Ferguson Creek Investment v. Lane County ( 2024 )

No. 691 October 2, 2024 277
IN THE COURT OF APPEALS OF THE
STATE OF OREGON
FERGUSON CREEK INVESTMENT, LLC,
Respondent,
v.
LANE COUNTY,
Respondent,
and
LANDWATCH LANE COUNTY,
Petitioner.
Land Use Board of Appeals
2023087; A184345
Submitted July 10, 2024.
Sean Malone filed the brief for petitioner.
Zack P. Mittge and Hutchinson Cox filed the brief for
respondent Ferguson Creek Investment, LLC.
No appearance for respondent Lane County.
Before Aoyagi, Presiding Judge, Joyce, Judge, and Balmer,
Senior Judge.
AOYAGI, P. J.
Reversed and remanded.
278 Ferguson Creek Investment v. Lane County
Cite as 335 Or App 277 (2024) 279
AOYAGI, P. J.
Respondent Ferguson Creek Investment, LLC,
applied to Lane County for nonconforming-use verification
for a house (the current dwelling) located on property zoned
for exclusive farm use. The county denied the application.
The county found that, although a farmhouse had lawfully
existed in a similar location in the past, the current house
is a different dwelling, and it concluded that respondent had
therefore failed to show the establishment of a valid non-
conforming use. On appeal, the Land Use Board of Appeals
(LUBA) reversed and remanded. LUBA reasoned that it
was a violation of ORS 215.130(11) for the county to look
back more than 20 years to determine whether the current
house is the same or a different dwelling as the lawfully
built farmhouse. As described below, we agree with peti-
tioner LandWatch Lane County that LUBA misconstrued
the 20-year-look-back provision in ORS 215.130(11) and,
accordingly, reverse and remand.1
FACTS
The county hearing official’s factual findings were
binding on LUBA, unless LUBA found them not to be sup-
ported by substantial evidence, which did not occur. See
ORS 197.835(9)(a)(C) (providing LUBA with authority to
reverse a local government decision if the local government
“[m]ade a decision not supported by substantial evidence in
the whole record”); ORS 197.835 (not otherwise providing
LUBA authority to modify local governments’ factual find-
ings). We are therefore similarly bound by those findings.
See ORS 197.850(8) (“Judicial review of an order issued
under ORS 197.830 to 197.845 must be confined to the
record. The court may not substitute its judgment for that of
the board as to any issue of fact.”). We state the facts accord-
ingly.2 Unless otherwise specified, all quotations are from
the county’s findings.
1
Given our disposition, we do not address petitioner’s other assignment of
error, challenging LUBA’s handling of a preservation issue.
2
The hearings official’s order and opinion incorporated by reference parts of
several other documents. That poses some challenges in ascertaining the hear-
ings official’s precise factual findings, but we have attempted to identify and
state all relevant findings.
280 Ferguson Creek Investment v. Lane County
In the late 1940s, a farmhouse was built on peti-
tioner’s property. It was used as a residence until the late
1970s, and it existed in some form “until 1984, if not 1992.”
Meanwhile, in 1980, for the first time, the county
zoned the property. In LUBA’s view, the farmhouse became
a nonconforming use at that time because, although a
farmhouse was allowed under the 1980 zoning laws, it was
allowed only in conjunction with farm use, making it a reg-
ulated or restricted use.3
In 1985, the property on which the farmhouse stood
was partitioned from a larger parcel. By then, the farm-
house was “no longer fit for occupancy if it was still standing
at all.” No other houses existed on the property.
In 1992, county tax employees physically inspected
the property. They described the only structure, the farm-
house, as an old house “in such a poor state that its assessed
value was limited to its value for material salvage purposes.”
Sometime later, probably between 1998 and 2004,
where the old farmhouse had stood, either “an entirely new
structure” was built, or a “substantial restoration of the
former structure” occurred. (In context, it appears that, by
“substantial restoration,” the county meant building a sim-
ilar house to the old farmhouse, perhaps using some of the
salvage materials identified in 1992, in nearly the same
location.) Either way, none of the required planning and
building approvals were obtained.
Presently, there are two houses on the property.
One is a larger house that was constructed in the late 1990s
or early 2000s, without the necessary permits and approv-
als. The other is a smaller house located in a very similar
but not identical location to where the farmhouse stood.
Both houses have the outward appearance of houses that
could have been built in the 1940s, even though the larger
house is less than 30 years old. The smaller house is the sub-
ject of this proceeding. LUBA referred to it as the “Smaller
3
When, if ever, the farmhouse became a nonconforming use has been a sub-
ject of dispute. We ultimately agree with petitioner that it is irrelevant whether
the farmhouse ever became a nonconforming use, because the current house is a
different dwelling.
Cite as 335 Or App 277 (2024) 281
Dwelling,” and we refer to it as the “current house” or “cur-
rent dwelling.”
Respondent applied to the county for nonconforming-
use verification for the current house in September 2021.
The county denied the application, concluding that respon-
dent had failed to show that the nonconforming use was
lawfully established.4 The county explained that, ordinarily,
when there is evidence that an old house existed in the past
in a place where an old-looking house now exists, it is rea-
sonable to infer that they are the same dwelling. Here, how-
ever, the county viewed the evidence as defeating that infer-
ence. The lawfully built farmhouse was uninhabitable by
1985, “if it was still standing at all,” and had only salvage
value by 1992. Meanwhile, the current house is inhabitable,
it is located in a slightly different place “askew” from where
the farmhouse stood, and the fact that it looks like it could
have been built in the 1940s means little when the same is
true of the larger house that is less than 30 years old. Given
the evidence, the county decided that the current house is
not the same dwelling as the lawfully built farmhouse and
that respondent therefore failed to show that the current
house was established as a valid nonconforming use before
zoning went into effect.
Respondent appealed to LUBA, which reversed the
county’s decision. As described in more detail below, LUBA
concluded that the county had violated ORS 215.130(11)
when it looked back more than 20 years to determine
whether the current house is the same or a different dwell-
ing from the lawfully built farmhouse. See ORS 215.130(11)
(“For purposes of verifying a use under subsection (5) of this
section, a county may not require an applicant for verifica-
tion to prove the existence, continuity, nature and extent of
the use for a period exceeding 20 years immediately preced-
ing the date of application.”).
Petitioner seeks judicial review of LUBA’s order,
arguing that LUBA misconstrued ORS 215.130(11). We
4
The county initially denied the application on a different ground, LUBA
reversed and remanded that decision, and the county then denied the application
on the stated ground. The earlier proceedings are not at issue, so we do not dis-
cuss them.
282 Ferguson Creek Investment v. Lane County
review the order to determine whether it is “unlawful in
substance.” ORS 197.850(9)(a). “A LUBA order is unlawful
in substance if it represented a mistaken interpretation of
the applicable law.” Nicita v. City of Oregon City, 317 Or App
709, 716, 507 P3d 804, rev den, 370 Or 404 (2022) (internal
quotation marks omitted).
THE LAW OF NONCONFORMING USES
Before addressing the specifics of this case, we pro-
vide a brief overview of the law of nonconforming uses, which
allows landowners to continue using property in a way that
would not be allowed under current zoning laws, if the use
lawfully existed when the zoning laws went into effect and
has continued to the present day.
ORS 215.130(5) provides that “[t]he lawful use of
any building, structure or land at the time of the enactment
or amendment of any zoning ordinance or regulation may
be continued.” The use must be continued without inter-
ruption for it to remain lawful. If the use is interrupted or
abandoned, then the right to continue it without comply-
ing with current zoning laws is lost. See ORS 215.130(7)(a)
(“Any use described in subsection (5) of this section may not
be resumed after a period of interruption or abandonment
unless the resumed use conforms with the requirements
of zoning ordinances or regulations applicable at the time
of the proposed resumption.”); see also ORS 215.130(10)(b)
(allowing local governments to establish “criteria to deter-
mine when a use has been interrupted or abandoned under
[ORS 215.130(7)]”).
As a policy matter, however, the legislature has
decided to limit the lookback period for continuous use to
20 years. Under ORS 215.130(11), “[f]or purposes of verify-
ing a use under [ORS 215.130(5)], a county may not require
an applicant for verification to prove the existence, conti-
nuity, nature and extent of the use for a period exceeding
20 years immediately preceding the date of application.” In
other words, if a use was lawfully established, and it has
been continuous for the 20 years immediately preceding the
application date, then the county must recognize it as a law-
ful nonconforming use, regardless of any interruptions in
Cite as 335 Or App 277 (2024) 283
the use that may have occurred more than 20 years in the
past.5
Assessing the lawfulness of a nonconforming use
is thus a two-step process. Aguilar v. Washington County,
201 Or App 640, 648, 120 P3d 514 (2005), rev den, 340 Or
34 (2006). The first question is whether the use was law-
fully established when the relevant zoning laws went into
effect. Id. If so, the second question is whether the use has
been continuous, with ORS 215.130(11) limiting the relevant
period to the 20 years preceding the application date. Id.The petitioners in Aguilar had argued that ORS
215.130(11) required the county to approve a nonconform-
ing use that had been continuous for 20 years, regardless of
whether it was lawfully established when the relevant zon-
ing laws went into effect. Id. at 645. That is, they argued
that the 20-year lookback period in ORS 215.130(11) pre-
cluded the county from looking back more than 20 years to
determine the lawful establishment of the nonconforming
use. We rejected that argument as contrary to the statutory
text, context, and legislative history, concluding that the
legislature intended a two-step process and that the 20-year
limitation apply only at the second step.6 Id. at 650. ORS
215.130(11) “was not intended to alter the requirement that,
to prove the existence of a nonconforming use, the applicant
5
Prior to the enactment of ORS 215.130(11), an applicant had to prove that
the use had never been interrupted or abandoned since its lawful establishment,
whereas now an applicant needs to show only that it has not been interrupted
or abandoned during the 20 years preceding the application date. Grabhorn v.
Washington County, 279 Or App 197, 205, 379 P3d 796, rev den, 360 Or 568 (2016).
6
As discussed in Aguilar, our reading of the statute was strongly supported
by the legislative history. 201 Or App at 649-50 (discussing legislative history);
see, e.g., Tape Recording, House Committee on Water and Environment, Senate
Bill (SB) 470, May 10, 1999, Tape 158, Side 1 (statement of Dave Hunnicutt)
(“Essentially what we are doing with [the bill] is saying that the local govern-
ment, when determining whether a nonconforming use exists can require the
land owner to show two things: One, that the building was lawfully—or whatever
the structure was—was lawfully sited. Two, that it’s been in continuous operation
for no more than twenty years—they can’t make you go back more than twenty
years in other words.”); Testimony, Senate Water and Land Use Committee,
SB 470, Mar. 9, 1999, Ex. H (letter from Larry George) (“Under SB 470 a land-
owner must prove two things: 1) [t]hat the use, when initiated, was a legal use
allowed in the zone and that the landowner complied with the permit require-
ments to establish the use, and 2) [t]hat the use has existed continuously for at
least the past 10 years, but the landowner cannot be required to prove more than
20 years of continual use.” (Boldface omitted.)).
284 Ferguson Creek Investment v. Lane County
must establish its lawfulness before the zoning ordinance or
regulation went into effect.” Id.A more recent illustration of the proper application
of the two-step process is Grabhorn v. Washington County,
279 Or App 197, 379 P3d 796, rev den, 360 Or 568 (2016).
There, the respondent sought nonconforming-use verifica-
tion of the “composting operation” on their property. Id. at
204. The county denied the application, concluding that the
applicants had shown continuous use for the 20 years pre-
ceding the application date but had not shown that the use
was lawfully established before the zoning laws went into
effect. Id. Although there was testimony that “composting”
took place on the property as early as 1962, government
records “indicated that the only recycling activities occur-
ring on the property before 1989 were the grinding or chip-
ping of woody waste” and “that there were recognized differ-
ences at the time between those activities and ‘composting.’ ”
Id. at 206. On that record, the county concluded that the
applicants had not shown that the current “composing oper-
ation” was lawfully established when the relevant zoning
laws took effect. Id.
LUBA affirmed the county’s decision, and we in
turn affirmed LUBA’s decision, because the “petitioners did
not meet their burden of establishing that the use lawfully
existed on the date zoning made the use nonconforming.”
Id. at 209. In deciding the case, the county, LUBA, and we
all took as a given that, under Aguilar, the county was free
to look as far back as necessary to determine whether the
“composting operations” had been lawfully established as a
use before the zoning laws went into effect (the first step)
and that the 20-year lookback period in ORS 215.130(11)
applied only to the continuous-use determination (the sec-
ond step). See id.
With that understanding of the basic law of non-
conforming uses, we turn to the instant case, starting with
LUBA’s reasoning for overturning the county’s decision.
LUBA’S REASONING
In its order reversing the county’s decision, LUBA
correctly described the two-step process for establishing a
Cite as 335 Or App 277 (2024) 285
valid nonconforming use: First, respondent had to show that
the use was lawfully established before the relevant zoning
laws went into effect, and the county could look as far back
in time as needed to make that determination. Second, if
the use was lawfully established, then respondent next had
to show that it had been continuous, with ORS 215.130(11)
limiting the relevant period to the 20 years immediately
preceding the application date.
LUBA then proceeded to apply the two-step process
and, in doing so, concluded that the county had violated ORS
215.130(11) by looking back more than 20 years to deter-
mine whether the current house is the same or a different
dwelling as the lawfully built farmhouse. LUBA reasoned
that because the farmhouse was established as a lawful use
before 1980 when zoning went into effect, the first step of
the analysis was satisfied, and the county needed to proceed
to the second step, without considering “changes to the non-
conforming use” that occurred more than 20 years earlier:
“To summarize, petitioner must establish that the
[Current] Dwelling was lawfully established prior to 1980,
even if this requires looking back more than twenty years
before the date of the application for nonconforming use
verification. However, once that is established, the county
is not allowed to consider changes to the nonconforming
use beyond September 2001, more than twenty years prior
to petitioner’s application.”
In LUBA’s view, the county hearings official violated ORS
215.130(11) by considering whether the farmhouse had
been, in LUBA’s words, “abandoned or altered”7 between
1980 (when zoning went into effect and, in LUBA’s view, the
farmhouse became a lawful nonconforming use) and 2001
(the beginning of the 20-year lookback period for respon-
dent’s application).
7
“Alteration” is a term of art. ORS 215.130(5) provides that, when a lawful
nonconforming use has been established, “alteration” of the use may be permit-
ted subject to ORS 215.130(9). ORS 215.130(9) defines “alteration” of a noncon-
forming use to include “[a] change in the use of no greater adverse impact to
the neighborhood” and “[a] change in the structure or physical improvements of
no greater adverse impact to the neighborhood.” ORS 215.130(10)(c) allows the
county to condition approval of an alteration of a use “in a manner calculated to
ensure mitigation of adverse impacts as described in [ORS 215.130(9)].”
286 Ferguson Creek Investment v. Lane County
Having concluded that the county violated ORS
215.130(11), LUBA reversed and remanded to the county for
new continuous-use findings.
ANALYSIS
On judicial review, petitioner argues that LUBA
misconstrued ORS 215.130(11) and, as a result, incorrectly
concluded that the current dwelling “was lawfully estab-
lished prior to 1980.” Pointing to the county’s finding that the
current house is a different dwelling from the 1940’s farm-
house, petitioner argues that the county correctly concluded
that the current house has not been shown to have been a
lawful use when established. Petitioner argues that LUBA’s
reading of ORS 215.130(11) as prohibiting the county from
looking back more than 20 years to determine whether they
are the same dwelling is legally wrong under Aguilar.
In response, respondent defends LUBA’s order and
reasoning; however, respondent takes issue with the coun-
ty’s finding that the current house is not the same dwell-
ing as the farmhouse. Respondent also challenged that
finding before LUBA, claiming that it was not supported
by substantial evidence, but LUBA did not reach the issue.
Consequently, as previously described, the county’s find-
ing is binding on judicial review of LUBA’s order, although
LUBA will need to address respondent’s factual challenge
on remand because it did not reach it previously. The only
issue properly before us is whether the county violated ORS
215.130(11) by looking back more than 20 years to deter-
mine whether the current house is the same dwelling as the
farmhouse. We agree with petitioner that it did not. LUBA
erred in concluding otherwise.
LUBA construed ORS 215.130(11) as preventing
the county from denying respondent’s application on the
basis that the dwelling established before 1980 (the 1940’s
farmhouse) was not the same dwelling as the current house
for which nonconforming use verification was sought. In
LUBA’s view, when a local government is deciding at the
first step of the analysis whether “the use” at issue was law-
fully established before the relevant zoning laws went into
effect, the local government cannot consider any subsequent
Cite as 335 Or App 277 (2024) 287
“alteration” of the nonconforming use that occurred outside
the 20-year lookback period in ORS 215.130(11).
It may be that, for purposes of a nonconforming-use
application, there are some types of changes to a lawfully
established use that a local government is not allowed to
consider under ORS 215.130(11) if they occurred outside of
the 20-year lookback period.8 Even if that is so, however, the
county did not err in this case by looking back as far as nec-
essary to determine whether the current house was lawfully
established as a nonconforming use—and then concluding
that it was not because the current house is a different
dwelling from the farmhouse and respondents did not show
that the current dwelling (as opposed to the farmhouse) was
lawfully established as a nonconforming use.
“Uses” of land are diverse, and many uses are not
limited to a particular building or any particular kind of
structure. See, e.g., ORS 215.203(2)(a) (defining “farm use”
broadly); see also Polk County v. Martin, 292 Or 69, 79, 636
P2d 952 (1981) (holding that a quarry use was lawfully non-
conforming, where it was lawful before the restrictive zon-
ing took effect and there was no “dispute that the property
was committed to this use and was so used”). However, a
residential use, at least on farmland, is tied to a particular
building, specifically a particular dwelling. See, e.g., ORS
215.283(1)(d), (e), (p) (listing uses allowed on farmland and
identifying residential uses as “dwellings”); see also ORS
215.213(1)(d), (f), (q) (similar); Webster’s Third New Int’l
Dictionary 706 (2002 ed unabridged) (defining “dwelling”
as “a building or construction used for residence” (emphasis
added)).
8
In LUBA’s own case law, LUBA has interpreted ORS 215.130(11) broadly,
in part because ORS 215.130(11) refers to the “existence, continuity, nature and
extent of the use[.]” See, e.g., Reeder v. Multnomah County, 59 Or LUBA 240
(2009) (“The effect of ORS 215.130(11) is to render legally irrelevant evidence
regarding the existence, continuity or nature and extent of the use for the period
exceeding 20 years from the date of application.” (Internal quotation marks omit-
ted.)). While facially plausible, LUBA’s broad reading of the statute is in tension
with our statement in Aguilar that, in enacting ORS 215.130(11), the legislature
intended “merely to establish a limit on the period of time that an applicant must
prove that a use continued uninterrupted,” 201 Or App at 650, and with the leg-
islative history to that effect cited in Aguilar.
288 Ferguson Creek Investment v. Lane County
Because a residential “use” on farmland refers to
a specific dwelling, that use necessarily ceases to exist
when the specific dwelling ceases to exist. If a new dwell-
ing is built, it is a new residential use.9 That is important,
because it means that an applicant seeking to establish that
the current dwelling was lawfully established before zon-
ing went into effect cannot do so by showing that a different
dwelling was lawfully established before zoning went into
effect—regardless of whether a lawful procedure might have
existed by which, in theory, the applicant (or prior owner)
could have potentially achieved the new dwelling without
violating land use laws.10 It is still a different use, because it
is a different dwelling, and the applicant will have failed to
show that the current use—that is, the current dwelling—
was lawful when established. See Grabhorn, 279 Or App at
204 (the applicant must show “that the use was lawful at
the time a zoning ordinance or regulation went into effect”
(internal quotation marks omitted and emphasis added));
see also Aguilar, 201 Or App at 649 (quoting legislative his-
tory to the effect that a landowner must show “[t]hat the use,
when initiated, was a legal use allowed in the zone” (inter-
nal quotation marks omitted and emphasis added)).
We therefore hold that LUBA erred. Although the
1940s farmhouse was a lawful dwelling that was established
before the zoning laws took effect, the county found that the
current house is a different dwelling that was likely built
between 1998 and 2004. It follows that the current dwelling
is a different residential “use” and that the county correctly
concluded that respondent had failed to prove that that use
was lawfully established before the zoning laws took effect.
Reversed and remanded.
9
The legislature allows construction of replacement dwellings on farmland
under certain circumstances, ORS 215.283(1)(p), which is a deviation from that
baseline rule, but those circumstances do not apply here.
10
If the applicant actually followed a lawful procedure to achieve the new
dwelling—which could perhaps include alteration under ORS 215.130(5), as sug-
gested by LUBA—then the situation would be factually and legally different. We
speak here only of theoretical procedures that were not actually followed.