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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

Opening Brief Filed In Nugent Zoning Appeal  Posted: February 24, 2005
COMMONWEALTH OF KENTUCKY
GALLATIN CIRCUIT COURT
CIVIL ACTION NO. 04-CI-00197

WILLIAM LEGRAND,ROBERT EWBANK,
ELSIE EWBANK, VIRGINIA EWBANK
and KATHY COOK

PETITIONERS/APPELLANTS

V.

GALLATIN COUNTY BOARD OF ZONING ADJUSTMENT,
WINSLOW BAKER, in his official capacity
as GALLATIN COUNTY ZONING ENFORCEMENT OFFICER
AND ADMINISTRATOR and NUGENT SAND COMPANY.



RESPONDENTS/APPELLEES

MEMORANDUM IN SUPPORT OF PETITIONERS’MOTION FOR SUMMARY JUDGMENT

Come the Petitioners/Appellants, William Legrand, Robert Ewbank, Elsie Ewbank, Virginia Ewbank and Kathy Cook (Petitioners), by counsel and in support of their motion for summary judgment against Respondents/Appellees Gallatin County Board of Zoning Adjustment (BOZA), Winslow Baker, in his official capacity as Gallatin County Zoning Enforcement Officer and Administrator (Baker) and Nugent Sand Company (Nugent), tender this memorandum of law, and state that there are no genuine issues as to any material fact and that they are entitled to a judgment as a matter of law.

INTRODUCTION AND NATURE OF THIS ACTION

This complaint and appeal arises under the provisions of KRS 100.347, which provides in relevant part that:

(1) Any person or entity claiming to be injured or aggrieved by any final action of the board of adjustment shall appeal from the action to the Circuit Court of the county in which the property, which is the subject of the action of the board of adjustment, lies. Such appeal shall be taken within thirty (30) days after the final action of the board. All final actions which have not been appealed within thirty (30) days shall not be subject to judicial review. The board of adjustment shall be a party in any such appeal filed in the Circuit Court.

In this appeal, Petitioners have challenged the November 9, 2004 final action of the Gallatin County Board of Zoning Adjustment affirming the decision of the Gallatin County Code Enforcement Officer, Winslow Baker and finding “pre-existing nonconforming use” status for all properties in the Steele Bottom area of Gallatin County owned by Nugent Sand Company (Nugent) and under a mining permit as of the January 30, 2002. A copy of the final action appealed from is annexed to the Appeal and Complaint.

STATEMENT OF MATERIAL FACTS

On April 10, 2001, Nugent received from the Natural Resources and Environmental Protection Cabinet a non-coal sand and gravel mining permit 039-9602 for a surface disturbance of 79.21 acres located in the Steele Bottom community in Gallatin County. An amendment to that permit, increasing the acreage authorized for surface disturbance, was issued on October 15, 2001, adding 148.06 acres.

Kathy Cook, one of the Petitioners in this appeal, and Rosalie Cooper filed with the Cabinet’s Office of Administrative Hearings an administrative challenge to those permitting actions, Cook et al. v. Natural Resources and Environmental Protection and Nugent Sand Co., NREPC File No. NCP-24254-037, NCP-25263-037 and NCP-25264-037, Permit Application No. 039-9602, and on May 8, 2003 the Secretary of the Natural Resources and Environmental Protection Cabinet (now the Environment and Public Protection Cabinet) entered a final order in an administrative appeal, concluding that:

"Non-Coal Permit No. 039-9602 and the Amendment thereto were issued in violation of applicable statutory and regulatory criteria[.]"

Among the findings and conclusions in the Hearing Officer’s Report was the finding, adopted by the Secretary, that:

"as a matter of law that the Petitioners have carried their burden of proof and have demonstrated that the permit and amendment were not issued in compliance with the requirements [o]f KRS Chapter 350 and 405 KAR Chapter 5."

Hearing Officer's Report and Recommendation at p. 36.

The Secretary of the Natural Resources and Environmental Protection Cabinet adopted and incorporated by reference all of the findings of the hearing officer but chose to “suspend” the permit until such time “as all applicable statutory and regulatory criteria are fully satisfied in accordance with this Order” rather than to revoke it. Secretary’s Order, page 1, May 8, 2003.

That order is currently under appeal in Franklin Circuit Court on one issue, which is whether the Secretary should have revoked rather than suspended under KRS Chapter 350 a permit found to have been issued in violation of law. The Secretary’s conclusion that the permit and amendment were “issued in violation of applicable statutory and regulatory criteria” is final, and is not part of the appeal. In response to that Secretary’s Order, Nugent ceased mining activity and continued to sell removed sand and gravel from its stockpiles.

The Zoning Regulations for Gallatin County, Glencoe and Warsaw were adopted on January 10, 2002, with an effective date twenty days thereafter, so that the determination of the status of properties owned by Nugent relative to the existence and extent of any non-conforming use rights is measured as of January 30, 2002. The lands in question were zoned R1-A, in which mining is not a use of right.

On July 10, 2003, Nugent Sand Company was notified by the Gallatin County Attorney, John G. Wright, that mining activity on the subject properties “would be in violation of the Gallatin County Planning and Zoning Ordinance.” According to the map adopted under the Gallatin County Zoning Regulations, the properties in question were zoned for residential and agricultural uses, and commercial sand and gravel mining is not a use that is allowed within those zones. The company was further instructed by the July 10, 2003 letter that “you need to stop any kind of mining activity until you are compliant with said planning and zoning regulations.”

On July 14, 2003, River Holdings, LLC, through counsel, responded to the July 10, 2003 letter. The response asserted, among other things, that: (1) “River Holdings was mining in Gallatin County prior to the enactment of the Gallatin County zoning statutes”; (2) “[T]he Committee Chair and then-Attorney Steve Huddleston acknowledged, the mining operations were “grandfathered in” at the time of the enactment of the zoning statute[;]”; (3) “River Holdings has continued to mine the property since the adoption of the zoning laws[,]” and (4) “[T]he company continues to legally operate out of Gallatin County under its original permit, and is selling mined materials from the site.”

Nugent Sand Company’s mining activity was suspended in May of 2003 and did not recommence until October, 2003, after reissuance by the state Natural Resources and Environmental Protection Cabinet (now Environmental and Public Protection Cabinet)of a non-coal permit.

On July 1, 2004, William LeGrand, Robert, Elsie and Virginia Ewbank, and Kathy Cook, by counsel, wrote to the Gallatin County Zoning Administrator Winslow Baker requesting a formal determination of compliance with Gallatin County zoning regulations, of the Nugent sand and gravel mining and sales operation being conducted in the Steele Bottom area adjacent to KY 1992. The July 1, 2004 letter to the Zoning Administrator requested

a formal determination from your office on these two matters:

1. Is the use of the subject properties for sand and gravel mining and commercial sales of mined materials entitled to recognition as an “existing nonconforming use” under KRS 100.253(1); and

2. If the use is considered by your office to be an “existing nonconforming use” under KRS 100.253(1), does the expansion of the mining pit and related activity to include new land area since the date of enactment of the zoning regulations, constitute a prohibited expansion or enlargement of the area of the nonconforming use.

By letter dated July 11, 2004 and bearing a postmark of July 12, 2004 from Cincinnati, Ohio, the Zoning Administrator responded that in his view the mining activity was entitled to continue operation under KRS 100.253 as a “pre-existing non-conforming use”. Additionally, in a sentence appearing to authorize Nugent to expand the non-conforming use to encompass all of the property it owned at the time of enactment of the ordinance rather than the actual “footprint” of the mining pit, the Zoning Administrator determined that:

I understand the definition of a Mine and its operation to be the total acreage of the property owned at the time of enactment of an ordinance to be considered the footprint of the Mine.

Pursuant to KRS 100.261, William LeGrand, Robert, Elsie and Virginia Ewbank, and Kathy Cook, by counsel appealed the Determination of the Zoning Administrator to the Gallatin County Board of Zoning Adjustment seeking reversal. KRS 100.261 provides a right of appeal “[b]y any person claiming to be injuriously affected or aggrieved by an official action, order, requirement, interpretation, grant, refusal, or decision of any zoning enforcement officer.” The Petitioners asserted that they were injuriously affected and aggrieved by the determination to grant non-conforming status to the sand and gravel mining operation since that determination allows continued operation of a heavy industrial facility that is incompatible with the zoning and existing uses of surrounding and nearby properties.

The grounds for the appeal to BOZA were:

a. The use of the subject properties by Nugent Sand and Gravel Company is not entitled to recognition as a “pre-existing non-conforming use” since at the time of enactment of the zoning ordinance, the mining was occurring under a legally insufficient permit that was unlawfully issued and failed to conform to the requirements for a mining operation. Failing to hold legal authorization to conduct such operations because the underlying permit was void and without legal effect, the use was not “lawful” and is not entitled to continue as a non-conforming use.

b. To the extent that the use was entitled to continue under KRS 100.253, the physical scope of the operation cannot be expanded beyond the boundaries of the actual mining and processing activities as of the date of enactment of the zoning ordinance. The interpretation of KRS 100.253 by Administrator Baker that would grant non-conforming use status to all properties owned by Nugent Sand and Gravel at that time irrespective of actual disturbance and use for mining and processing, is contrary to the letter and intent of the statute that non-conforming uses not be expanded or enlarged in scope or area.

Appellants in the BOZA appeal requested that the Board reverse the determination of Code Enforcement Officer and Administrator Baker and find that the subject sand and gravel mining operation lacks the requisite status of “pre-existing non-conforming use,” and for an order directing that the Zoning Enforcement Officer take appropriate enforcement action to assure that further mining and processing activities are halted.

A hearing was held on October 5, 2004, at which time all parties presented testimony and other evidence bearing on the question of the zoning status of the Nugent mining activity and properties. At the conclusion of the hearing, a briefing schedule was established, and the parties filed opening and reply briefs.

On November 9, 2004, the Gallatin County Board of Zoning Adjustments met and determined:

that the opinion of Enforcement Officer Winslow Baker is affirmed, to wit the operations of Nugent are a “pre existing nonconforming use” and Nugent’s operations may encompass the total acreage owned as of January 30, 2002 (the publication and effective date of the Gallatin County Zoning ordinance.)

IT IS FURTHER DETERMINED that the “pre-existing nonconforming use” shall only extend to the total acreage owned as of January 30, 2002 (the publication and effective date of the Gallatin County Zoning ordinance) that were lawfully permitted by the Kentucky Natural Resources and Environmental Protection Cabinet (Permit No. 039-9602) {transcript of Nugent Hearing of October 5, 2004, pp15, 19].

While the action was taken on the appeal by the Board of Zoning Adjustment at the November 9, 2004 meeting, the written Ruling of the Gallatin Board of Adjustments was not signed and served until November 29, 2004. This appeal followed, and is timely filed, since although the “Ruling of Gallatin Board of Adjustments” was signed by the Chairperson, Rose Sullivan, on November 29, 2004, according to KRS 100.347(5), “final action” is deemed to occur “on the calendar date when the vote is taken to approve or disapprove the matter pending before the body.” That vote was taken at the meeting of the Gallatin County Board of Adjustment on November 9, 2004 and this action was filed on December 8, 2004.

Venue is proper in this Court, since the Nugent property in question lies in Gallatin County within the meaning of the term un KRS 100.347.

The Appellants are each persons injured and aggrieved by the final legislative action complained of herein, as property owners residing on properties adjacent to or near the site of the Nugent Sand Company sand and gravel mining operations. The Gallatin County Board of Zoning Adjustment was named respondent / appellee pursuant to KRS 100.347(1), which directs that the “board of adjustment shall be a party in any such appeal filed in the Circuit Court.” The Gallatin County Board of Zoning Adjustment is the corporate body that issued the ruling appealed from here. Nugent Sand Company is named as respondent / appellee as directed by KRS 100.347(4), which directs that the “owner of the subject property and applicants who initiated the proceeding shall be made parties to the appeal.” The determination appealed from found that Nugent’s mining operations, encompassing the lands that it owned as of January 30, 2002 and had under permit at that time, constituted “pre-existing nonconforming uses” that could continue notwithstanding incompatibility with the zoning classification of the properties adopted on January 30, 2002. While Petitioners / Appellants initiated the Board of Zoning Adjustment proceeding by requesting a formal determination of the compliance status of Nugent’s mining operations, Nugent is a party with a direct interest and is appropriately named as a party-respondent.

STATEMENT OF THE LAW

Whether, and to what extent, Nugent has an “existing nonconforming use” that is entitled to continue despite the inconsistency of that use with the applicable zoning classification, depends on the meaning and application of KRS 100.253, which provides in relevant part that:

(1) The lawful use of a building or premises, existing at the time of the adoption of any zoning regulations affecting it, may be continued, although such use does not conform to the provisions of such regulations, except as otherwise provided herein.

KRS 100.253(1). (Emphasis added).

A use, to be entitled to continue despite nonconformance with zoning regulations must under the statute both be “lawful” and “existing at the time of the adoption” of the zoning regulations affecting it.

As to whether an existing use can be expanded, the statute is equally clear:

(2) The board of adjustment shall not allow the enlargement or extension of a nonconforming use beyond the scope and area of its operation at the time the regulation which makes its use nonconforming was adopted . . . . KRS 100.253(2) (Emphasis added).

The legislature has clearly indicated that nonconforming uses cannot be extended or enlarged in scope or in area.The law favors the “gradual elimination of “nonconforming” uses of property, so that “such nonconforming uses as are tolerated under law cannot be enlarged.” Franklin Planning and Zoning Commission v. Simpson County Lumber Company, Ky., 394 S.W.2d 593, 594 (1965).

STANDARD OF REVIEW

Judicial review of agency action is concerned with the question of arbitrariness. In American Beauty Homes Corp. v. Louisville & Jefferson County Planning & Zoning Comm'n, Ky., 379 S.W.2d 450 (1964), the Court enunciated the standard for review of administrative agency action:

The above three grounds of judicial review, (1) action in excess of granted powers, (2) lack of procedural due process, and (3) lack of substantial evidentiary support, effectually delineate its necessary and permissible scope. . . . In the final analysis all of these issues may be reduced to the ultimate question of whether the action taken by the administrative agency was arbitrary.

Id., at 456.

The case of City of Louisville v. McDonald described in further detail the scope of judicial review of the actions of a legislative body action in the context of KRC Chapter 100:

[J]udicial review is confined to a determination of whether the zoning action taken was arbitrary. . . If the zoning commission conducts a trial-type due process hearing and based thereon makes factual findings and a recommendation, the legislative body may follow the commission’s recommendation without a hearing or only an argument-type of hearing. The record made before the commission must adequately reflect the elements necessary for judicial review to determine whether the ultimate action was arbitrary. The legislative body may review the record made before the commission and determine from that evidence adjudicative facts which differ from those found by the commission. The legislative body also may hold its own trial-type hearing and may find as a result thereof different adjudicative facts than those found by the commission. In any event, the ultimate decision must be made by the legislative body. If a legislative decision that affirmatively changes a zoning classification is made upon the basis of appropriate findings of either the commission or the legislative body, which are supported by substantial evidence adduced at the hearing, the legislative body’s action will not be declared arbitrary.

City of Louisville v. McDonald, supra, at 177-178.

The inquiry into whether the agency has acted “arbitrarily” requires evaluation of whether the decision rests on substantial evidence in the record taken as a whole, adherence to procedural due process (including the making of specific findings of basic evidentiary facts) and satisfaction of the applicable requirements of the enabling statute. Unlike the deference accorded the agency in the weighing and selection of evidence, the interpretation and application of a statute by the agency is reviewed de novo by the court. Lindley v. Paducah Bank and Trust, Ky. App. 114 S.W.3d 259 (2003); Rogers v. Fiscal Court of Jefferson County, Ky.App. 48 S.W. 3d 28 (2001). If the ruling of the administrative agency is based on an incorrect view of the law, the reviewing court may substitute its judgment for that of the agency. Kentucky Board of Nursing v. Ward, Ky.App. 890 S.W.2d 641 (1994)

SUMMARY OF ARGUMENT

The Ruling of the Board of Zoning Adjustment was arbitrary. The use of the subject properties by Nugent Sand Company is not entitled to recognition as a “pre-existing non-conforming use” as a matter of law under KRS 100.253 because at the time that the zoning ordinance took effect on January 30, 2002, such mining as was occurring was being conducted under a legally insufficient and unlawfully-issued permit that failed to conform to the requirements for conducting a lawful mining operation in the Commonwealth. The mining permit was void as a matter of law, and failing to hold legal authorization to conduct such operations because the underlying permit was void and without legal effect, Nugent’s use of the land could not be considered “lawful” under KRS 100.253(1) and is not entitled to continue as a non-conforming use.

Alternatively, even if the mining activity such as had been conducted by Nugent before January 30, 2002 were entitled to continue under KRS 100.253, the Board of Zoning Adjustment erred in concluding that all of the Nugent-owned lands under the mining permit were within the scope of the nonconforming right. Under law, only that land lawfully and actually being used in a non-conforming manner is entitled to continue, and in this case to the extent that such rights did exist they would encompass only the physical “footprint” area of the operation, and that area could not be lawfully expanded beyond the boundaries of the actual mining and processing activities that had been conducted as of that date. The interpretation of KRS 100.253 by the Board of Zoning Adjustment granting pre-existing nonconforming use status to all properties that were owned and under permit by Nugent Sand Company as of January 30, 2002 irrespective of the actual disturbance of or use to which the properties were being put as of the date that the applicable zoning restrictions attached, is contrary to the letter and intent of the statute that non-conforming uses be existing, and not be expanded or enlarged in scope or area. All properties whose use conformed with the applicable zoning, including all lands owned by Nugent which were being subject to farming or other conforming uses, even if “under permit,” cannot lawfully be considered “non-conforming” under KRS 100.253.

ARGUMENT

Kentucky has long recognized the right of local governments to adopt planning and zoning under the police power granted to states. KRS § 100.201. The Kentucky Supreme Court has noted that the “purpose of zoning is to promote the common good and general welfare of the community.” Louisville and Jefferson County Planning Comm’n v. Schmitt, Ky., 83 S.W.3d 449, 455 (2001), citing Fritts v. City of Ashland, Ky., 348 S.W.2d 712, 714 (1961). Non-conforming uses in existence as of the date that the zoning regulation becomes applicable and makes such uses “non-conforming” are entitled to limited protection against extinguishment, but cannot lawfully be expanded in scope or area.

I. THE BOARD OF ZONING ADJUSTMENT DECISION IS ARBITRARY SINCE THE MINING OPERATION ON THE SUBJECT PROPERTIES WAS NOT A “LAWFUL USE” ENTITLED TO CONTINUATION UNDER KRS 100.253.

KRS 100.253 allows for the continuation of certain uses of property that are inconsistent with zoning regulations, provided that the use meets the requirements of that statute. Specifically, KRS 100.253 provides in part that: (1) The lawful use of a building or premises, existing at the time of the adoption of any zoning regulations affecting it, may be continued, although such use does not conform to the provisions of such regulations, except as otherwise provided herein.

KRS 100.253(1)(Emphasis added).

In order for the mining activities to be entitled to continue notwithstanding inconsistency with zoning regulations, Nugent’s mining activity would had to have been a “lawful use” existing at the time of adoption of the zoning regulations. The mining activity in this case, having been conducted without a lawfully issued mining permit, was not a “lawful use” and is not entitled to continue under the zoning regulations adopted by the county.

It is axiomatic that no sand and gravel mining operation can be conducted on any lands in the state without a valid mining permit. State regulation, at 405 KAR 5:015 Section 4(1) demands that no person shall engage in a mineral operation without having obtained from the state cabinet, a permit as required and described under 405 KAR 5:030. 405 KAR 5:030 sets out the permit requirements, and provides that: no application for a permit and no mineral operation shall be approved, unless the application affirmatively demonstrates and the cabinet determines on the basis of information set forth in the application, and other available pertinent information, that: (1) the permit application is accurate, complete, and that all requirements of 405 KAR Chapter 5 have been complied with[.]”

Kentucky law is clear that a permit issued in violation of applicable statutory and regulatory criteria is void and of no legal effect as a matter of law. Just as a zoning ordinance adopted by a city that did not follow the requirements of KRS Chapter 100 for adoption of such ordinances is “void ab initio,” (void from the beginning), Bellefonte Land, Inc. v. City of Bellefonte, Ky. App. 864 S.W.2d 315 (1993), so too are permits issued in disregard of legal requirements considered “void” and of no effect.

The case of Hancock v. Terry Elkhorn Mining Company, Inc., Ky. App. 503 S.W.2d 710 (1973) is dispositive. In that case, the Court found special overweight trucking permits issued by the Department of Highways to be “void and of no force and effect” where the agency had “completely disregarded” its own regulations in issuing the permits despite the company’s failure to comply with several of the application requirements. Other cases so holding include Goss v. Personnel Board, Ky. 456 S.W.2d 819 (1970); Robinson v. Ehrler, Ky., 691 S.W.2d 200 (1985); and Commonwealth of Kentucky, Tourism Cabinet v. Stosberg, Ky. App. 948 S.W.2d 425 (1997). As a matter of law, an invalidly issued permit does not vest legal status in an otherwise illegal activity. Holloway Ready Mix Co. v. Monfort, Ky., 474 S.W.2d 80, 84 (1968), Ashland Lumber Company v. Williams, Ky., 411 S.W.2d 909, 911 (1966), Attorney Gen. v. Johnson, Ky., 355 S.W.2d 305, 308 (1962).

It is equally clear that the beneficiary of the illegal agency action can claim no legal entitlement based on the illegal agency action. Bowling v. Natural Resources & Environmental Protection Cabinet, Ky. App. 891 S.W.2d 406, 411 (1994). Nugent can claim no right to continued operation based on reliance on a void permit.

Regardless of whether the Franklin Circuit Court upholds the Cabinet Secretary’s suspension of the mining permits, or agrees with Petitioners that revocation of the permit was the appropriate remedy under KRS Chapter 350, Kentucky law is clear that a permit issued in violation of law is void, and therefore under KRS 100.253, the mining activity conducted without a valid permit was not a “lawful” use and is not entitled to nonconforming status under KRS 100.253(1).

The determination of the Zoning Administrator, as adopted by the Board of Adjustment, that Nugent’s operation was a “legal business” and thus was entitled to be given “pre-existing non-conforming use status” was arbitrary, since the mining that was conducted prior to enactment of the zoning regulations was conducted without a valid permit and therefore was not a “lawful use.”

Nugent argued below that “lawful,” in the context of KRS 100.253, means nothing more than that “the business [could] be conducted in the zone where it was located prior to the change of a zoning regulation or ordinance[.]” October 5, 2004 Letter at p. 3. Nugent cited the cases of Grannis v. Scroder and Gates v. Cornett & Payton in support of this proposition. The interpretation given to the phrase “lawful” by Nugent would deprive the word of any meaning in all cases where a community initially adopts a zoning map. Under the Nugent construction of the term “lawful,” any use of property is lawful so long as there is no zoning to the contrary – so that all existing uses are automatically grandfathered in and given nonconforming status, including presumably criminal or illegal uses of property, since they are “lawful” simply because there is no zoning to preclude them.

In truth, “the statute does not protect all existing uses, but instead protects only those lawful uses then in existence. The cases cited by Nugent do not categorically reject the idea that the underlying legality of the land use has bearing on whether the use is to be continued. The Grannis case is not pertinent to this case, since it involves the application of the “agricultural supremacy clause,” a specific clause in a separate zoning statute that exempts agricultural use of land from zoning, and is not a case involving a legal nonconforming use. Grannis, rather than supporting Nugent’s argument, underscores that the policy underlying KRS 100.253 is that while “legal nonconforming uses have aright to exist, . . . the policy and spirit of zoning laws are geared toward the gradual elimination of nonconforming structures.” Grannis, 978 S.W.2d at 332.

Nugent’s reliance on the Gates case is similarly misplaced. While it is true that the Gates court concluded that the lapse of a health department permit did not make the trailer park an “unlawful” use, the facts are very different than in this case, as is the nature of the permit at issue. In Gates, there was no dispute that the trailer park, a use that had continued for more than ten years, was not in violation of the previously existing ordinance but was a permitted nonconforming use. The narrow question presented was whether, at the time that the existing ordinance was amended to allow “lawful” uses to continue, the temporary lack of a health permit voided the existing established nonconforming use. The Court concluded that it did not believe that the local ordinance in question was concerned with any illegality of use other than a use in violation of the previously existing zoning ordinance.

Gates did not involve a judicial determination of the use of “lawful” in KRS 100.253, and in fact, the structure of KRS 100.253 strongly suggests that something more is meant by the term “lawful” than what the Gates court read into the ordinance in question. For in KRS 100.253(3), provision is made to protect illegal existing uses which have been in continuous existence for ten years after adoption of the zoning ordinance and which have not been the subject of any adverse order or other adverse action by the zoning official. Subsection (4) provides that subjection (3) does not apply to counties containing cities of the first or second class, or consolidated or urban-county governments. If Nugent is correct that all existing uses are “lawful” simply because they predate the first enactment of a zoning ordinance, then the provision for insulating “illegal” uses that continue for more than a decade would be unnecessary surplusage.

The rule in Kentucky concerning the effect of non-compliance with licensing and permit requirements on the validity of a nonconforming use status, is more complex. The distinction is framed in Dempsey v. Newport Board of Adjustments, which asked specifically whether the failure to obtain an occupational license for the business rendered the operation illegal and thus formed a basis for termination of the nonconforming use status. The Court reasoned:

As the Appellant has noted, courts has repeatedly considered and concluded that business licensing, business and occupational tax regulations, or building permits are matters separate and apart from land use planning and are not per se determinative of the continuance of a nonconforming use. . . .

The Court cited with approval the reasoning and holding of the case of City of Middlesboro Planning Commission v. Howard, Ky., 551 S.W.2d 556 (1977) in which the court determined that violation of a revenue producing ordinance is not sufficient in itself to forfeit a nonconforming use. Id. at 486.

It is in the distinctions drawn in the Middlesboro and the Dempsey cases that it becomes clear that violation of a law that makes the acquisition of a valid permit essential to the use of land for mining, is the type of “lawful” action that must precede a claim of nonconforming status. Before turning to these cases, it must be noted that Dempsey and Gates both addressed the effect of noncompliance with health or occupational fee license ordinances on pre-existing nonconforming uses. In this case, the obligation to obtain a valid mining permit predated Nugent Sand Company’s acquisition of the lands in question, so that there was no time during which mining of those lands would have been “lawful” as a matter of general law absent a mining permit, regardless of whether the area was zoned or not. This is not a case where a valid nonconforming use existed and was then burdened with a new ordinance requiring licensure – but instead is a case where Nugent lacked lawful authority to engage in mining prior to zoning due to the failure of the company to properly comply with the requirements precedent to issuance of a lawful mining permit. In concluding that the failure to maintain an occupational license could not form the basis for terminating the nonconforming use, despite the provisions of the city’s zoning ordinance, the Dempsey Court relied on the Middlesboro Court’s analysis that “the penalty sought to be imposed on the [landowner] is so disparate to the ordinary penalty . . . so as to render it void as discriminatory and arbitrary.” The Dempsey court took note that the ordinary penalty for failure to obtain the occupational license was 10% of the delinquent fee and a fine, and that it was a “revenue measure” for the city.”

Here, in contrast, the penalties for failure to hold a valid mining permit include injunctive relief, and civil and criminal penalties. It is not a matter that one engaging in the proscribed activity may be subject to a delinquent fine, but instead that the activity is itself unlawful and cannot be undertaken in any manner absent first and consistently holding a valid permit. (For this reason, despite Nugent’s protestations that at all times it held a valid permit, it stopped mining during the period of time after the Secretary’s order, and until the reissuance of a permit some 8 months later). The cessation of Nugent’s mining after the Secretary’s order is in contrast to the ongoing nature of the business operations in Dempsey. Id. at 486. The Middlesboro case stands in stark contrast to the facts in this appeal. In Middlesboro, the court determined that a loss of nonconforming rights that had existed for nine years, for violation of a $25 privileges license fee that all parties agreed was merely a revenue measure for which the usually penalty was a 10% delinquent fee, was “not sufficient in itself to forfeit a nonconforming use.” The court did not adopt a categorical rule that violation of a permitting requirement could never be sufficient to forfeit a nonconforming use, nor did it rule that a nonconforming use could be established through engaging in an illegal activity prior to adoption of the zoning requirements.

In sum, Nugent lacked a valid mining permit and could not lawfully engage in mining as of the date of zoning applicability. Its use of the property was not “lawful” within the meaning of KRS 100.253 since it held a void permit, the penalty for which would include a prohibition on further mining. In this instance, the lack of underlying privilege to engage in mining invalidates any claim to a legal pre-existing, non-conforming status.

2. The Board Erred In Finding Preexisting Nonconforming Use For All Nugent-owned Lands Under Permit Since Under KRS 100.253 Nugent’s Mining Activity Cannot Lawfully Expand Beyond The Excavation In Existence On The Date That The Zoning Regulations Took Effect, Even If The Use Were Entitled To Continue.

While Appellants believe that the Board erred in finding any non-conforming rights since the lack of a valid permit defeats the claim of Nugent Sand Company to continued non-conforming status under KRS 100.253(1), even if such a claim could be made the statute does not allow any expansion of the area or scope of the mining activity beyond what was in actually in existence on January 30, 2002.

The BOZA hearing testimony reflected that as of January 30, 2002, there had been no surface disturbance on the Blankenship, Sproul or O’Connor properties, and that all of the mining was limited to a portion of the Jackson Property. (Transcript of October 5, 2004 Hearing, hereinafter “T” at pp. 33-34). Since January 30, 2002, according to neighbor Kathy Cook, the pit on the Jackson property has been physically expanded to twice the size of what it was originally. T:33-34. A company official admitted that the area of the pit has expanded since that day, T:54, but hasn’t yet expanded onto the Sproul properties. T:57. Having acknowledged such an expansion of operational area, Nugent has admitted transgressing whatever non-conforming status it might have had. The Board of Zoning Adjustments, in holding that the total acreage of the property owned by Nugent at the time of enactment of the ordinance which was under permit was considered a preexisting nonconforming use, regardless of whether that acreage was being put to a conforming use or not as of January 30, 2002, violated KRS 100.253(1) and (2) and has granted non-conforming status to lands which at the time of zoning adoption and currently remain agricultural in use. T:65-6.

KRS 100.253(2) codifies the principle that a nonconforming use cannot be enlarged or extended beyond the scope and area of its operation “at the time the regulation which makes its use nonconforming was adopted.” The BOZA made a fundamental error in failing to limit the non-conforming use to those properties and portions of properties for which the use was in fact non-conforming as of January 30, 2002 and rejecting the physical expansion of the mine area that occurred thereafter as being an unlawful expansion of whatever non-conforming use status may have existed. KRS 100.253 is clear in defining what uses, if any, are entitled to continue even where in violation of applicable zoning – it is only those lawful and existing nonconforming uses of a building or premises. Expansion of the area of a nonconforming use is prohibited.

In finding that Nugent had nonconforming use rights to all of the properties it owned in Steele Bottom that were under permit as of January 30, 2002, the Board committed clear legal error, since the law in Kentucky is clear – a property whose uses conform to the zoning when it is enacted cannot be considered “nonconforming,” and in order for a property to qualify as a nonconforming use, the use must actually be occurring prior to the enactment of the zoning ordinance. For those properties owned or leased by Nugent that were not being mined as of that date, no claim of nonconforming use exists. That would include the Sproul tracts, the O’Connor and Leroy Tracts, the Blankenship Tract and portions of the Jackson tract, all of which were being used for farmland as of January 30, 2002 and continue to be so used. T:61. Farming is a conforming use in the zone adopted for these properties on January 30, 2002.

The analysis is straightforward – for how can one claim to have a right to continue a use of a property that doesn’t conform to zoning classifications is in fact the property isn’t being used in a nonconforming way? For all of the properties that were being put to agricultural use as of the date of zoning applicability (and which are still being used for agriculture) no claim of nonconforming use can be made since they were and are being used in a conforming manner. As the Court explained in Perkins v. Joint City-County Planning Commission, 480 S.W.2d 166 (Ky. 1972),

The general rule is that for property to qualify as nonconforming use the use must have been actually demonstrated prior to the zoning ordinance. Mere contemplation of use of the property for a specific purpose is not sufficient to place it in a nonconforming use status. (citations omitted).

Nor is the purchase of the property accompanied by an intent to use it for a specific purpose sufficient. (citation omitted).

Id. at 168. The decision granting non-conforming status broadly to all properties owned by Nugent which were under permit, even those that were and are being put to conforming uses (farming) is flatly inconsistent with the principle that an expansion of a nonconforming business into “areas which have heretofore been in conformance with the zoning code and map” is not allowed. Covington Board of Adjustment v. Remke’s Market, Inc., Ky. App., 705 S.W.2d 953, 954 (1986). Just as the Covington Court rejected the idea that a nonconforming use right could be extended to convert an area that was in conformance with the zoning to a parking lot for a nonconforming use, the prohibition against extension of the area of a nonconforming use in KRS 100.253(2) prevents conversion of lands that were in use for raising crops or other agricultural purposes at the time of the adoption of zoning, to a sand and gravel mine.

Under the law in this Commonwealth it is clear that for a party to claim that a structure or use of property is “non-conforming,” that use must actually be occurring at the time that the zoning enactment become applicable. Most of the properties in which Nugent claims some interest and in fact a portion of the one and only tract on which sand and gravel operations are occurring were being farmed and continue to be farmed. Farming is a conforming use in the zone, and thus those properties cannot be considered eligible for “non-conforming” status where the usual and customary use of the properties was for agricultural purposes. Durning v. Summerfield, Ky., 235 S.W.2d 761 (1951).

The law is equally clear that the acquisition of the other properties, or leasing an interest in those lands, even where coupled with expenses of drilling a handful of test holes and conducting an archaeological survey one land, do not allow a party to claim non-conforming status where the lands are being put to conforming uses. This is not an instance in which “substantial construction” has been made or “substantial liability” incurred, and failing that, the general rule is that for a property to quality as nonconforming use the use must have been actually demonstrated prior to the zoning ordinance.

Perkins v. Joint City-County Planning Commission, Ky., 480 S.W.2d 166 (1972).

In this case such as this where the land is actually in use for conforming purposes, where no structures have been constructed, no roads constructed, and where other than drilling a handful of test holes, no development of those properties has occurred, the general rule applies.

To the extent that this Court determines that Nugent possessed lawful pre-existing non-conforming status to any lands, that the finding of necessity should be limited to those lands demonstrated by Nugent to have been owned, under permit and actually disturbed and utilized for a nonconforming use (sand and gravel mining) as of January 30, 2002, and excluding all lands which were as of that date being utilized for conforming uses or which have been disturbed and converted to industrial use after that date.

CONCLUSION

For these reasons, Appella


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