Just because you may win on appeal in one claim does not mean that you have properly preserved your other claims. This was a hard lesson to learn for one developer in the case of B&B Enterprises v. City of Lebanon (pdf), a decision recently issued by the Supreme Court of Tennessee on August 31, 2010.
In B&B Enterprises, the developer of a residential subdivision filed suit against the City, alleging that the planning commission had denied it all economically beneficial use of its property by wrongfully refusing to approve the final plans for two phases of its subdivision.
Although there is more history to this dispute, the real rub occurred after the developer appealed to the trial court the planning commission’s refusal to approve the final plan. Both the trial court and the appellate court held that the planning commission had acted arbitrarily and capriciously when it declined to approve the plans for Phases Two and Three. Thereafter, the developer filed a complaint seeking monetary damages based upon claims of regulatory takings and violation of civil rights.
In those proceedings the City argued that the applicable one year statute of limitations barred the developer’s claims. Ultimately, the Supreme Court of Tennessee concluded that the claims were untimely because the developer "knew" that the City’s conduct occurred when the planning commission denied the final plans. The Court rejected the developer’s claim that the City’s actions were not "permanent" or "complete" because it sought (and won) judicial review of the planning commission’s denial. The Court reasoned:
The Planning Commission’s action on February 26, 2002, put B & B Enterprises on notice that its reasonable investment-backed expectations for the use of its property had been frustrated. Regardless of the eventual outcome of the judicial proceedings, the Planning Commission began interfering with B&B Enterprises’s economically beneficial use of its property by no later than February 26, 2002.
Do you see the fine line here? The Court focused on the planning commission’s actions and not the subsequent actions of the courts. Again, it is the final decision of the agency that triggers the claim and not whether subsequent review of that decision provides relief. Since I am a visual-learner, it may be easier to understand the time line this way:
UNTIMELY LAWSUIT = Planning commission’s denial→ judicial and appellate review of denial → appellate reversal of denial → suit to seek damages relating to denial.
TIMELY LAWSUIT = Planning commissions denial → review of denial and suit to seek damages relating to denial → judicial and appellate review if necessary.
While you make not agree with the reasoning of the court’s decision in B&B Enterprises, the lesson learned is one about preservation of rights at the earliest stage possible. Know and understand your deadlines.
Image: husfse on Flickr