West End Citizen Association v. District of Columbia Board of Zoning Adjustment Foggy Bottom Grocery, LLC

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 11-AA-39
WEST END CITIZENS ASSOCIATION,
PETITIONER,
V.
DISTRICT OF COLUMBIA BOARD OF ZONING ADJUSTMENT,
RESPONDENT;
FOGGY BOTTOM GROCERY, LLC,
INTERVENOR.
On Petition for Review of a Decision of the
District of Columbia Board of Zoning Adjustment
(BZA-18031-A)
(Argued: November 29, 2011* Decided: April 2, 2015)
Martin P. Sullivan for petitioner.
Constance J. Miller for intervenor.
*
As explained more fully in the text of this opinion, this court issued its
initial decision in this case in an unpublished memorandum opinion and judgment
that was dated August 16, 2012, and amended December 19, 2012. We reversed
the Board of Zoning Adjustment in part and remanded the record for it to resolve
certain remaining issues. After further proceedings, the Board decided those issues
in a final decision and order on remand dated December 8, 2014. Thereafter, this
court received the augmented record and the parties’ statements of their positions.
Neither party requested further oral argument.
2
Irvin B. Nathan, Attorney General for the District of Columbia at the time,
Todd S. Kim, Solicitor General, Donna M. Murasky, Deputy Solicitor General, and
Andrew Van Brisker, Assistant Attorney General, filed a Statement in Lieu of Brief
in support of intervenor.
Before GLICKMAN and MCLEESE, Associate Judges, and FARRELL, Senior
Judge.
GLICKMAN, Associate Judge: This is round two in an appeal by the West
End Citizens Association (“WECA”) of a Certificate of Occupancy (“C of O”)
granted to intervenor, Foggy Bottom Grocery, LLC. Intervenor does business
under the name FoBoGro. The C of O allowed FoBoGro to operate a grocery in a
residentially zoned neighborhood of the District of Columbia known as Foggy
Bottom. In round one, the Board of Zoning Adjustment (“BZA”) concluded that
the proposed grocery business would not constitute an improper expansion of a
nonconforming use and therefore upheld the C of O. This court reversed that
decision. On remand, the BZA again rejected WECA’s appeal of the C of O, this
time on equitable estoppel grounds. Before us now is WECA’s petition for review
of that determination. For the reasons that follow, we affirm.
I.
The building at the center of this controversy is a three-story row house
located at 2140 F Street, N.W. It has been the site of a grocery store since 1946.
3
The operation of that grocery on one floor of the building has been a lawful
nonconforming use in a residentially zoned area since at least May 12, 1958, when
the modern zoning map became effective.
In 2008, FoBoGro became interested in acquiring and modernizing the
grocery business there. Before doing so, it applied for a new C of O to allow the
entire building to be used for a grocery store and what its application referred to as
a “sandwich shop.” The Zoning Administrator approved the application and issued
the requested C of O on August 21, 2008. The C of O provided that the total area
of the building that could be devoted to the approved uses was 1,835 square feet,
which encompassed all three floors. After receiving this C of O, FoBoGro
purchased the business, leased the building from George Washington University,
and eventually began renovating the property.
WECA did not learn of FoBoGro’s August 2008 C of O until around August
2009. It then complained to the Zoning Administrator that the C of O improperly
expanded a nonconforming use in two respects: by allowing the operation of a
grocery to expand from one floor of the building to all three floors, and by
permitting the operation of a sandwich shop at the location in addition to a grocery.
In response to WECA’s complaints, the Zoning Administrator sent a revocation
4
notice to FoBoGro on October 14, 2009. “Because you changed the prior use of
the Property in your application by the adding of a proposed ‘sandwich shop use,’”
the notice stated, “the C of O . . . was issued in error.” The notice did not cite the
alleged expansion of the grocery store use from one to three floors as a basis for
revocation.1
FoBoGro opposed the threatened revocation. It explained that it merely
intended to sell sandwiches and other prepared foods for off-premises consumption
only, as a component of its grocery business. This explanation satisfied the Zoning
Administrator that no expansion of the nonconforming use was planned. On
November 4, 2009, he issued a new C of O to FoBoGro to replace the August 2008
C of O. The new C of O continued to permit a grocery business to be conducted in
the 1,835 square foot space at 2140 F Street. The only differences were that it
described the authorized use as including an “accessory prepared food shop”
1
Although prior C of O’s had authorized use of the first floor as a grocery
store without mentioning the other two floors of the building, the Zoning
Administrator determined that those other floors always had been utilized to
provide storage and office space for the grocery. This was permissible in the
Zoning Administrator’s view because C of O’s for commercial establishments
typically did not mention parts of the premises that were not open to the public.
The Zoning Administrator therefore concluded that FoBoGro’s use of the floors in
its grocery business did not constitute an expansion of the nonconforming use of
the premises, even though FoBoGro planned to repurpose the floors for retail use.
5
instead of a “sandwich shop,” and it stated explicitly that the approved occupancy
comprised three floors of the building.
WECA promptly appealed the November 2009 C of O to the BZA. It
contended that the C of O impermissibly expanded the existing nonconforming
grocery use by permitting FoBoGro to use the entire building in the grocery
business instead of only one floor, and by permitting the operation of an accessory
prepared foods shop. FoBoGro disputed these contentions and asserted affirmative
equitable defenses of laches and estoppel.2
After a hearing at which the Zoning Administrator and other witnesses
testified, the BZA rendered its initial decision in this case. It ruled that the C of O
2
More or less simultaneously in the fall of 2009, WECA also protested an
application FoBoGro filed with the Alcoholic Beverage Control Board (the “ABC
Board”) for changes in its retailer’s license to allow it to expand to three floors,
extend its operating hours, and incorporate a take-out deli. WECA objected that
these changes would have an adverse impact on the peace, order, and quiet of the
neighborhood, and on parking, vehicular and pedestrian safety, and residential
property values. The ABC Board held a hearing on WECA’s protest, at which
WECA representatives testified. Ultimately, the ABC Board granted FoBoGro’s
application, finding that the requested changes in FoBoGro’s grocery business
were “appropriate for the location” and would “not adversely impact the peace,
order, and quiet of the neighborhood; residential parking needs and vehicular and
pedestrian safety; and real property values” in the area. WECA’s submissions to
the ABC Board and that Board’s decision are included in the administrative record
of WECA’s appeal of FoBoGro’s C of O to the BZA.
6
did not authorize an impermissible expansion of the nonconforming grocery store
use, because that use had not been limited in the past to only one floor of the
building, and because the incidental sale of prepared food for off-site consumption
was part of the grocery business. The BZA therefore denied WECA’s appeal of
the C of O without finding it necessary to address FoBoGro’s equitable defenses.
WECA sought review in this court. In an unpublished memorandum
opinion, we affirmed the BZA’s determination that the sale of prepared food was
encompassed in the grocery use. We held, however, that the nonconforming
grocery use at 2140 F Street had been limited by the terms of earlier C of O’s to
one floor of the building, and that it was improper for the November 2009 C of O
to permit the expansion of such use to the rest of the building. We remanded the
record to the BZA for it to consider three remaining issues: the timeliness of
WECA’s appeal of the Zoning Administrator’s approval of the expanded grocery
use, and FoBoGro’s laches and estoppel defenses to the revocation of its C of O.3
3
This court identified the timeliness issue sua sponte, noting that the Zoning
Administrator first authorized the expansion of the nonconforming grocery use
throughout the building in the 2008 C of O over a year before WECA filed its
appeal. See 11 DCMR § 3112.2 (a) (2015) (providing that an appeal of a decision
to grant a C of O must be filed within sixty days from “the date the person
appealing the administrative decision had notice or knowledge of the decision
complained of, or reasonably should have had notice or knowledge of the decision
complained of, whichever is earlier”); Basken v. District of Columbia Bd. of
(continued…)
7
In its decision on remand, the BZA ruled that FoBoGro had forfeited a
challenge to the timeliness of WECA’s appeal4 and had not established a laches
defense. The BZA concluded, however, that FoBoGro’s equitable estoppel
defense to revocation of its C of O was meritorious. Accordingly, the BZA
dismissed the remaining portion of WECA’s appeal.
The augmented record of the proceedings before the BZA has been returned
to this court for a final decision on WECA’s petition for review. In compliance
with our remand order, the parties have advised us of their positions with respect to
the BZA’s decision. FoBoGro concurs with the order of dismissal and does not
seek review of the BZA’s determinations regarding timeliness and laches. WECA
argues that the BZA erred in accepting FoBoGro’s estoppel defense and asks us to
reverse the dismissal. Our review of the BZA’s determination is limited in nature.
(continued…)
Zoning Adjustment, 946 A.2d 356, 367 (D.C. 2008) (explaining that the issuance of
a new C of O “does not … start another sixty-day appeal period as to any and all
DCRA zoning decisions affecting a project that preceded issuance of the
certificate”).
4
Relying on this court’s decision in Gatewood v. District of Columbia Water
& Sewer Auth., 82 A.3d 41 (D.C. 2013), the BZA concluded that the time limit in
the zoning regulations for appealing a C of O is a non-jurisdictional claim-
processing rule. See id. at 46-49. Prior decisions of this court held the time limit
to be jurisdictional. See, e.g., Economides v. District of Columbia Bd. of Zoning
Adjustment, 954 A.2d 427, 434-35 (D.C. 2008).
8
We must affirm its factual findings as long as they are based on substantial
evidence in the record and, ultimately, we must sustain its action unless it was
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law.5
II.
Because of the public interest in enforcement of the zoning laws, stringent
conditions are placed on the assertion of an equitable estoppel defense against the
government, and “its application is limited to situations when the equities are
strongly in favor of the party invoking the doctrine.”6 Thus, as the BZA correctly
recognized, we typically have said that to make out a case of estoppel, a party must
show that “(1) acting in good faith, (2) on affirmative acts of [the zoning
authority], (3) he made expensive and permanent improvements in reliance
5
Kuri Bros. v. District of Columbia Bd. of Zoning Adjustment, 891 A.2d
241, 244-45 (D.C. 2006); D.C. Code § 2-510 (a)(3) (2012 Repl.).
6
Sisson v. District of Columbia Bd. of Zoning Adjustment, 805 A.2d 964,
972 (D.C. 2002) (internal quotation marks and brackets omitted); see also id. at
971 (emphasizing the “fundamental notion” that defenses of laches and estoppel
are “judicially disfavored in the zoning context”) (internal quotation marks
omitted).
9
thereon, and (4) the equities strongly favor him.”7 For the equities to favor the
party claiming an estoppel, any injury to the public that would flow from the non-
enforcement of the zoning law must be minimal and outweighed by the injury
estoppel would avoid.8
7
Id. at 972 (internal quotation marks and brackets omitted). See also 4
RATHKOPF’S THE LAW OF ZONING AND PLANNING (hereinafter, “RATHKOPF”) §
65:29 (2014) (“A basic formulation of estoppel elements states that a local
government exercising its zoning powers will be estopped when a property owner
(1) relying in good faith, (2) upon some act or omission of the government, (3) has
made such extensive obligations and incurred such extensive expenses that it
would be highly inequitable and unjust to destroy the rights which the owner has
ostensibly acquired.”); Interdonato v. District of Columbia Bd. of Zoning
Adjustment, 429 A.2d 1000, 1003 (D.C. 1981) (“Only by showing each of the
following elements could petitioners successfully invoke an estoppel claim: (1)
expensive and permanent improvements, (2) made in good faith, (3) in justifiable
and reasonable reliance upon[] (4) affirmative acts of the District government, (5)
without notice that the improvements might violate the zoning regulations; and (6)
equities that strongly favor the petitioners.”).
8
We note that an estoppel of government action to enforce the zoning laws
does not necessarily foreclose private enforcement of rights under those laws—for
example, where an adjoining property owner whose “interest is distinct from and
greater than that of the community as a whole” complains in a timely manner of
special damages attributable to an erroneously issued building permit or C of O.
Garrou v. Teaneck Tryon Co., 94 A.2d 332, 335 (N.J. 1953); see generally 4
RATHKOPF § 65:32 (“Laches and estoppel involving adjoining owners”). The
availability of private relief when the government is estopped from revoking a
permit or a C of O, or from otherwise enforcing the zoning laws, is a question our
court has yet to resolve or examine in detail. See Rafferty v. District of Columbia
Zoning Comm’n, 583 A.2d 169, 176 (D.C. 1990) (“This court has never
determined whether the District’s erroneous issuance of a permit may operate to
estop other interested persons from enforcing their rights under the zoning laws.”);
Saah v. District of Columbia Bd. of Zoning Adjustment, 433 A.2d 1114, 1117 n.3
(D.C. 1981) (holding BZA estopped from denying a variance where, inter alia,
(continued…)
10
The BZA concluded the requirements of equitable estoppel were satisfied in
this case because it found that (1) the Zoning Administrator’s 2008 C of O
permitted the entire building to be used for the operation of a grocery; (2)
FoBoGro proceeded reasonably and in good faith, having no reason to believe the
2008 C of O impermissibly expanded the nonconforming grocery use; (3)
FoBoGro relied on the 2008 C of O by spending “considerable sums” to purchase
the grocery business, lease the building, enter into various contracts, renovate the
building, and incur other business expenses; and (4) the equities favored FoBoGro,
because of its good faith and objectively reasonable reliance on the 2008 C of O,
and because the BZA found “no evidence” that the neighborhood would be harmed
by the continued operation of “a grocery store that has been a neighborhood
institution for over 60 years.”
(continued…)
injury to the public would be “minimal,” but not “reach[ing] the question of the
effect of the estoppel on a claim made by a neighboring landowner”); Goto v.
District of Columbia Bd. of Zoning Adjustment, 423 A.2d 917, 925 n.15 (D.C.
1980) (“It is not clear that estoppel will bar a case brought by a neighboring
landowner; arguably, that defense may be asserted only against the municipality
which rendered the decision on which a party relied.”). Given the absence of any
convincing showing of prejudice to WECA, as we discuss below, we conclude in
the present case only that the BZA permissibly relied on estoppel principles to
foreclose WECA’s challenge to the issuance of the 2009 C of O to FoBoGro.
11
WECA’s principal argument on appeal is that FoBoGro “could not have
relied justifiably or reasonably”9 on the 2008 C of O when it incurred the bulk of
its renovation expenses, because it did so after WECA commenced its attack on
the C of O in August 2009.10 But as the BZA appreciated, FoBoGro relied on the
2008 C of O to its considerable financial detriment in other ways well before it
learned of WECA’s challenge to the legality of its C of O, for example by
purchasing the grocery business and entering into a lease of the building.
Although our cases in the zoning context have focused on whether the party
invoking estoppel made expensive and permanent improvements in reliance on the
erroneous governmental decision, we see no reason in principle why other forms of
reliance cannot equally support an estoppel. Any error by the BZA in taking
FoBoGro’s renovation costs into account strikes us as surely inconsequential.11
9
Interdonato, 429 A.2d at 1004.
10
FoBoGro was not issued a building permit authorizing renovations until
August 16, 2009, and construction at the property did not begin until late
September or early October 2009.
11
Under “the rule of prejudicial error,” D.C. Code § 2-510 (b), “reversal and
remand is required only if substantial doubt exists whether the agency would have
made the same ultimate finding with the error removed.” Arthur v. District of
Columbia Nurses’ Exam. Bd., 459 A.2d 141, 146 (D.C. 1983); see, e.g., Neighbors
Against Foxhall Gridlock v. District of Columbia Bd. of Zoning Adjustment, 792
A.2d 246, 254 (D.C. 2002); Glenbrook Rd. Ass’n v. District of Columbia Bd. of
Zoning Adjustment, 605 A.2d 22, 44 (D.C. 1992).
12
WECA also argues that FoBoGro was precluded from asserting its estoppel
defense because the C of O at issue in the present proceedings is not the 2008 C of
O on which it relied, but rather is the replacement C of O that the Zoning
Administrator issued in November 2009. We do not agree, because the latter C of
O continued without material change the earlier authorization in the 2008 C of O
of a grocery use on all three floors of the building, and FoBoGro had no reason or
occasion to assert its estoppel defense at any time before WECA appealed the 2009
C of O.
Furthermore, contrary to WECA’s contention, the BZA’s finding that
FoBoGro acted in good faith is not undermined by the fact that its principal (Mr.
Hart) identified himself as the business owner in the application for the 2008 C of
O before FoBoGro actually purchased the grocery. This fact was not concealed
and there is no indication that the Zoning Administrator was misled in any way or
that WECA or any other party was prejudiced by the irregularity.
Finally, regarding the BZA’s assessment of the competing equities, WECA
disagrees with the finding that the expansion of the nonconforming grocery store
use from one to three floors will not harm the surrounding neighborhood. WECA
appears to complain that the BZA failed to address its claims of prejudice.
13
However, WECA does not even attempt to demonstrate that the BZA’s finding
lacks substantial support in the record, nor does it point us to evidence of any
actual harm flowing from the grocery store operation. WECA’s expressed
concerns about possible adverse effects on the area’s tranquility, traffic, and
property values were speculative and unsubstantiated. In our view, the BZA’s
dismissal of those concerns—it found “no evidence” of harm and stated that “[i]n
fact, WECA has never argued that it has been harmed in any way by the operations
of the grocery store”—was within the ambit of its discretion as fact finder.
In sum, we are not persuaded that the BZA materially erred in finding on the
record before it that FoBoGro satisfied all the requirements for an equitable
estoppel of the revocation of its C of O. We likewise are not persuaded that the
BZA misunderstood or misapplied the law, that it acted arbitrarily or capriciously,
or that it abused its discretion. Accordingly, we uphold the determination that
FoBoGro established its estoppel defense and affirm the BZA’s order of December
8, 2014, dismissing the remainder of WECA’s appeal of the November 2009 C of
O issued to FoBoGro.
So ordered.