of
certiorari, and therefore, it is not before us.
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building official’s determination prevented a new interpretation by the
board of appeals through issue preclusion. Chamberlain appealed each
of these conclusions.
We transferred the case to the court of appeals, which affirmed the
district court’s decision in its entirety. Chamberlain sought further
review, claiming the building official’s initial determination of the
building code was an adjudication entitled to preclusive effect. We
granted further review.
II. Scope of Review.
A ruling on a motion for summary judgment is reviewed for
correction of errors at law. City of Johnston v. Christenson, 718 N.W.2d
290, 296 (Iowa 2006). Summary judgment is properly granted
if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of
law.
Iowa R. Civ. P. 1.981(3). We examine the facts “in the light most
favorable to the party opposing the motion for summary judgment.”
Richardson v. The Commodore, Inc., 599 N.W.2d 693, 696 (Iowa 1999).
When presented with an application for further review from the
court of appeals, we may consider “all of the issues properly preserved
and raised in the original briefs.” Bokhoven v. Klinker, 474 N.W.2d 553,
557 (Iowa 1991). “[W]e may review any or all of the issues initially raised
on appeal . . . whether or not they are specifically brought to our
attention in the applications for further review.” Id.
III. Merits.
Although Chamberlain did not raise the issue of vested rights in
the application for further review, we have decided to review the court of
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appeals decision on vested rights in addition to the preclusion issue
raised on further review. Id.
A. Issue preclusion. Today we decide whether the building
official’s initial interpretation of the building code vis-à-vis the lofts is
entitled to preclusive effect. Issue preclusion means “that when an issue
. . . has once been determined by a valid and final judgment, that issue
cannot again be litigated between the same parties in any future
lawsuit.” Christenson, 718 N.W.2d at 297 (citations omitted). A party
asserting issue preclusion must establish the following:
(1) the issue concluded must be identical, (2) the issue must
have been raised and litigated in the prior action, (3) the
issue must have been material and relevant to the
disposition of the prior action, and (4) the determination . . .
in the prior action must have been necessary and essential
to the resulting judgment.
Iowa Elec. Light & Power Co. v. Lagle, 430 N.W.2d 393, 397 (Iowa 1988)
(quoting Hunter v. City of Des Moines, 300 N.W.2d 121, 123 (Iowa 1981)).
An agency determination may be entitled to preclusive effect if the parties
had a full and fair opportunity to litigate the issue and if the
determination was considered final. Id. at 397–98 (citing the
Restatement (Second) of Judgments § 83 (1982)).
The building official’s interpretation of the code was not entitled to
preclusive effect because the interpretation was not a final decision.
Chamberlain argues the city was required to file a writ of certiorari if it
disagreed with the building official’s interpretation. Because the time for
filing a writ of certiorari has long since passed, Chamberlain claims the
city acted illegally when it refused to issue a certificate of occupancy. We
disagree.
The fact that the city failed to file a writ of certiorari challenging
the building official’s interpretation does not make the building official’s
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decision “final.” Both the International Building Code, adopted by the
City of Ames, and the Ames Municipal Code contain provisions
confirming the conditional nature of the building official’s interpretation.
Int’l Bldg. Code §§ 104.1, 105.4 (2003); Ames, Iowa, Mun. Code §§
5.106(4), (5), 5.131(1), (2) (2003). Section 104.1 of the International
Building Code grants the building official the authority to give
interpretations of the code:
The building official is hereby authorized and directed
to enforce the provisions of this code. The building official
shall have the authority to render interpretations of this code
and to adopt policies and procedures in order to clarify the
application of its provisions. Such interpretations, policies
and procedures shall be in compliance with the intent and
purpose of this code. Such policies and procedures shall not
have the effect of waiving requirements specifically provided
for in this code.
Int’l Bldg. Code § 104.1 (emphasis added). Thus, although the building
official is empowered to provide interpretations of the code, he is
restricted from being able to make interpretations that directly contradict
or ignore the plain provisions of the code.
The Ames Municipal Code also indicates that the building official’s
interpretations cannot be considered final adjudications by which the
building official and the city will forever be bound unless the city files a
timely writ-of-certiorari action. Regardless of prior interpretations, the
building official can deny a building permit application if the plans do
not conform “to the requirements of the Code and other pertinent laws
and ordinances.” Ames, Iowa, Mun. Code § 5.106(4). Moreover, even
after an interpretation has been made and/or a building permit has been
issued, the Ames Municipal Code provides:
The issuance of a permit or approval of plans and
specifications shall not be construed to be a permit for or
approval of any violation of any of the provisions of this
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Code. No permit appearing to give authority to violate or
cancel the provisions of this Code shall be valid. . . . The
issuance of a permit based upon plans and specifications
shall not prevent the Building Official from thereafter
requiring the correction of errors in said plans and
specifications or from preventing building operations being
carried on thereunder when in violation of this Code or of
any other ordinance of the City.
Id. § 5.106(5); accord Int’l Bldg. Code § 105.4. Finally, even after the
certificate of occupancy has been granted, various officials are
empowered, regardless of prior interpretations, to initiate abatement
action against a building if it is “manifestly unsafe” or violates any code,
ordinance, or regulation. Ames, Iowa, Mun. Code § 5.131(1), (2); Int’l
Bldg. Code § 110.4.
These provisions demonstrate an interpretation of the code by the
building official is not an adjudication of rights unalterable by the city.
The city is empowered to deny an occupancy permit based on safety
concerns or when the building does not comply with the provisions of the
code. Ames, Iowa, Mun. Code § 5.106(5); Int’l Bldg. Code § 105.4. In our
case, the fire chief/acting building official determined the lofts were both
unsafe and in violation of the building code. Int’l Bldg. Code § 1208.2.
The lofts had only forty-five inches of headroom, and the building code
requires seven and one-half feet for habitable spaces. Id. Even though
the building official interpreted the loft areas to be extensions of other
code compliant rooms, thus excluded from ceiling height restrictions,
such an interpretation directly contradicts the plain provisions of the
code. The loft areas were the size of a standard bedroom (148 square
feet), and considering a space of that size to be an extension of another
room seems illogical and plainly contrary to the code requirements. See
Int’l Bldg. Code § 1208.3.
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If a prior interpretation is later altered, the building owner has the
right to a hearing in front of the board of appeals and afterwards judicial
review. Int’l Bldg. Code § 112. Chamberlain exhausted these remedies
when it appealed the city’s interpretation that the lofts violated the
ceiling height restrictions of the code and lost. The building official’s
initial interpretation of the code was not a final decision, and therefore,
we hold it is not entitled to preclusive effect.
B. Vested Rights. A building official’s interpretation of the
building code may be binding in certain instances under the doctrine of
vested rights. Generally, a city is not estopped from revoking a validly
issued building permit. B & H Invs., Inc. v. City of Coralville, 209 N.W.2d
115, 118 (Iowa 1973). However, when the permit holder makes
expenditures in reliance on the permit, he may acquire vested rights in
that permit, and the city may be estopped from revoking the permit. Id.;
see also City of Lamoni v. Livingston, 392 N.W.2d 506, 510 (Iowa 1986).
But, if the permit was not validly issued or if the building does not
comply with applicable requirements, a permit can be revoked
notwithstanding the permit holder’s reliance. City of New Hampton v.
Blayne-Martin Corp., 594 N.W.2d 40, 44–45 (Iowa 1999).
As the building official has statutory authority to provide
interpretations that are consistent with the code, an interpretation by the
building official is akin to a building permit for the purposes of a vested
rights analysis. Thus, so long as the interpretation does not contradict
the plain provisions of the building code, an individual may acquire
vested rights in that interpretation if he or she made expenditures in
reliance on the interpretation. When the building official’s interpretation
resolves some kind of ambiguity or interprets an indefinite provision of
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the building code, a party can enforce that interpretation under the
theory of vested rights.
In this case, however, the lofts, measuring 148 square feet (the size
of a standard room) with forty-five inches of headroom, did not comply
with the building code, which requires a ceiling height of seven and one-
half feet for all habitable spaces. Int’l Bldg. Code § 1208.2. Although the
building code does permit the building official to approve alternate
designs, these designs must comply with the intent of the code and meet
applicable safety requirements. Id. § 104.11. Thus, even though
Chamberlain made substantial expenditures in reliance on the building
inspector’s interpretation and the building permit, Chamberlain did not
acquire vested rights to an occupancy certificate since the lofts violated
the plain provisions of the code.
VI. Conclusion.
Because the building official’s interpretation of the code with
respect to the lofts was not a final decision, Chamberlain is not entitled
to utilize the doctrine of issue preclusion. Further, as the lofts do not
comply with the building code, Chamberlain did not acquire vested rights
in the building official’s interpretation. Therefore, we affirm the decision
of the court of appeals and the judgment of the district court.
DECISION OF COURT OF APPEALS AND JUDGMENT OF
DISTRICT COURT AFFIRMED.
All justices concur except Baker, J., who takes no part.