Bradley v. Payson City Corp. , 17 P.3d 1160 ( 2001 )

OPINION

GREENWOOD, Presiding Judge:

11 Payson City appeals the trial court's reversal of the City Council's decision denying plaintiffs' request to change the zoning of their property. The trial court determined the City Council's decision was arbitrary and capricious because it was not supported by any evidence other than public opinion. We reverse.

BACKGROUND

12 This appeal involves property in Pay-son City, Utah, zoned for the most part R-1A, which is a low density residential agricultural zoning with minimum lot size of one acre. The property is located west of Interstate Highway 15 and is abutted on four sides by property zoned for industrial use. The General Plan for Payson City identifies mostly residential land use east of I-15 and industrial and agricultural property west of I-15. Plaintiffs, however, note that some of the property west of I-15 is now zoned for residential housing and that the Payson Planning Zone Map anticipates large areas zoned for residential use west of I-15. Furthermore, the General Plan encourages a mixture of residential densities, including low, medium, and high density housing.¹

13 In January 1999, David 8. White, on behalf of several landowners, applied to Pay-son City to have property changed from R-1-A to R-2-15, high density multifamily residential zoning (the White application). The Planning Commission held a public hearing on March 20, 1996 to receive public comment on the proposal. Prior to the public hearing, thirty-eight property owners in the area of the proposed change presented the Planning Commission a signed petition opposing the change. During the hearing, the Commission heard public comment both for and against the zoning change. Specifically, thirteen individuals spoke in opposition to the White application while five spoke in favor of the change-four of these proponents had an interest in the subject property. Public opposition included concerns over maintaining the agricultural nature of the area, including using the land for large animals, and also concerns over infrastructure. The Planning Commission ultimately recommended that the City Council deny the White application.

14 Following the Planning Commission meeting on March 20, the City Council met and heard public comment. During this public hearing, the Council heard concerns similar to those raised before the Planning Commission, and also heard concerns about traffic in the area if the zoning change was approved. Advocates of the application expressed the need the area had for low income housing. Based upon the General Plan, traffic concerns, and the Planning Commission's recommendation, the City Council voted to deny the White application.

T5 In addition to the White application, another property owner, Louis Peterson, a plaintiff in this action, filed a zoning change application on March 8, 1996, requesting that his and other's property be changed from R-1-A to R-1-9, medium density residential (the Peterson application). The Peterson application stated that the one acre minimum lot size was too large for the owner's needs.

T 6 A public hearing on the Peterson application was held on May 22, 1996. During this hearing, some of the neighboring businesses expressed concern that the existing industrial use of neighboring property would be incompatible with a change to higher density residential zoning. Specifically, Associated Foods, which runs a warehouse in the area, feared that new residents would seek action to prevent its trucks from operating twenty-four hours a day. Another business expressed concerns that residents would object to the noise and smell from its packing facility. Subsequently, the City Council denied the Peterson application.

1 7 Plaintiffs commenced this action in district court on April 7, 1997, claiming that Payson City had wrongfully denied their rezoning requests. During a hearing on the parties' cross motions for summary judgment, the trial court expressed concern that the record did not contain any basis for the City Council's decision to deny the applications. The trial court requested that Payson City prepare findings setting forth the reasons for its denial. The City prepared written findings which detailed the public comment received during the public hearings. The trial court issued a Memorandum Decision and Order reversing the City Council's decision, determining that the Council had acted arbitrarily and capriciously because its decision had no evidentiary support other than public opposition. Payson City appeals.

MOTION FOR CERTIFICATION AND APPELLATE JURISDICTION

18 As a preliminary matter, we address plaintiffs' motion to certify this case to the supreme court. Payson City initially appealed directly to the supreme court. In its docketing statement, Payson City stated that the supreme court had original appellate jurisdiction to hear the appeal under Utah Code Ann. § 78-2-2(8)(j) (1999)² By its own motion, the supreme court transferred the case to this court pursuant to Rule 44 of the Utah Rules of Appellate Procedure. The supreme court stated that it was transferring the case because the appeal was "taken from an order, judgement or decree of a court in a case that is not within the original appellate jurisdiction of the Utah Supreme Court."

T9 Based on the parties' comments at oral argument and our own actions in a similar case,³ apparently some confusion exists over which court has original appellate jurisdiction over a district court's review of a city council's decisions on zoning issues. As counsel for Payson City noted at oral argument, none of the provisions of Utah Code Ann. § 78-2a-8 (1996), the statutory description of the court of appeals' jurisdiction, specifically assign this court original appellate jurisdiction over cases of this nature. The supreme court, however, seems to have consistently determined that it does not have original appellate jurisdiction over zoning cases under the catch-all provision found in section 78-2-2(8)(J). Accordingly, this court must have jurisdiction. Examining section 78-2a-8, the only provision that could apply is subsection (2)(b)(i) which gives this court jurisdiction over "appeals from the district court review of adjudicative proceedings of agencies of political subdivisions of the state or other local agencies...." Utah Code Ann. § 78-22-3(2)(b)(i) (1996). As Payson City's counsel noted, however, this case does not arise from an "adjudicative" proceeding, but rather a legislative proceeding. Nevertheless, in order to effectuate the supreme court's order transferring these appeals to this court, "adjudicative" must be read broadly to include both administrative and legislative proceedings of state political subdivisions and local governments. Thus, read in conjunction with section 78-2-2, governing the supreme court's jurisdiction, section 78-2a-83(@)(b)G) confers original appellate jurisdiction to this court over this matter.

10 This case was not transferred to us pursuant to Utah Code Ann. § 78-2-2(4) (1996), sometimes referred to colloquially as a "pour over," but rather was an administrative transfer pursuant to Rule 44 of the Utah Rules of Appellate Procedure, which requires that a timely appeal "pursued in an appellate court that does not have jurisdiction in the case" be transferred to the proper appellate court. In this case, however, we decline to recommend certification. See Utah R.App. P. 48 (requiring an "affirmative vote of four judges of the court").

ISSUES AND STANDARDS OF REVIEW

111 The initial issue we must determine is the proper standard of review for both the trial court and this court. Applying that standard of review, we must next determine whether the trial court erred in reversing the City Council's decision. These issues present questions of law, which we review for correctness. See State v. Pena, 869 P.2d 932, 936 (Utah 1994).

ANALYSIS

A. Proper Standard of Review

112 In this case, the parties vigorously dispute the proper standard of review. Neither party, however, disputes that two recent cases govern the issue. Additionally, neither party disputes that the Payson City Council's decision was legislative rather than administrative.

113 In Springville Citizens for a Better Community v. City of Springville, 1999 UT 25, 979 P.2d 332, the supreme court reviewed a city's approval of a Planned Unit Development (PUD). In that case, the court applied the substantial evidence standard to the city's decision. See id. at 124. The court determined that the city had acted illegally in approving the PUD because it had failed to follow its own city ordinances. See id. at 130. Importantly, in Springville Citizens, the court did not discuss whether it viewed the City of Springville's decision as administrative or legislative. Rather, the court merely stated that a municipality's land use decisions are traditionally afforded great deference, but are arbitrary and capricious when not supported by substantial evidence. See id. at M1 28-24.

114 Subsequently, this court reviewed Draper City's decision to deny a zoning change application. See Harmon City v. Draper City, 2000 UT App 031, ¶ 7, 997 P.2d 321. In Harmon City, we reviewed the case law and the statutory history governing the arbitrary and capricious standard as it applied to land use decisions. See id. at 118-25. This court concluded that the enactment in 1991 of Utah Code Ann. § 10-9-1001(3) ⁴ largely codified earlier case law and "did not alter the deferential review of a municipality's legislative zoning classification decisions under the arbitrary and capricious standard." Id. at 114.

1115 Significantly, Harmon City interpreted Springville Citizens to still differentiate between administrative and legislative proceedings. See id. at 119. This court determined that Springville Citizens involved judicial review of an administrative proceeding governed by city ordinances that expressly limited the city's discretion over PUD approvals See id. at 1121-28. In contrast, Harmon City involved a request to change the city's zoning which is governed only by section 10-9-1001(8). See id. at 1 21. In other words, this court distinguished Springville Citizens because it involved an administrative proceeding which has traditionally been reviewed under the substantial evidence standard, whereas Harmon City addressed a legislative proceeding traditionally reviewed under the reasonably debatable standard. See id. at 125. Thus, according to Harmon City, the reasonably debatable standard must be applied when reviewing a municipality's legislative decisions. See 1d. Both the substantial evidence and reasonably debatable standards, however, are alternative aspects of the arbitrary and capricious standard of review. See id. at 1415, 26. Thus, a municipality's decision is always reviewed under the arbitrary and capricious standard; however, under that standard, an administrative proceeding is viewed non-deferentially under the substantial evidence standard, while a legislative proceeding is viewed deferentially under the reasonably debatable standard.

{16 Nevertheless, plaintiffs argue that Harmon City's interpretation of Springville Citizens was wrong because the supreme court clearly abandoned the differing standards of review for municipal land use decisions and adopted a "one-size-fits-all" standard, requiring review of all municipal land use decisions under the substantial evidence standard regardless of whether they are administrative or legislative. Thus, according to plaintiffs, we are required by Springville Citizens to apply the substantial evidence standard. We disagree.

117 As we noted, this court has interpreted the supreme court's opinion in Springville Citizens to still require that legislative land use decisions of municipalities be reviewed under the reasonably debatable standard. See id. Onee a panel of this court has decided an issue of law, subsequent panels are bound by the earlier panel's decision. See State v. Menzies, 889 P.2d 393, 399 n. 3 (Utah 1994) (stating horizontal stare decisis requires adherence to decisions of prior panels in most instances);⁵ State v. Thurman, 846 P.2d 1256, 1269 (Utah 1993) (holding "stare decisis has equal application when one panel of a multi-panel appellate court is faced with a prior decision of a different panel"). Thus, despite plaintiffs' urging that we abandon the rule pronounced in Harmon City and follow what they view is the clear holding of Springville Citizens, "'we are not at liberty to overrule our prior holding." State v. Ostler, 2000 UT App 028, ¶ 7, 996 P.2d 1065, (citation omitted), cert. granted, 9 P.3d 170 (Utah 2000).⁶ Because there is no dispute that the Payson City Council's decision was legislative, we apply the reasonably debatable standard as mandated by Harmon City.

B. Application of the Reasonably Debatable Standard

{18 Although the parties do not dispute what standard the trial court applied, the trial court's Memorandum Decision does not state that it applied the substantial evidence standard. The trial court reversed the City Council's decision because, although the reasons may have been legally sufficient, they were not supported by any factual basis. The trial court relied on Davis County v. Clearfield City, 756 P.2d 704 (Utah Ct.App.1988) to support its decision. The Davis County opinion, however, addresses the denial of a conditional use permit, which is an administrative proceeding reviewed under the substantial evidence standard. See 1d. at 711. In Davis County, we held that under the substantial evidence standard, public opinion cannot be the sole basis for denying a conditional use permit. See id. Thus, it appears the trial court erred by applying the substantial evidence standard applicable to administrative proceedings, rather than the reasonably debatable standard applicable to legislative decisions. Nevertheless, we could affirm the trial court's ruling if we determined that under the more deferential standard applicable to this case, the city's decision was not reasonably debatable and therefore was arbitrary and capricious, or that the city's decision was illegal because it was either procedurally flawed or inconsistent with a statute. See State v. Jarman, 1999 UT App 269, 15 n. 2, 987 P.2d 1284 (holding we may affirm trial court's ruling on any alternative ground even though that ground or theory was not identified by lower court as basis for its ruling).

T19 Although the trial court ordered Payson City to prepare written findings to support its decision, the record reflects that the trial court did not receive any additional evidence not adduced before the City Council. At oral argument, plaintiffs argued that our review is limited to only the evidence submitted in reference to the White application because the trial court's decision only referenced the White application. The initial appeal to the district court, however, was on behalf of both the White and Peterson applications. When a lower court reviews a municipality's land use decision and takes no additional evidence, "we review the [municipal land use decision] just as if the appeal had come directly from the [municipality]. Davis County, 756 P.2d at 710. In other words, we review the trial court's decision de novo, and we are free to consider all the evidence contained in the record. See id. Furthermore, the trial court ordered Payson City to prepare written findings from its public hearings. The evidence which plaintiffs claim is not properly before us is referred to in the findings prepared by Payson City at the trial court's request.⁷ Because the trial court relied on these findings to make its decision, we may also review these findings to determine whether the city council acted arbitrarily or capriciously.

¶ 20 Turning to the merits of this appeal, we must review the Payson City Council's decision under the deferential reasonably debatable standard of review. See Harmon City, 2000 UT App 031 at ¶ 25, 997 P.2d 321. As noted, this standard is highly deferential to the municipality's decision: "If the [zoning] ordinance and the stated policies and reasons underlying it do, within reason, debatably promote the legitimate goals of increased public health, safety, or general welfare, we must allow [the city's] legislative judgment to control." Smith Inv. Co. v. Sandy City, 958 P.2d 245, 253 (Utah Ct.App. 1998) (footnote omitted). . Traditionally, courts have granted this high degree of deference due to the political nature of zoning decisions. Unlike administrative proceedings which turn almost exclusively on the evidence presented, zoning decisions require municipalities to weigh competing interests and conflicting concerns to arrive at a decision that serves the general welfare of its residents. See, eg., Harmon City, 2000 UT App 031 at ¶ 18, 997 P.2d 321 (stating "zoning classifications reflect[ ] a legislative policy decision with which courts will not interfere except in the most extreme cases"). Thus, in order to prevail, plaintiffs have the burden of showing that Payson City's decision to continue to use "the property for [low density residential and agricultural] purposes could not promote the general welfare." Id. at 4[ 28; see also Smith Inv. Co., 958 P.2d at 252 (holding court will uphold zoning ordinance decision " 'if it is reasonably debatable that it I3 is in the interest of the general welfare. (citation omitted)).

121 The Payson City Council stated three reasons for denying the zoning change applications: (1) the zone change would be contrary to the General Plan, (2) the zone change could create traffic problems relating to the existing industrial park, and (8) the Planning Commission recommended the applications be denied. In reversing the City Council's decision, the trial court determined that, although legally sufficient, these reasons were not supported by any factual basis.

122 The trial court relied on Davis County in making its ruling and stated that public opposition alone cannot be the sole basis for denying the zoning change. See Davis County, 756 P.2d at 711. Although public opposition cannot be the sole basis for making a land use decision in an administrative proceeding, see id., this case involves a legislative proceeding. As we stated in Harmon City, "a city may rely on the concerns of interested citizens when performing legislative functions." Harmon City, 2000 UT App 031 at ¶ 26, 997 P.2d 321. Furthermore, we stated that "the public clamor doctrine has no application when a legislative body acts in a legislative capacity." Id. at T 27.

123 In this case, the record reveals that virtually all the material presented to the Planning Commission and to the City Council consisted of public comment both for and against the zoning change and presentation of the General Plan and the Planning Zoning Map. Our review of the record in this case indicates that the City Council properly considered the public comment and came to a reasonable decision based on the information before it. Specifically, two businesses in the area expressed concern over the compatibility of higher density residential areas with their businesses and the neighboring industrial zones. One of the businesses submitted a letter detailing why it located in the area. This business stated it was attracted to the area because the "master plan ... was far sighted enough to separate the industrial area from the residential area by a natural break." The business stated that it operates twenty-four hours a day with "bright dock lights, and large trucks ... [all of which would be a concern for the future residential area that is proposed." Another businessman in the area testified that because his business was contiguous to the proposed zone change he felt he would be out of business within a year because neighboring residents would not tolerate the noise and smell from his fruit processing plant.

124 As we have previously discussed, "a basic purpose of traditional zoning is ' "to minimize conflicts between incompatible uses."'" Smith Inv. Co., 958 P.2d at 254 n. 13 (citation omitted). The potential incompatibility of industrial and residential land uses hardly needs comment. Nevertheless, we explained:

"The exelusion of places of business from residential districts is not a declaration that such places are nuisances or that they are to be suppressed as such, but it is a part of the general plan by which the city's territory is allotted to different uses, in order to prevent, or at least to reduce, the congestion, disorder, and dangers which . often inhere in unregulated municipal development."

Id. at 254 (quoting Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 391-93, 47 S.Ct. 114, 119-20, 71 L.Ed. 303 (1926)).

125 Faced with the concerns raised by businesses in the area, the City Council's action was at least reasonably debatable. A city acts well within its mandate when it creates specific areas of industrial and residential zones to prevent incompatible uses from neighboring one another. Plaintiffs did not produce any testimony or other evidence to contradict the public concern that proposed residential zones would conflict with the existing industrial zones.

126 Additionally, several residents of the area testified that they opposed the change because they wanted to preserve the area for agricultural uses and to raise large animals. These opponents sought to preserve the open agricultural character of the area. Like the businesses that moved to the area in order to operate without conflicting with neighbors, several residents located there in order to keep horses and other large animals which are not necessarily compatible with medium to high density residential uses. A city can deny a zoning change request if the " 'legislative body has a reasonable basis to believe that it will conserve the values of other properties and encourage the most appropriate use thereof. .. .'" Id. at 255 (citation omitted). In this case, several residents testified about the value of the land as low density agricultural land, and the City could properly seek to preserve the area for such use.

T27 On the other hand, the City Council also heard from residents who supported the change. Several spoke about the benefits of having more affordable higher density housing in the area. Also, one expert in city planning testified on behalf of the zoning change. Jim Wilbert, who has twenty years of experience in city planning, testified that he had reviewed the proposal and believed it would create affordable housing near the industrial park. Assuming a need for affordable housing exists, this testimony does not necessarily refute the concerns raised by those opposed to the change, nor the City's ultimate decision to deny plaintiffs' rezoning request. Specifically, plaintiffs' expert did not show how the higher density residential areas would be compatible with the neighboring industrial uses, nor that the low density agricultural zoning is contrary to the general welfare.⁸

CONCLUSION

128 Under section 78-22-3(2)(b)(G), we have original appellate jurisdiction over appeals from a district court's review of a municipality's land use decisions. Because the denial of plaintiffs' request to rezone property is a legislative act, the proper standard of review is the reasonably debatable standard as stated in Harmon City. In reversing Pay-son City's decision to deny plaintiffs' rezoning request, the trial court incorrectly applied the substantial evidence standard. Applying the proper standard to this case, Payson City's denial of plaintiffs' request was reasonably debatable and not arbitrary, capricious, or illegal.

([ 29 Therefore, we reverse the trial court's decision.

4 80 I CONCUR: WILLIAM A. THORNE, Jr., Judge.

1 . At oral argument, the parties disputed whether the General Plan had been properly adopted. Plaintiffs argued the plan had never been properly adopted by Payson City. The record, however, does not show that plaintiffs ever objected to the General Plan prior to appeal, and, in fact, they cite to the General Plan in their brief to support their argument that a mixture of residential densities is encouraged. Whether or not the General Plan was properly adopted does not affect our disposition of this case.

2 . Section 78-2-2(3)(j) provides: "The Supreme Court has appellate jurisdiction, including jurisdiction of interlocutory appeals, over orders, judgments, and decrees of any court of record over which the Court of Appeals does not have original appellate jurisdiction...." Utah Code Ann. § 78-2-2(3)() (1996).

3 . In Splendor Valley v. Summit County, Case No. 20000277-CA, a case currently pending before us, appellants initially filed their appeal in our court, and we transferred the appeal to the supreme court, believing the supreme court had original appellate jurisdiction pursuant to Utah Code Ann. § 78-2-2(3)(j) (1996). The supreme court, however, transferred the case back to us stating it lacked original appellate jurisdiction, but did not refer in the order to a particular statuiory provision that conferred this court with original appellate jurisdiction over the case.

4 . This statute governs appeals of municipal land use decisions to the district courts. See Utah Code Aun. § 10-9-1001 (1999).

5 . We recognize that the supreme court has noted that "a panel may overrule its own or another panel's decision where 'the decision is clearly erroneous or conditions have changed so as to render the prior decision inapplicable.'" State v. Menzies, 889 P.2d 393, 399 n. 3 (Utah 1994) (citation omitted). However, neither of these exceptions applies in this case because Harmon City is not clearly erroneous and circumstances have not changed since it was issued.

6 . Contrary to the dissent's assertion, we do not believe that we are disregarding the supreme court's controlling authority in favor of relying on horizontal stare decisis. As we stated in discussing which standard of review should be applied in this case, Harmon City interpreted the supreme court's decision in Springville Citizens to still allow different standards of review based on whether a municipality is acting administratively or legislatively. Thus, we are not ignoring vertical stare decisis in favor of horizontal stare decisis. Rather, we believe that Harmon City followed and interpreted the supreme court's decision in Springville Citizens and, as a co-equal panel, we are bound to follow Harmon City. We respect our dissenting colleague's argument that Harmon City wrongly interprets Springville Citizens; however, we do not believe Harmon City is clearly erroneous, see Menzies, 889 P.2d at 399 n. 3, and therefore, we are required to apply it to this case. Whether Harmon City correctly interprets Springville Citizens should not be confused with the mandates of horizontal and vertical stare decisis.

7 . At oral argument, plaintiffs' counsel argued that a letter from Associated Foods was not part of record on this appeal because it only pertained to the Peterson application which the trial court did not address. The letter, however, is referred to in the factual findings prepared by Payson City and relied on by the trial court.

8 . In response to our statement in Harmon City that we found no decisions reversing a municipality's land use decision under the reasonably debatable standard, see Harmon City, 2000 UT App 031 at ¶ 18, 997 P.2d 321, plaintiffs refer us to Hall v. Korth, 244 So.2d 766 (Fla.Dist.Ct.App. 1971) and Kanfer v. Montgomery County Council, 35 Md.App. 715, 373 A.2d 5 (1977). These cases, however, are distinguishable in that in both cases the plaintiffs sought to have their property rezoned in conformity with the neighboring land. See Hall, 244 So.2d at 768; Kanfer, 373 A.2d at 6-7. Further, these cases do not involve the situation where the municipality's decision was supported by public comment in a legislative proceeding.