Lessons Learned from Litigating RealEstate Development Projects

Presented By: Philip W. Bledsoe, Colin C. Deihl,Kelly D. Stohs, David P. Vallas

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Topics

Defeating land use challenges and appealing land use denials

The illusory protections that zoning ordinances and approvals provideagainst liability

Settling land use disputes in the public context, and what makes themunique

The usual suspects leading to litigation in development deals, such as besteffort, time of the essence clauses and “side deals” or oral “amendments”

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Defeating Land Use Challenges &Appealing Land Use Denials

Presented By:

Colin Deihl

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Stakeholders

Be ready for the impacton your brand

Be ready for how this willtranslate to your consumer

Be ready for whatcould be said

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Early Assessment

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Legal Guideposts

Government’s Position Legal Boundaries

Improper Conditions

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Changing Guideposts

New Zoning Code Amendment of a Zoning Ordinance

New Development Plan

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Going to Court

Type of Claims to Bring Expedited Timing

Discuss vs. Claims

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Additional Evidence

FOIA and State Analogues Sunshine Laws

Depositions & Other Discovery

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Judicial Review

Has governmental body exceeded itsjurisdiction; or abused its discretion; orapplied an erroneous legal standard?

Government decision will be upheld unless

there is no competent evidence in the

record.

Courts defer to agency -- abuse of discretionstandard

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Types of Decisions

Variances

Use by Special Review

Subdivision application

Planned Unit Development

Site Specific Rezoning

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Basis of Claims

No record evidence

Failure to apply standards

Illegal conditions or exactions

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Declaratory Judgment

New Zoning Code

Subdivision Regulations

Comprehensive Plan

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Examples

Exceeds authority

Regulatory taking

Unconstitutionally Vague

Procedural Violations

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Scope of Review

De novo review

Court does not need to defer to agency

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Illusory Protection Zoning Ordinances& Approvals Provide Against Liability

Presented By:

David Vallas

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Competing Goals

Goal of Zoning and Land Use Approval Goal of Civil Liability

Not Always Aligned

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State Law Claims

Trespass

Nuisance

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Types of Approval

Municipal approval– Cannot bypass State law by obtaining a local

municipality’s approval of a development.

– Fact that zoning allows such activity does NOTnecessarily stop such activity from beingconsidered a nuisance.

Too much noise or pollution from an entitycan still allow action for nuisance even if thearea is zoned industrial.

Statutory approval– Various laws have passed to prohibit actions

based on nuisance for various activities the statedetermines are worthwhile.

Typically applies to agricultural activity.

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Available Remedies

Injunction

Damages

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Timing of Third Party Claims

Need more than issuance of a special use permit.– Must be some actual development.– Fear of a future nuisance which has yet to occur cannot justify an immediate

filing of suit.– Prompt work may defeat the claim.

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Settling Land Use Disputes in PublicContext, and What Makes them Unique

Presented By:

Kelly Stohs

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What Makes Settlement Unique

Protecting the Public Interest No Contract Zoning

Zoning is an exercise of a governing body’s police power.

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Applicable Law

General contract law applies.

Informal communications may constitutean enforceable agreement

– Even if a more formal contract iscontemplated

– Where material terms were agreed uponand the communications evidence theintent of the parties

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Protecting the Public Interest

Settlement agreements with a governingbody

– Cannot be agreed upon in executivesession of the governing body

– Must follow other applicable laws,including public hearing requirements, toprotect the public interest

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No Contract Zoning

Where the resolution involves thesubmission of a new or revisedapplication:

– The Agreement must be consistentwith the requirements of local law

– Follow the procedures for notice tothe public

– The governing body generally cannotagree to any certain outcome.

Thank you for submittingyour application.

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When the settlement involvessubmission of a revised or newapplication

– Specify developer or landowner’sremedy in event of delay

– Anticipate how conditionalapprovals will impact the settlement

– Specify that the lawsuit will bedismissed only upon issuance of therequested permit

– May need to request a stay orextensions of time from the Court tokeep lawsuit pending until final

resolution.

Anticipating Outcomes

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Usual Suspects Leading to Litigationin Development Deals

Presented By:

Philip Bledsoe

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Best Efforts

Equal to commercially reasonable?

More than good faith?

What happens when the effortsare not successful?

What happens if there are noefforts?

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Time of the Essence Clause

Not the same as a drop dead date.

Look at entire deal.

Problematic if seeking forfeiture.

Using it to rescind easier.

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Addressing Usual Suspects

Context matters.

Often a problem of fit to theproject or deal.

A special problem of admissibility.

Say what you want and mean inthe contract.

VS.

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Is there even such an animal?

Is it less of a deal?

Could it be misrepresentation?

Is it a good deal or a self-dealing?

“Side” Deals

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Documentation Dilemmas

Oral “amendments”

“We can do that later.”

The “E” in email stands for evidence

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