April v. City of Broken Arrow

Citations: 775 P.2d 1347; 1989 WL 42654Docket: 66469

Court: Supreme Court of Oklahoma; July 12, 1989; Oklahoma; State Supreme Court

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The Supreme Court of Oklahoma addressed whether the adoption of two municipal land-use ordinances constituted a permanent "taking" of property without just compensation, violating constitutional rights. The case involved Paul April, M.D., who owned 40 acres of agricultural land in Broken Arrow, Oklahoma, located within a 100-year flood plain. April purchased the property for investment and intended to develop it. Although the city had not physically intruded on his land or altered the natural water flow, it had denied his requests for zoning changes that would have allowed for higher-density development.

Initially granted R-2 zoning, which allowed for residential development, April's attempts to rezone to higher-density designations were rejected multiple times by the city's planning commission and later by the City Council. Additionally, April sought a waiver from the floodplain ordinance but was denied. The city subsequently enacted two ordinances regulating development within the floodplain and controlling excavation and earth modifications, both of which took immediate effect. The core legal issue is whether these regulations significantly hindered April's use and enjoyment of his property in a manner that would constitute a taking under constitutional law.

On May 1, 1978, the city council denied Owner's request for rezoning, prompting Owner to file an inverse condemnation suit in December 1978. Owner claimed that the city's land-use ordinances restricted his property to "Flood Tolerant Land Uses" and allowed building permits for other developers in the flood plain, effectively appropriating his land for public use as part of a municipal stormwater drainage system. He argued that the city's actions limited his land's use to public purposes, hindered his ability to utilize it as a horse pasture, and destroyed his reasonable investment-backed expectations.

At trial, Owner contended that his property was in the path of future city projects, such as a public park and detention reservoir. He asserted that the city's land-use ordinance rendered his property economically worthless, supported by a commission report valuing the damages at $240,000. The City countered that its land-use ordinance did not constitute substantial interference with Owner's property because flooding was a natural occurrence, and that Owner had not applied for or been denied a building permit, indicating he had adequate legal remedies. The city sought dismissal of the case, claiming a lack of justiciable issue.

The jury ultimately ruled in favor of Owner, awarding him $240,000, and the trial court subsequently granted attorney and trial-related fees against the City. The appeal raised two main issues: whether the city's flood plain ordinance constituted a taking of property without just compensation and whether the exhaustion of administrative remedies doctrine barred judicial review. The City argued that a prior case, Mattoon v. City of Norman, was distinguishable from this case, while Owner maintained that it was relevant to the appeal's outcome. The court found it necessary to further clarify its reasoning in the Mattoon decision, as it had previously been unable to address the merits of the "taking" issue in that case.

Landowner initiated a class action for inverse condemnation against the city, claiming that the city's flood plain ordinance was adopted unreasonably, that the city failed to maintain its drainage system, and that it diverted surface waters onto the landowner's property, causing flooding. The trial court upheld the city's demurrer, concluding the ordinance was a valid exercise of police power. The court clarified that a valid flood plain ordinance does not automatically constitute a taking; instead, a taking requires sufficient interference with property use and enjoyment. The court recognized that governmental regulations could be deemed a taking if there is an overt act asserting control over the property. 

Landowner's claims included allegations of a regulatory taking due to the ordinance excessively impairing property value and a physical taking from the city's actions of diverting water and neglecting drainage maintenance. The appellate court reversed the trial court's decision, stating that merely affirming the ordinance's validity without addressing due process did not eliminate compensation rights. It found that landowner's petition raised factual questions about the reasonableness of the water diversion, surviving the city's demurrer. The court determined that the available administrative remedies, such as appeals or variances, were insufficient due to ongoing flooding, the nature of the factual issues, and the lack of a remedy for compensation regarding a governmental taking. 

The analysis emphasized the significance of the nature of governmental actions and types of takings claimed, noting that local governments must enact land use measures to participate in the National Flood Insurance Program. The city's exercise of police power, aimed at public welfare, restricts the landowner's use of property, balancing private rights against reasonable regulations necessary for community health and safety.

Owner claims his property value dropped from $280,000 to $40,000 due to the City's actions to appropriate it for a regional detention pond. While value comparisons before and after regulatory actions are relevant, they are not definitive. The argument that Owner has a constitutional right to leave his land vacant without value impairment is rejected. Citing Justice Holmes, the document emphasizes that the government can diminish property values without compensation, as some property rights come with implied limitations that yield to police power, but these limitations must have boundaries to protect contract and due process rights.

The extent of value diminution is critical; significant decreases typically necessitate eminent domain proceedings and compensation. However, the Owner's assertion that the City appropriated his property for public use as a detention reservoir is unsupported by evidence. The City has not acquired any property interest, physically invaded the land, or proposed any construction that affects water flow over it. Owner acknowledged that the City has not caused increased water flow onto his property, which floods naturally after heavy rain—an occurrence outside the City's control.

Even if Owner’s claims were validated, future plans for potential public use related to flood control do not constitute a cause of action for inverse condemnation. The document reiterates that constitutional takings are determined by actions rather than intentions. Recognizing the need for reasonable flexibility in land use planning, the court concludes that the City's actions serve legitimate goals such as reducing risks to life and property, protecting public health, preserving the environment, and enabling landowners to develop their properties within flood-prone areas.

The court affirms that the City's land-use ordinances are valid exercises of police power, but this does not preclude the possibility of compensation for any actual property damage or taking, as established in prior case law. The focus then shifts to whether Owner has been denied economically viable use of his land.

Owner claims a "regulatory taking" of property without a final administrative decision on the City's land-use ordinances, leading the City and its supporters to contest the appellate jurisdiction and the trial court's authority, arguing that the claim is premature. They emphasize that a definitive determination of permitted development on the property is essential before such a claim can be asserted. Owner incorrectly asserts a lack of "adequate" legal remedy and argues that the development of 120 homesites was allowed under prior zoning, which the City’s ordinances now conflict with. Owner sought a variance to reduce homes from 120 to 88 and requested the repeal of the ordinance's effects on his property, but failed to submit a development plan or obtain a clear statement from the City regarding permissible dwelling units, even under specific flood elevation considerations. The City's ordinances do not prevent the beneficial use of the property, which remains zoned for single-family dwellings. Notably, Owner has never applied for a building permit or a variance under established procedures. The record indicates that an 88-lot sketch plat was submitted during a rezoning appeal, but Owner's request for a waiver or variance was not substantiated. The City's refusal to rezone does not constitute a taking, and the record suggests that development options remain available under the ordinances. Owner's attempt to bypass the administrative process is invalid, as Oklahoma law necessitates exhausting administrative remedies before seeking judicial intervention unless a strong case for inadequacy is made.

The court asserts its jurisdiction to examine the appropriateness of its authority and that of the originating court. It concludes that it cannot address disputes regarding the application of the city's land-use ordinances to the owner's property until a final administrative decision is made by the city manager, and its impacts are realized by the owner. The court references the U.S. Constitution, indicating that only extreme regulations can constitute a regulatory taking. Citing *United States v. Riverside Bayview Homes, Inc.*, it explains that the mere assertion of regulatory authority does not equate to a taking. The existence of a permit system suggests that landowners may still use their property if permission is granted, and even a denial does not constitute a taking unless it eliminates all economically viable use of the land.

The trial court lacked a justiciable issue regarding the owner's claim of regulatory taking since the owner did not apply for necessary permits and did not exhaust available administrative remedies. Furthermore, the owner failed to demonstrate that pursuing these remedies would be futile. The court notes that despite the city denying the owner's zoning applications, other viable uses for the property remain. Importantly, the owner purchased property in a flood-prone area, meaning flooding would occur regardless of the city's actions. Consequently, the judgment of the trial court is reversed, and the case is remanded with instructions to dismiss the owner's complaint for lack of a justiciable issue. The opinion includes concurrence and partial dissent from various justices. The excerpt also references constitutional protections against property deprivation and eminent domain procedures in Oklahoma law.

The City of Tiburon's planning commission has consistently denied the owner's petitions for increased zoning intensity on the grounds that such applications conflict with the City’s comprehensive plan, which designates higher zoning intensity only at arterial street intersections, with a decrease in intensity further away. The owner’s property is located beyond a quarter mile from such intersections and is classified as R-2 single family development. Additionally, the property is identified as flood-prone based on studies from the Flood Insurance Administration and the U.S. Army Corps of Engineers. 

The owner's attorney submitted an affidavit asserting that an upcoming ordinance would label the property as a 'restricted area' prohibiting construction, which the attorney argued could constitute a 'taking' of property. The Mayor suggested that the ordinance should be legally challenged. The City’s floodplain ordinance, enforced by the city manager, restricts development within the 100-year flood plain and mandates that any significant land alterations require a permit. The ordinance is designed to safeguard public health and safety against flooding risks and outlines flood-tolerant land uses, such as parks and agricultural activities.

Landowners can appeal decisions to the floodplain appeal board and the city council. Once property is elevated out of the flood plain, its use is no longer restricted, although a building permit is still necessary for development. The owner has also raised claims for inverse condemnation, trespass, and seeks injunctive relief and declaratory judgment. Legal precedent indicates that mere regulatory jurisdiction by a governmental body does not equate to a constitutional taking, and fluctuations in property value due to legislation or projects are considered normal incidents of ownership, not a taking.

Mere fluctuations in property value during governmental decision-making are considered 'incidents of ownership' unless there is an extraordinary delay. Preliminary governmental actions that lead to depreciation of property value do not impose liability on the government. While property can be regulated, excessive regulation constitutes a taking, which is a matter of degree. Physical invasions, such as flooding, that eliminate all property use are typically classified as takings, requiring compensation. A strong public desire for improvement does not justify circumventing constitutional compensation requirements. If governmental actions result in a total taking of property use, the government is obligated to compensate for the duration of that taking. Legislation allowing for property condemnation does not itself constitute a taking, as it can be altered or repealed. The city argues there was no demonstrable loss in property value due to land-use ordinances, asserting that claims of damage were based on the incorrect premise that the property could not change from its current use as a horse pasture. The court cannot uphold a district court's decision that exceeds legal jurisdiction based on the issues presented.