City of Tucson v. Whiteco Metrocom, Inc.

Citations: 983 P.2d 759; 194 Ariz. 390Docket: 2 CA-CV 98-0064

Court: Court of Appeals of Arizona; April 14, 1999; Arizona; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The City of Tucson appealed a trial court judgment that deemed its "vacant lot" ordinance unenforceable against Whiteco Metrocom, which had erected billboards on undeveloped land prior to the ordinance's enactment. The court ruled that four billboards were not subject to removal while Whiteco cross-appealed an order to remove eleven billboards. The case centered on whether these billboards violated Tucson Code 3-59 (a)(6)(b) and whether they had lost protection under the nonconforming use statute, A.R.S. 9-462.02. The trial court had granted partial summary judgment in favor of Whiteco, ruling that A.R.S. 9-462.02(B) protected Whiteco from the enforcement of the vacant lot ordinance. The ordinance, enacted in 1985, prohibits billboards on developed property and requires their removal before issuing occupancy certificates for development on undeveloped parcels. Following a federal lawsuit by Whiteco that led to a Ninth Circuit ruling affirming the ordinance's constitutionality, the Arizona legislature enacted A.R.S. 9-462.02(B) in 1994 to prevent municipalities from conditioning permits on the removal of existing nonconforming advertising uses without compensation. The appellate court affirmed parts of the trial court's ruling but vacated and remanded other aspects for further proceedings.

The City initiated a lawsuit against Whiteco to remove billboards, asserting that subsection (B) of a new ordinance could not retroactively prevent enforcement of Tucson Code 3-59 (a)(6)(b) regarding properties developed after the ordinance's enactment but before subsection (B) became effective. Whiteco countered, claiming subsection (B) prohibited enforcement of the code against the billboards since the City’s case had not been adjudicated before subsection (B) took effect. The trial court ruled in favor of Whiteco and denied the City's motion.

On appeal, the City attempted to introduce new arguments, primarily asserting that subsection (B) should not apply retroactively because building permits were issued before its effective date. The appeal included claims that subsection (B) infringes on the City's vested rights and conflicts with Arizona's judicial policy and the separation of powers doctrine. However, the court noted that only the vested rights argument was previously raised, and therefore, it declined to consider the other new arguments.

The court reviewed the applicability of subsection (B) de novo, stating that if it impairs the City's vested rights, it operates retroactively. Generally, statutes do not apply retroactively unless explicitly stated by the legislature, with exceptions for procedural statutes that do not affect vested rights. The court emphasized that municipalities do not possess vested rights regarding their powers, as the state legislature holds extensive authority to modify or revoke those powers. Consequently, the City has no vested rights in its zoning powers, which are derived solely from the state, allowing for changes through subsection (B).

The City references *In re Dos Cabezas Power District* to argue that municipalities can possess vested rights; however, this case addressed the vested rights of individuals forming a power district, not the rights of the municipality itself. The ruling does not support the notion that cities have vested rights in powers granted by the state. In *Brown Wholesale Electric Co. v. H.S. Lastar Co.*, the principle is established that the legislature cannot enact laws that retroactively impair contractual obligations or deprive citizens of vested rights. Consequently, the City has not demonstrated that it has vested rights in state-derived powers.

Moreover, a cause of action that relies solely on a statute is not considered a vested right under the Constitution. The City’s case hinges on A.R.S. 9-462.01, and similar precedents indicate that an action dependent on a statute ceases if that statute is modified or repealed unless a final judgment is rendered prior to such changes. The modification in A.R.S. 9-462.02(B) limits the City's authority to remove billboards, stating that removal can only occur through purchase, condemnation, or relocation, thereby nullifying the City's power to enforce its vacant lot ordinance regarding billboard removal.

Since the City did not finalize its lawsuit before subsection (B) took effect, it lost the ability to pursue billboard removal under Tucson Code 3-59 (a)(6)(b). The conclusion is that the City lacks vested rights under A.R.S. 9-462.01 or 9-462.02, and filing the lawsuit did not transform its cause of action into a vested right. Thus, the court's partial summary judgment in favor of Whiteco on this matter was deemed appropriate.

Additionally, regarding a specific billboard at 2844 North First Avenue, the City argues that the trial court incorrectly ordered the removal of only the second advertising face instead of the entire billboard. The billboard, initially permitted as a single face, became a nonconforming use after the City's sign code amendments prohibited certain billboard placements. Whiteco added a second face without obtaining the necessary permit, leading to the court's decision.

The City claims that the billboard lost its nonconforming use status due to the addition of a second advertising face, which it argues constitutes a substantial change and effectively creates an illegal sign. Whiteco counters that the Tucson Code permits billboards to have two faces, asserting that the question is whether the property remained unchanged or if the addition was a reasonable repair or alteration. The law protects property owners if their property remains unchanged following a zoning ordinance that establishes a nonconforming use. Whiteco concedes that the expanded billboard does not qualify for protection under A.R.S. 9-462.02 and does not argue that the expansion was a reasonable alteration. The key issue is whether the trial court’s remedy of removing the second face was appropriate. 

While the addition of the second face is deemed an impermissible expansion, the Tucson Code does not mandate removal of a billboard simply because it has been expanded. The ordinance differs from one cited by the City, which required removal of any enlarged nonconforming billboard. The trial court was within its rights to order the removal of only the second face, allowing the original billboard to remain without altering its nonconforming status or extending its lifespan. 

In equitable relief cases, the trial court's discretion in remedy selection is respected. Since neither the Tucson Code nor A.R.S. 9-462.02 prohibited the trial court's decision, it did not abuse its discretion by ordering the removal of just the second face. 

The City also contests the trial court's decision regarding three billboards that were allowed to remain since they were constructed in accordance with approved permit specifications, arguing that the City cannot be estopped from removing billboards in illegal locations. The City references the case of Outdoor Systems v. Arizona Department of Transportation, which holds that billboards in illegal locations do not acquire vested rights. However, even if Whiteco could not obtain vested rights due to potential violations of building or zoning regulations, this does not prevent the trial court from estopping the City from claiming the permits were issued in violation of those regulations.

Equitable estoppel consists of three elements: 1) acts by the party to be estopped that are inconsistent with a later adopted position; 2) reliance by the other party; and 3) injury to the relying party due to the first party's repudiation. While the City argues that the government cannot be estopped when acting in its governmental capacity, Arizona's supreme court has allowed estoppel against a sovereign when justice warrants it, despite the general caution required. To estop the City, the trial court must find the three elements of estoppel present, that serious injustice would result from the City's actions, and that public interest would not be unduly harmed. This involves analyzing various factors for each billboard, such as long-term leases, investments, benefits from use, the presence of other billboards, neighborhood character, and the nature of the alleged zoning violations. The trial court's findings did not adequately address these issues, preventing upholding its judgment of estoppel regarding the permits for three billboards. Consequently, the case is remanded for further findings. If the trial court finds no estoppel for any or all billboards, it must then determine if the billboards violated existing zoning or building codes before ordering their removal. Additionally, Whiteco argues that the trial court erred in requiring the removal of eleven billboards, asserting that the City should be estopped from seeking their removal or that modifications made did not warrant removal. The appellate court will defer to the trial court's factual findings unless clearly erroneous, while legal questions are reviewed de novo.

Estoppel cannot be applied to prevent the City from seeking the removal of challenged billboards, as Whiteco constructed or modified these billboards in violation of permits, thus terminating their nonconforming use status. The trial court found that Whiteco's actions negated any reliance on the City’s inaction regarding the billboards, aligning with established legal principles that deny estoppel in cases of misconduct.

Whiteco also contested the trial court's order to remove two billboards that were altered from a twin I-beam support structure to a uni-pole structure without a permit. The City’s sign code prohibits modifications to nonconforming signs unless compliant with the code. Whiteco claimed this alteration constituted a "reasonable repair" under A.R.S. 9-462.02, but precedent from Gannett Outdoor Co. v. City of Mesa indicated that such structural changes do not qualify as reasonable repairs. The court reaffirmed that the complete replacement of a billboard's support structure is not considered a minor repair. Since the modifications were substantial and violated the city's regulations, the billboards lost their nonconforming status, and the trial court's order for removal was deemed correct. Public policy underscores the necessity of eliminating nonconforming uses, supporting the trial court's decision.

Whiteco contends that relocating billboards within the same parcel does not affect their nonconforming use status, referencing Tucson Code 3-91, which prohibits moving nonconforming billboards unless they comply with the sign code. The billboards in question do not comply, indicating they lost their nonconforming status unless protected under A.R.S. 9-462.02. Whiteco cites Outdoor Systems v. City of Mesa to argue that A.R.S. 9-462.02 protects the entire parcel, allowing relocation. However, the Outdoor Systems court clarified that changes in use on any part of the parcel could result in losing nonconforming status, emphasizing the public policy against nonconforming uses.

Whiteco attempts to distinguish this case from People ex rel. Department of Public Works v. Ryan Outdoor Advertising, which concluded that moving a billboard within the same parcel caused a loss of nonconforming status. Whiteco argues that the California statute interpreted in Ryan is different from Arizona law, yet Tucson Code 3-91 similarly prohibits the movement of nonconforming signs. A.R.S. 9-462.02 does not prohibit new placements but allows reasonable repairs and alterations, with Ryan Outdoor asserting that relocating a billboard exceeds these protections. Additionally, the ruling in Gannett suggests that even minor relocations violate the sign code and are not safeguarded by A.R.S. 9-462.02.

The City maintains its authority to prohibit such relocations, and the trial court correctly determined that moving the signs constituted neither a reasonable repair nor alteration of the nonconforming use. The trial court's judgment is vacated and remanded concerning billboards at specific locations while affirming the judgment in all other respects. The text concludes with notes on the complexity of retroactivity in legal changes, indicating Whiteco's arguments have merit but are not the basis for the decision.

Whiteco did not provide authority or specific record references to support its argument, violating Rule 13 of the Arizona Rules of Civil Appellate Procedure. The Tucson Code's prohibition on alterations conflicts with A.R.S. 9-462.02, but the City contends that the addition of a second billboard face is an expansion rather than an alteration, referencing Sienerth. Whiteco failed to specify which arguments pertained to the cross-appeal in its Combined Answering Brief and Opening Brief. Additionally, aside from an estoppel claim, Whiteco has not challenged the removal of six specific billboards on appeal. Whiteco's assertion that Gannett's case is distinguishable due to procedural history is based on a misinterpretation of Gannett's unrelated discussion about jurisdiction. Importantly, Gannett concluded that replacing a multipole billboard structure with a mono-pole of the same dimensions does not qualify as a "reasonable alteration" under A.R.S. 9-462.02, emphasizing that changes to the structural support system are not considered reasonable alterations.