Opinion
Civil Action No. 97-0298-CB-C
April 24, 2001
ORDER
This matter is before the Court on a motion for summary judgment filed by Defendant City of Orange Beach (Doc. 27), along with supporting briefs (Docs. 28 56), Plaintiffs' briefs in opposition to the motion (Docs. 39 59), and Defendant's reply briefs (Docs. 42 60). At issue on summary judgment is whether the City of Orange Beach violated Plaintiffs' rights to substantive due process, procedural due process and equal protection. Also at issue are Plaintiffs' pendant state law claims for fraud and misrepresentation regarding representations allegedly made by city officials. After considering all of the issues raised in light of the evidence presented, the Court concludes that the City of Orange Beach is entitled to summary judgment in its favor on the due process and equal protection claims asserted by Plaintiffs and that the pendant state law claims should be dismissed pursuant to 28 U.S.C. § 1367.
I. Findings of Fact
These facts are set forth, as the law requires, in the light most favorable to the plaintiffs, as the non-moving party. Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994 (1st Cir. 1992).
Plaintiffs Donald J. Roberts and Donna L. Roberts ("the Roberts") owned a drugstore in Mississippi from approximately 1990 to 1995. In 1995, the Roberts decided to sell the Mississippi business and to open a drugstore in Orange Beach, Alabama. (Depo. of Donna Roberts, pp. 18-21). With the assistance of a real estate agent, the Roberts located a parcel of land on Orange Beach Boulevard. (Plaintiffs' Complaint, ¶ 7). Although the property had originally been zoned RS (Residential Single Family), the previous owner had petitioned the City of Orange Beach ("the City") for an amendment to the zoning ordinance and, on September 6, 1994, the zoning of the property was changed from RS to NB (Neighborhood Business). (Plaintiffs' Complaint, ¶ 9; City Council Minutes of September 6, 1994).
The Complaint names Donald J. Roberts and Donna L. Roberts, as well as Grumpus, Inc., as plaintiffs in this action. The land and building are owned by the Roberts. There is some indication in the record that the Roberts have orally leased the property to Grumpus, Inc., a company that they incorporated. Although there may be some question here as to which of the named plaintiffs are proper plaintiffs to this action, because that issue is not relevant to the outcome of this case, the issue has not been addressed. All plaintiffs will be referred to collectively herein as "the Roberts."
Prior to purchasing the property, Donna Roberts met on several occasions with Bill Silvers, the Building Official for the City. According to Donna Roberts, she told Silvers about their plan to operate a drug store on the property, and he advised her that a zoning use change would have to be made to allow a drug store in a NB zoned area. (Depo. of Donna Roberts, pp. 74-79). She also testified that she told Silvers that she wanted to sell beer at the store and that Silvers told her she could do that. (Id.). After the building plans were drawn, she had another meeting with Silvers at which she showed him the plans that had an area marked "cooler," and according to Donna Roberts, she referred to this area as the beer cooler. (Depo. of Donna Roberts, p. 87). Silvers did not say anything concerning the beer cooler. In fact, under the Orange Beach zoning ordinance off-premises beer sales are only permitted in B.R. (Beach Resort) and GB (General Business) classifications — beer sales are not allowed in NB zoned areas. (Zoning Ordinance, Article 4, p. 12). Donna Roberts concedes that she did not review the Zoning Ordinance. (Depo. of Donna Roberts, pp. 74-75, 84-85, 88).
Although Silvers acknowledges having had a conversation with Donna Roberts concerning the zoning change, he denies telling her that retail beer sales would be permitted in an NB zoned area. (Affidavit of Bill Silvers). For purposes of this motion, the Court will consider only the testimony of Donna Roberts concerning this matter.
On August 7, 1995, the Roberts entered into a Purchase Agreement whereby they agreed to purchase the property on the condition that a pharmacy be allowed on the property. (Purchase Agreement). On November 27, 1995, the Orange Beach City Council amended the zoning ordinance to allow a drug store as a permitted use in a NB zoned area. (Ordinance No. 346). The Roberts purchased the lot on February 15, 1996. (Warranty Deed). The City issued a building permit to the Roberts on or about April 22, 1996. (Building Permit No. 1972).
On March 5, 1996, Donna Roberts applied for a retail off-premises beer license. (Application for Retail Beer (Off-Premises Only)). This application for a beer license was approved by the City Council on March 19, 1996. (Id.). On May 28, 1996, the Roberts filed a Renewal Application for off-premises retail beer sales naming Grumpus, Inc. as the applicant for the license in lieu of Donna Roberts. (Renewal Application). After the City had approved the Renewal Application, it became aware of the fact that the City's zoning ordinance does not allow off-premises retail beer sales in a NB zoned area. After discovering this fact, the City Council voted to rescind its prior approval of the applications and so informed the ABC Board. (City Council Minutes of June 4, 1996; letter from City's attorney to ABC Board representative dated June 7, 1996). The ABC Board subsequently denied Grumpus, Inc.'s application for a beer license. (ABC Board records).
Unlike applications for liquor or wine licenses, retail beer license applications do not have to be approved by a city council, and therefore, the Alcoholic Beverage Control Board has the statutory authority to issue a retail beer license without the application being approved by a city council. Ala. Code § 28-3A-17. However, it is the custom of the Alcoholic Beverage Control Board to consider the advice of a city council prior to making its decision on the issuance of a retail beer license. Alabama League of Municipalities, Selected Reading for the Municipal Official, Regulation of Alcoholic Beverages, p. 210, ¶ F and G.
Section 28-3A-17 of the Alabama Code states:
Upon applicant's compliance with the provisions of this chapter and the regulations made thereunder, the board shall issue to applicant a retail beer license . . . where such use of the proposed location is not, at the time of the original application, prohibited by a valid zoning ordinance . . . .
On June 4, 1996, neighboring landowners filed notices of appeal to the City of Orange Beach Board of Adjustment ("the Board") challenging the issuance of the building permit to the Roberts. (McGill and Jones Appeal dated June 4, 1996). In their appeal, the neighboring landowners cited a number of areas in which they believed the construction of the drug store was in violation of the zoning ordinance, including specifically, complaints about violations of the buffering requirements. (Id.) The Roberts objected to the timeliness of the appeals, and on July 9, 1996, the Board determined that the appeals were untimely and refused to consider the appeals. (Board Minutes of July 9, 1996).
After receiving a complaint about a violation, the City conducted a survey and found that the drug store slab encroached upon the 30-foot rear setback requirement contained in the zoning ordinance. (Notice of Setback Violation; Affidavit of Mike Donnelly). The Roberts petitioned the City for a variance to allow the rear of the building to extend into the rear setback 2' 6". (Request for Variance). After hearing public comment, including opposition to the variance request, the Board granted the variance with four additional conditions which were apparently added in an attempt to address (and to appease) the concerns of neighboring landowners. (Board Minutes of July 16, 1996; Depo. of Rose Williams, pp. 49, 52).
On September 11, 1996, after inspections of the property were made, a certificate of occupancy ("the partial CO") was issued for the interior of the building only. (Inspection Reports; Certificate of Occupancy dated September 11, 1996). In late September, the Roberts opened Orange Beach Drugs on the premises.
On October 8, 1996, neighboring landowners ("the McGills") filed an appeal to the Board challenging the issuance of the partial CO. (McGill Appeal of October 8, 1996). Pursuant to Article 11, § 11.0502 of the Zoning Ordinance and Article VI, Paragraph 6.7 of the Board's Bylaws, an appeal stays all proceedings in furtherance of the action appealed from unless the officer from whom the appeal is taken certifies to the Board that a stay would cause imminent peril to life or property. No such certification was made. Following the filing of the McGill appeal, a final reinspection was performed which revealed that the prior deficiencies had been remedied and therefore it was "OK to issue CO for remainder of project." (Inspection Report of October 22, 1996; Affidavit of Mike Hilyer). Because of the stay in connection with the McGill appeal, the final CO was not issued at that time.
On November 26, 1996, the Roberts filed a Request for Variance requesting that the Board grant a variance from the minimum lot size requirements contained in the zoning ordinance, that the Board determine that the architectural review required was appropriately performed, and that the Board determine that the lot and building were entitled to a CO. (Request for Variance dated November 26, 1996). On December 5 or 6, 1996, the chairman of the Board determined that the Roberts variance request was not in order at that time because the City had not given the Roberts a Notice of Violation. (Chairman's Memo). The Roberts' were advised of this determination on December 6, 1996. (Fax of Chairman's Memo to attorney representing the Roberts).
Article 10, § 10.0301 of the Zoning Ordinance states that architectural review is required of all buildings proposed in a NB zoned area, and § 10.0302 provides for an Architectural Review Board. However, the City did not appoint an Architectural Review Board and undertake to perform formal architectural reviews, pursuant to § 10.0301, until after the Roberts had been issued a building permit. (Depo. of Bill Silvers, pp. 39-40).
On January 20, 1997, the Board upheld the McGill appeal. (Board Minutes of January 20, 1997). Thereafter, on January 27, 1997, the Roberts filed another request for a variance addressing the issues specified by the Board as the reasons it upheld the McGill appeal. (Variance Request dated January 27, 1997). On January 29, 1997, the Board held a special meeting at which it passed a motion instructing the city zoning official to take the appropriate action to put at issue the matters made the subject of the January variance request. (Board Minutes of January 29, 1997). The building official for the City then issued violation notices to the Roberts regarding those matters made the subject of their variance request. (Notice of Violation). The variance request was considered by the Board on February 17, 1997 and was rejected by the Board on a 2-2 vote. (Board's Meeting Summary of February 17, 1997). Both the McGills and the Roberts filed appeals to the Circuit Court of Baldwin County challenging the actions of the Board. The McGills sought an order that the business not be allowed to operate due to what they alleged were numerous violations of the zoning ordinance. The Roberts challenged the denial of their variance request and the City's refusal to issue a final certificate of occupancy. After a trial, the Circuit Court made a de novo determination of the two consolidated appeals in favor of the Roberts and ordered that the City issue a final certificate of occupancy to the Roberts. (Order dated October 29, 1998). In compliance with the Order, the City issued a final Certificate of Occupancy on November 24, 1998. (Certificate of Occupancy dated November 24, 1998). As of February 19, 2001, the Roberts have not been cited for any violations of city ordinance. (Affidavit of Mike Donnelly).
The McGills appealed the circuit court's order to the Alabama Court of Civil Appeals, which affirmed without opinion, and the Alabama Supreme Court denied the McGills' petition for a writ of certiorari.
II. Conclusions of Law
A. Summary Judgment Standard
Summary judgment should be granted only if "there is no issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment bears "the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats Clark. Inc., 929 F.2d 604, 608 (11th Cir. 1991). Once the moving party has satisfied its responsibility, the burden shifts to the nonmoving party to show the existence of a genuine issue of material fact. Id. "If the nonmoving party fails to make `a sufficient showing on an essential element of her case with respect to which she has the burden of proof,' the moving party is entitled to summary judgment." Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317 (1986)) (footnote omitted). "In reviewing whether the nonmoving party has met its burden, the court must stop short of weighing the evidence and making credibility determinations of the truth of the matter. Instead, the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 999 (11th Cir. 1992) (internal citations and quotations omitted).
B. Federal Claims
The Roberts allege that the City is liable to them, under 42 U.S.C. § 1983, for violating their constitutional rights with regard to actions taken by the City's Board of Zoning Adjustment ("the Board") and the City's Building Official. Specifically, the Roberts claim that the City deprived them of procedural and substantive due process by refusing to approve their application for a retail off-premises beer license, by refusing to consider and grant a requested variance, and by refusing to issue a final certificate of occupancy for their property. The Roberts also claim that the City deprived them of their right to equal protection by failing to subject their Orange Beach Drugs project to architectural review, by scrutinizing their project more closely than other projects, and by unequally applying the sign ordinance and zoning laws to them.
1. Procedural Due Process
In order to prevail on a procedural due process claim, the plaintiff must show (1) a deprivation of a protected property interest and (2) an absence of adequate procedures to remedy the deprivation. See Cotton v. Jackson, 216 F.3d 1328, 1330-31 (11th Cir. 2000).
In order to determine whether a party has a protected property interest, federal courts must look to the applicable state law. See Arrington v. Dickerson, 915 F. Supp. 1503, 1508 (M.D. Ala. 1995). It is well settled under Alabama law that an applicant for an off-premises beer license has no legitimate claim of entitlement to the license and thus no protected property interest in the issuance of the license. Id. at 1509;see also Ott v. Everett, 420 So.2d 258, 261 (Ala. 1982) (noting that license to sell intoxicants is merely a privilege, not a property right); Potts v. Bennett, 487 So.2d 919, 923 (Ala.Civ.App. 1985) (rejecting plaintiffs procedural due process claim on grounds that off-premises beer license is merely a privilege, not a property right or vested interest). Therefore, because the Roberts had no protected property interest in the issuance of an off-premises beer license, they cannot prevail on their procedural due process claim on this ground.
With regard to the variance/certificate of occupancy deprivation claim, there is no need to determine whether the Roberts had a protected property interest because the Roberts cannot make the requisite showing of an absence of adequate procedures. As stated in McKinney v. Pate, 20 F.3d 1550, 1557 (11th Cir. 1994) (en banc), "only when the state refuses to provide a process sufficient to remedy the procedural deprivation does a constitutional violation actionable under section 1983 arise." Before being subjected to possible liability under § 1983, "the state must have the opportunity to `remedy the procedural failings of its subdivisions and agencies in the appropriate fora — agencies, review boards, and state courts . . . .'" Cotton, 216 F.3d at 1331 (quoting McKinney, 20 F.3d at 1560). Thus, this Court must address the issue of whether the state procedures available to the Roberts were adequate to remedy the alleged deprivations.
After their requests for a variance and a final certificate of occupancy were denied in February of 1997, the Roberts filed an appeal of the Board's decision, pursuant to § 11-52-81 of the Alabama Code, to the state circuit court. After the circuit court conducted a trial and ruled in favor of the Roberts, the neighboring landowners, who had also filed an appeal of the Board's decision, appealed the circuit court's judgment to the Alabama Court of Civil Appeals. The Court of Civil Appeals affirmed the circuit court's judgment and the Alabama Supreme Court denied the neighboring landowner's petition for a writ of certiorari. Approximately one month after the circuit court's ruling, the City, in compliance with the court's order, issued a final certificate of occupancy to the Roberts. After utilizing the available state procedures, the Roberts received just what they had asked for — the requested variance and the final certificate of occupancy.
The Roberts have argued that the state remedy was inadequate because the circuit court did not have the authority to award monetary damages under § 11-52-81. This argument is without merit for several reasons. First, the Eleventh Circuit has held that "to be adequate, the state procedure need not provide all the relief available under section 1983." Cotton, 216 F.3d at 1331. The state procedure is adequate if it is able to correct the deficiencies alleged and if it provides the plaintiff with whatever process is due. Id. Furthermore, the Roberts could have filed state law tort claims, like those they have asserted in this action, in state court to seek any monetary redress to which they may have been entitled as a result of the City's actions. The Roberts cannot rely on their failure to take advantage of an available state law remedy to support a procedural due process claim. See id.
In their supplemental brief the Roberts also argue that the City deprived them of their assets (i.e., the money they had to expend to obtain their requested variance and their final certificate of occupancy) and that this deprivation was in violation of their due process rights. This novel argument was not supported by any authority, and the Court has found none to support it, either. If this Court accepted the argument that a party has a protected property interest in money it expends to obtain a variance or to prosecute or defend litigation, the floodgates would open, and the federal court system would be submerged by § 1983 actions.
It is clear that the state provided the Roberts "all the process they were due" and obviously corrected any deficiencies in the City's procedures with regard to the City's refusal to grant the requested variance and to issue the final certificate of occupancy. See Cotton, 216 F.3d at 1331-33; Boatman v. Town of Oakland, 76 F.3d 341, 346 (11th Cir. 1996). Accordingly, the Roberts cannot prevail on their § 1983 claim based on a lack of procedural due process.
2. Substantive Due Process
The Eleventh Circuit described the rights protected by the "substantive component of the Due Process Clause" in McKinney v. Pate, 20 F.3d 1550 (11th Cir. 1994), as follows:
The substantive component of the Due Process Clause protects those rights that are "fundamental," that is, rights that are "implicit in the concept of ordered liberty." The Supreme Court has deemed that most — but not all — of the rights enumerated in the Bill of Rights are fundamental; certain unenumerated rights (for instance, the penumbral right of privacy) also merit protection. It is in this framework that fundamental rights are incorporated against the states. A finding that a right merits substantive due process protection means that the right is protected "against `certain government actions regardless of the fairness of the procedures used to implement them.'"
Although the Supreme Court has extended substantive due process protection to certain unenumerated rights, it has not extended Fourteenth Amendment coverage to a host of other areas. In fact,
the Court has always been reluctant to expand the concept of substantive due process because guideposts for responsible decisionmaking in this uncharted area are scarce and open-ended. The doctrine of judicial self-restraint requires us to exercise the utmost care whenever we are asked to break new ground in this field.
Hence, remaining largely outside the scope of substantive due process jurisprudence are tort law and public employment law.
In short, areas in which substantive rights are created only by state law . . . are not subject to substantive due process protection under the Due Process Clause because "substantive due process rights are created only by the Constitution." As a result, these state law based rights constitutionally may be rescinded so long as the elements of procedural — not substantive — due process are observed.20 F.3d at 1556 (citations and footnotes omitted).
In Arrington v. Dickerson, 915 F. Supp. 1503, 1508-09 (M.D. Ala. 1995), the court held that the plaintiff, who argued that a city council's denial of his application for a liquor license violated his due process rights, failed to state a substantive due process claim. As inArrington, the Roberts claim here that the City violated their substantive due process rights when the city council rescinded its approval of their application for an off-premises beer license fails to pass muster.
Likewise, the Roberts claim that the City violated their substantive due process rights (1) when it delayed consideration of their request for a variance, (2) when it subsequently denied the request for a variance, and (3) when it refused to issue a final certificate of occupancy also fails. "It is well established that land use rights, as property rights generally, are state-created rights" and "that enforcement of existing zoning regulations is an executive, not legislative act." DeKalb Stone. Inc. v. County of DeKalb, Georgia, 106 F.3d 956, 959 (11th Cir. 1997).
A substantive due process cause of action simply does not exists where an executive actor deprives the plaintiff of a state-created property right. See DeKalb Stone, 106 F.3d at 959-60 (citing McKinney v. Pate, 20 F.3d 1550 (11th Cir. 1994); C.B. ex rel. Breeding v. Driscoll, 82 F.3d 383 (11th Cir. 1996)); see also Boatman v. Town of Oakland, 76 F.3d 341, 346 (11th Cir. 1996) (holding that no substantive due process claim had been stated where plaintiff property owner alleged that town executives arbitrarily and capriciously refused to issue a certificate of occupancy). "In order to be afforded substantive due process protection, the right at issue must be so fundamental that our democratic society and its inherent freedoms would be lost if that right were to be violated." Moates v. Strength, 57 F. Supp.2d 1305, 1309 (M.D. Ala. 1999). Because the Roberts cannot prove deprivation of such a right, their claim of a substantive due process violation fails.
3. Equal Protection
The Roberts have alleged that the City violated their right to equal protection by failing to subject their drug store project to architectural review, by scrutinizing their project more closely than other projects, and by unequally applying the sign ordinance and zoning laws to them. The Roberts essentially claim that the City unequally administered facially neutral statutes, i.e., the zoning ordinance and the sign ordinance. To prevail on their equal protection claim, the Roberts must show "(1) that the City treated them differently from similarly situated persons, and (2) that the City unequally applied its zoning laws for the purpose of discriminating against them." Jackson v. City of Auburn, 41 F. Supp.2d 1300, 1308 (M.D. Ala. 1999).
The Roberts have made no showing that the City treated them differently from similarly situated persons. Although the zoning ordinance provided for an Architectural Review Board to review plans submitted to the City for construction in Orange Beach, the evidence submitted by the parties shows that, at the time the Roberts submitted their plans, the City did not yet have a formal Architectural Review Board and that no one who submitted plans prior to or at the same time as the Roberts had their plans reviewed by the Architectural Review Board. The Roberts have only submitted evidence showing that sometime after their construction began, the City instituted an Architectural Review Board and began reviewing submitted plans. The Roberts were not similarly situated to persons submitting plans after their construction began and the Architectural Review Board was formed. See Jackson, 41 F. Supp.2d at 1308-09 (holding that development projects constructed prior to change in zoning ordinance were not similarly situated to project proposed after date of change). Like the claim in Jackson, this claim does not support an equal protection action because "`[d]ifferent treatment of dissimilarly situated persons does not violate the equal protection clause.'" Id. at 1310.
The Roberts also base their equal protection argument on their allegation that their project was scrutinized more closely than other projects because citizens complaining to the City about the project acted irate. However, the Roberts offered absolutely no evidence to support this allegation. The Roberts also failed to offer any evidence, versus allegations, that any other similarly situated business was treated differently with regard to the sign ordinance or any other zoning regulation. It is well settled in this Circuit that "`[m]ere conclusions and unsupported allegations are legally insufficient to create a dispute to defeat summary judgment.'" Jackson, 41 F. Supp.2d at 1308-09 (quotingBald Mountain Park. Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)); see also GJR Investments. Inc. v. County of Escambia, Florida, 132 F.3d 1359, 1367-68 (1st Cir. 1998) (holding that "[b]are allegations that `other' applicants, even `all other' applicants, were treated differently do not state an equal protection claim"); Strickland v. Alderman, 74 F.3d 260, 264-65 (11th Cir. 1996) (holding that plaintiff failed to make a prima facie showing that he was similarly situated when he presented no evidence that other property owners violated a standing water ordinance as "egregiously" as he did). Accordingly, the Roberts, having failed to submit evidence to support their equal protection claim, cannot proceed on that claim.
C. State Law Claims
The Roberts have included in their complaint claims for fraud and misrepresentation under Alabama law. Because the Court is granting summary judgment in favor of the City as to all federal claims contained in the complaint and the remaining claims involve the interpretation and application of Alabama statutory and common law, the Court will dismiss the Roberts state law fraud claims pursuant to 28 U.S.C. § 1367.
III. Conclusion
For the reasons set forth above, the Court finds that the City of Orange Beach is entitled to summary judgment in its favor with respect to the federal due process and equal protection claims asserted by the Roberts. The Court further finds that it is appropriate to dismiss the state law fraud claims asserted by the Roberts pursuant to 28 U.S.C. § 1367. Accordingly, it is ORDERED that the motion for summary judgment filed by the City of Orange Beach be and hereby is GRANTED as to all federal due process and equal protection claims asserted by the Roberts. It is further ORDERED that all state law claims asserted by the Roberts are voluntarily DISMISSED pursuant to 28 U.S.C. § 1367.