Hard cases make bad law, as the saying goes, and RICO Corp. v. Town of Exeter1 seems to be one of the harder ones the Rhode Island Supreme Court has decided in recent years, at least in the area of zoning.

In RICO the Supreme Court held that zoning boards do not have jurisdiction to determine the existence of a nonconforming use. That may come as surprising news to zoning lawyers who have been regularly asserting or challenging the existence of claimed nonconforming uses before zoning boards.

How did the Court come to this conclusion? And what does it mean for the future? This article explores those questions by first examining the RICO case and then taking a look at prior case law.

The facts in RICO bordered on the bizarre. In asserting his right to a nonconforming use, the landowner, who later sold the property to RICO Corporation, said he ran a sand and gravel business on a small part of his land in 1972, a year before the town enacted an licensing ordinance regulating earth removal operations. However, later he testified that he began his sand and gravel operation in 1974, the year after the ordinance was enacted.2 He did not apply for a license under this ordinance, and when the town enacted its first zoning ordinance a few years later, his property was zoned to prohibit earth removal.3

Nevertheless, this did not prevent him from continuing to remove sand and gravel from the property. As the Supreme Court noted:

… about twelve years after the town’s earth removal licensing ordinance was enacted, and over eight years after the town’s zoning ordinance was enacted, Marcel for the first time decided to go to the town clerk’s office and request an earth removal license … It appears, however, that he did so without complying in any significant manner with the necessary prerequisite license application requirements contained in the earth removal licensing ordinance, or in compliance with the town’s zoning ordinance. The town clerk, on September 26, 1985, for no discernibly valid reason, granted and issued him an earth removal license for a term not to exceed thirty-six months.4

The Court went on to point out that the town clerk appeared to have “completely ignored not only the license filing requirements of the town’s earth removal ordinance, but also the town’s zoning ordinance.”5 Moreover, said the Court, subsequently the owner, in order to sell the property to RICO Corporation, “somehow was able to obtain a document entitled ‘Zoning Certificate’ from the town’s zoning inspector,” which purported to confirm the existence of a current “Gravel Bank License” that conformed to the town’s zoning ordinance – even though the zoning ordinance prohibited earth removal on the property and the only license ever obtained for the business had expired two months earlier!6

Armed with this zoning certificate, RICO Corporation bought the property and began heavy duty blasting operations, which led to the neighbors flooding the town hall with complaints, which led to the zoning officer issuing a cease and desist order based on the inspector’s declaration that RICO “was expanding its nonconforming use, in violation of the town zoning ordinance.”7

The zoning officer’s cease and desist order was appealed to the zoning board of review, which upheld the order based on its express findings that RICO held a valid legal nonconforming use to operate a gravel bank and that RICO had unlawfully expanded that nonconforming use.8 This decision of the zoning board was not appealed to Superior Court.

However, the Superior Court did get involved in the dispute when RICO Corporation filed an action for a declaratory judgment and injunctive relief, and the town counterclaimed. On cross-motions for summary judgment, the Superior Court justice concluded that

because the zoning board’s August 31, 1993 decision had not been appealed, the zoning board’s determination that a legal nonconforming gravel bank use existed on the property was final and binding on both RICO and the town ….9

Although criticizing the justice’s reliance on res judicata, rather than on administrative finality, as the reason for considering herself bound by the zoning board’s finding that RICO Corporation had a valid nonconforming use, the Supreme Court’s holding was based on the deeper jurisdictional issue. The Court held that, even if res judicatawere applicable, “the Exeter Zoning Board of Review had no statutory authority to make such a finding and lacked subject matter jurisdiction to do so 10

The Court cited two cases for this holding. One of them11 states the rule that a zoning board is “wholly a statutory creature” and is “without powers, rights, duties or responsibilities save for those conferred upon it by the Legislature.”12 But the facts in Hassell had nothing to do with a zoning board’s power to determine the existence of a nonconforming use. That case dealt with a zoning board’s power to seek further judicial review of a Superior Court decision which had reversed a decision of the zoning board.

The other case cited by the Cour 13 did involve a zoning board decision purporting to establish a pre-existing use, although by granting a special exception rather than by declaring it to be a nonconforming use. The Supreme Court in Olean said that the zoning board “by purporting to confirm the legality of a pre-existing use in substance assumed to itself the power to issue declaratory judgments,” which it has no right to do.14 This was the key language quoted in the RICO opinion.

There is, however, a crucial distinction between the Olean case and the RICO case. In Olean, the question of the legality of the pre-existing use was brought before the zoning board twice, first on an appeal from a decision of the building inspector, and then subsequently on an application by the property owner for a “Special exception … as a continuation of the present operation.”15

The Olean court emphasized that it was not reviewing the board’s denial of the appeal from the building inspector’s decision, but rather was reviewing the zoning board’s second decision authorizing a continuance of a use previously established. The holding of the court in Olean was that “the board was clearly without jurisdiction to act on the petition for an exception.”16 Nothing in the Olean opinion suggested that the zoning board had acted without jurisdiction in upholding the building inspector’s decision its first decision.

This analysis of the Olean case is supported by earlier cases holding that zoning boards do not have jurisdiction to decide whether a valid nonconforming use exists on a direct application for such a determination or on an application for a variance or special-use permit.17

On the other hand, there are many cases in which a zoning board, in hearing an appeal from a building inspector’s decision, has made a determination about the existence of a nonconforming use, and the Supreme Court has reviewed these decisions without holding that the board lacked jurisdiction to determine the issue.18 For example, in Harmel Corp. v. Zoning Board of Review of Tiverton,19 decided just ten years ago, a building inspector granted a building permit to install a new kitchen in a building that had been used as a private club and public restaurant. On appeal, the zoning board held that the building’s proposed use as a restaurant and banquet facility was not a pre-existing nonconforming use. The Superior Court affirmed this decision, but on certiorari the Supreme Court said there was “no evidentiary support” for the zoning board’s finding that the proposed use was not a pre-existing nonconforming use.20 However, the Court did not even suggest that the board had no jurisdiction to make this finding.

Thus, the rule in Rhode Island before RICO was that a zoning board had no jurisdiction to determine the existence of a nonconforming use on a petition for such a determination or on an application for zoning relief, but could do so on an administrative appeal.

This is consistent with statutory law. Zoning boards of review are authorized to hear and decide appeals from any “order, requirement, decision, or determination made by an administrative officer or agency in the enforcement or interpretation” of the zoning enabling act or of any zoning ordinance adopted under it.21 In deciding administrative appeals, the zoning board of review has the same powers as are possessed by the officer from whom the appeal is taken.22

In other words, on an appeal from a building inspector’s determination that a nonconforming use does or does not exist, the zoning board stands in the shoes of the building inspector, which means that the zoning board must decide whether a valid nonconforming use exists.

Furthermore, there are some situations in which a zoning board must determine whether a nonconforming use exists when it is not acting in an appellate capacity. The Zoning Enabling Act expressly authorizes local zoning ordinances to permit the alteration of nonconforming uses by means of a special-use permit, which must be approved by the zoning board of review.23 It does not seem possible for a zoning board to permit the alteration of a nonconforming use without first determining, at least impliedly, that the nonconforming use exists.

In Hugas Corp. v. Veader,24 for example, the zoning ordinance expressly authorized the zoning board to grant a special exception to extend a nonconforming use. On an application for a special exception or variance to permit the installation of a canopy and a change of signs for a gasoline service station, the zoning board determined that the gas station was a nonconforming use. On appeal to Superior Court, the property owner contended that its use was a permitted use, not a nonconforming use, but the Superior Court justice upheld the zoning board’s determination. On certiorari to the Supreme Court, the landowner argued “that the board and the trial justice erred in determining petitioner’s status as a nonconforming use,” but the Court, although holding that the wrong standard had been applied in denying relief, upheld the determination that the gasoline station was a nonconforming use.25

In fact, zoning boards make such determinations all the time, even on garden-variety applications for variances or special-use permits, because zoning relief cannot be granted unless the proposed use is lawful, and often the variance or special-use permit requested is to change or expand an existing use. The applicant claims that it is a lawful nonconforming use and the objectors claim just the opposite. The zoning board has to decide who is correct and in doing so it must necessarily determine the existence of the contested nonconforming use.

So, what to make of the Supreme Court’s decision in RICO? It does not seem possible to reconcile it with prior judicial authority on the issue of a zoning board’s jurisdiction to determine the existence of a nonconforming use, at least on an administrative appeal. Of course, where there is no direct challenge to a nonconforming use, as in the case where a landowner seeks to make changes to such a use authorized by variance or special-use permit, the board can simply assume that the use is lawful and nonconforming. It does not, on its own motion, have to questions its jurisdiction.

But where the existence of an alleged nonconforming use is placed in issue before a zoning board, as on an appeal from a building official’s decision, what should the board do? Should it decline to answer the question and send the parties to Superior Court for a declaratory judgment?

The question is not easy to answer, in light of the Supreme Court’s expansive language in the RICO case. One thing is certain. The scope of the zoning board’s jurisdiction on this issue is now so uncertain that it will be challenged in many cases, and no doubt one of them will wend its way up to the Supreme Court, which can then tell us just what it meant in RICO.

FOOTNOTES:

1. 787 A.2d 1136 (R.I. 2001).  (back to text)
2. Id. at 1139, footnote 2.  (back to text)
3. Id. at 1139.  (back to text)
4. Id. at 1139-40 (footnote omitted).  (back to text)
5. Id. at 1140.  (back to text)
6. Id.  (back to text)
7. Id. at 1141.  (back to text)
8. Id. at 1141. See also p. 1143, where the Supreme Court recited the relevant procedural history.  (back to text)
9. Id. at 1143.  (back to text)
10. Id. at 1144 (emphasis added).  (back to text)
11. Hassell v. Zoning Bd. of Review of East Providence, 108 R.I. 349, 275 A.2d 646 (1971).  (back to text)
12. Id., 275 A.2d at 648.  (back to text)
13. Olean v. Zoning Bd. of Review of Lincoln, 101 R.I. 50, 220 A.2d 177 (1966).  (back to text)
14. Id., 220 A.2d at 178.  (back to text)
15. Id.  (back to text)
16. Id., emphasis added.  (back to text)
17. See Winters v. Zoning Bd. of Warwick, 80 R.I. 275, 96 A.2d 337 (1953) (application for variance or special exception is addressed to zoning board’s discretion and by its very nature precludes assertion of claim of right to nonconforming use); Dubois v. Zoning Board of Review, 101 R.I. 461, 224 A.2d 606 (1966) (on application for variance zoning board was without jurisdiction to consider applicant’s claim that property was being used as legal nonconforming use); Zuena v. Cranston Zoning Board of Review, 102 R.I. 299, 229 A.2d 846 (1967) (zoning board exceeded its jurisdiction in considering application for special exception to conduct ice-cream parlor and grille in residential district as one to establish right to nonconforming use).  (back to text)
18. See, e.g., Richards v. Zoning Bd. of Providence, 100 R.I. 212, 213 A.2d 814 (1965) (upholding zoning board’s decision recognizing nonconforming use of property as industrial bakery and finding that such use had not been abandoned); A.T.&G., Inc. v. Zoning Bd. of Review of North Smithfield, 113 R.I. 458, 322 A.2d 294 (1974) (holding that zoning board had misconstrued law relating to abandonment of nonconforming use); Washington Arcade v. Zoning Board of Review, 528 A.2d 736 (R.I. 1987) (reversing zoning board’s determination that nonconforming use had been abandoned).  (back to text)
19. 603 A.2d 303 (R.I. 1992).  (back to text)
20. 603 A.2d at 307.  (back to text)
21. R.I.G.L. § 45-24-57(1)(i).  (back to text)
22. R.I.G.L. § 45-24-68.  (back to text)
23. R.I.G.L. § 45-24-40(a)(1).  (back to text)
24. 456 A.2d 765 (R.I. 1983).  (back to text)
25. 456 A.2d at 770.  (back to text)