S. Weber City v. Cobblestone Resort LLC

511 P.3d 1207

SOUTH WEBER CITY, Appellee,

v.COBBLESTONE RESORT LLC, Wonae Mier, and Dustin Shiozaki, Appellants.

No. 20210028-CA

Court of Appeals of Utah.

Filed May 12, 2022

Matthew J. Morrison, Attorney for Appellants

Robert C. Keller, Salt Lake City, Danica N. Cepernich, and Nathanael J. Mitchell, Salt Lake City, Attorneys for Appellee

Judge Michele M. Christiansen Forster authored this Opinion, in which Judges David N. Mortensen and Jill M. Pohlman concurred.

Opinion

Christiansen Forster, Judge:

¶1 Cobblestone Resort LLC, Wonae Mier, and Dustin Shiozaki (collectively, Cobblestone) appeal the district court's order granting South Weber City's (South Weber) motion to enjoin the ongoing use of a property owned by Cobblestone for short-term or vacation rentals without a valid business license. We affirm.

BACKGROUND

¶2 In August 2018, Cobblestone purchased a residence with a pool (the Property) located in South Weber. At the time of the purchase, Cobblestone's intent was to "expand the [P]roperty" and operate "a successful Airbnb business." Shortly after purchasing the Property, Cobblestone began renting it as a short-term rental (STR).

¶3 The Property is and has always been located within South Weber's agricultural zone. Since 2016, the permitted uses for an agricultural zone have been limited to the following:

• accessory uses and buildings;

• agriculture;

• animal keeping on lots at least one-half acre in area;

• dwellings, one-family;

• farm industry on parcels or lots five acres or larger;

• fruit and vegetable stands of the sale of produce grown on the premises or of agricultural products used on the premises;

• home occupations, except preschools and daycare;

• mobile businesses; and pets, the keeping of household pets.

See South Weber, Utah, Code § 10-5E-2. STRs were not included among the conditional uses for an agricultural zone. See id. § 10-5E-3.

¶4 In May 2019, South Weber adopted an ordinance (the Ordinance) regulating "short-term or vacation rentals." Among other things, the Ordinance required a conditional use permit "for each unit used as a short-term or vacation rental, regardless of the zone, type, or primary use of the property." Id. § 10-18-3(A). The Ordinance further required that "[a]s a condition of receiving a conditional use permit and prior to conducting business, the applicant shall ... [a]pply for and pay the annual City business license fee, with the license to be issued after the conditional use permit is granted." Id. § 10-18-3(D)(2). At the same time that the Ordinance was enacted, South Weber also added "short-term or vacation rental" to the list of businesses for which "it shall be unlawful ... to operate ... within [South Weber] without first making an application to [South Weber] and obtaining a business license." Id. § 3-2-1(A)(7).

¶5 Following enactment of the Ordinance, Cobblestone applied for a conditional use permit so that it could continue using the Property as an STR. It also submitted an application for a business license.

¶6 In August 2019, South Weber City's Planning Commission held a meeting during which it approved Cobblestone's conditional use permit application subject to a number of conditions. After the conditional use permit was approved, the South Weber City Manager "reminded those in attendance [at the meeting] that the conditional use permit is not the business license" and that "there are still a few steps that need to be reviewed for the business license for [the Property]."

¶7 Approximately one month later, Cobblestone was issued a series of three "strikes" for violations of the conditional use permit. Thereafter, the Planning Commission met to discuss concerns over the conditional use permit. Based on the evidence that had been presented, the Planning Commission voted to immediately revoke Cobblestone's conditional use permit.

¶8 In November 2019, the South Weber City Council held a meeting during which it discussed revoking Cobblestone's conditional use permit. The City Council acknowledged there was some "misunderstanding" regarding whether the power to revoke a conditional use permit belonged to the Planning Commission or to the City Council, but ultimately it agreed with the Planning Commission's decision and voted to immediately revoke Cobblestone's conditional use permit.

¶9 Cobblestone appealed the City Council's decision administratively. In its appeal, Cobblestone argued, among other things, that its use of the Property as an STR was "a continuously maintained nonconforming use." It simultaneously filed an affidavit of conforming use with South Weber. In April 2020, the City Council's decision was reversed on procedural grounds and the matter was remanded to the City Council for further action.¹

¶10 In June 2020, police were dispatched to the Property after a neighbor witnessed an altercation involving people renting the Property, during which a firearm was discharged multiple times.² One month later, South Weber filed a complaint in district court seeking to enforce its ordinances against Cobblestone and for declaratory judgment that Cobblestone's use of the Property as an STR is not a legal nonconforming use and that it is therefore subject to the Ordinance. South Weber also filed a motion for a temporary restraining order and preliminary injunction preventing Cobblestone from operating any business at the Property. In its motion, South Weber argued it was entitled to injunctive relief pursuant to Utah Code section 10-9a-802. Under that section, a municipality may seek enforcement of its ordinances by instituting, among other things, injunctions enjoining the unlawful use, and "[a] municipality need only establish the violation to obtain the injunction." Utah Code Ann. § 10-9a-802(1)(a) (LexisNexis Supp. 2021). Shortly thereafter, the parties stipulated to a partial preliminary injunction under which Cobblestone was enjoined from using the Property for any business activity except "short term rental."

¶11 In November 2020, the district court held a hearing on the request for injunction. At the close of the hearing, the court granted South Weber's motion and enjoined Cobblestone, under Utah Code section 10-9a-802, from operating the Property as an STR without a valid business license. The court held that Cobblestone's use of the Property as an STR without a business license was a violation of the Ordinance, that Cobblestone's use of the Property did not constitute a nonconforming use that would exempt it from the Ordinance, and that none of the defenses Cobblestone raised precluded entry of the injunction. In its written order, the court explained that STRs "are not included" in the South Weber City Code's (South Weber Code) list of permitted uses, and "[t]hey would have to be ... for [Cobblestone] to prevail on [its] claim that [its] use of the Property is a nonconforming use." The court also noted the use of the Property as an STR did not fall within the definition of "Dwelling, one-family," which was one of the "permitted uses closest to [Cobblestone's] use of the Property."

¶12 Following entry of the district court's order, the parties filed a stipulation and motion for final judgment. The court granted the motion and entered a final judgment on December 4, 2020, providing that the preliminary injunction "remains in full force and effect unless altered by this Court or any ruling on appeal."³

ISSUES AND STANDARDS OF REVIEW

¶13 Cobblestone now appeals and raises two issues for our review. First, Cobblestone argues the district court erred in interpreting the South Weber Code to determine that Cobblestone's use of the Property as an STR was not a permitted, legal nonconforming use. "The proper interpretation and application of a statute is a question of law which we review for correctness, affording no deference to the district court's legal conclusions." Ellison v. Stam , 2006 UT App 150, ¶ 16, 136 P.3d 1242 (quotation simplified). "We apply the same standard to the [district] court's interpretation of an ordinance." Town of Alta v. Ben Hame Corp. , 836 P.2d 797, 800 (Utah Ct. App. 1992).

¶14 Second, Cobblestone argues that even if its use of the Property as an STR does not constitute a legal nonconforming use that would exempt it from the business license requirement, South Weber should be estopped from enforcing the Ordinance's business license requirement under the doctrine of equitable estoppel. "The issue of whether equitable estoppel has been proven is a classic mixed question of fact and law." Iota, LLC v. Davco Mgmt. Co. , 2012 UT App 218, ¶ 12, 284 P.3d 681 (quotation simplified). Therefore, we grant the district court's decision "a fair degree of deference when we review ... whether the requirements of the law of estoppel have been satisfied." Id. (quotation simplified). We will overturn a district court's decision to grant an injunction only if the court abused its discretion. See Carrier v. Lindquist , 2001 UT 105, ¶ 26, 37 P.3d 1112.⁴

ANALYSIS

I. Cobblestone's Use of the Property as an STR Was Not a Permitted, Legal Nonconforming Use.

¶15 Cobblestone first argues the district court erred in determining that its use of the Property as an STR prior to the adoption of the Ordinance was not a permitted, legal nonconforming use. We disagree.

¶16 The South Weber Code specifies the zoning classifications applied to property within South Weber. It provides,

No land shall be used or occupied, no building or structure shall be designed, erected, altered, used or occupied for use, except for uses specifically permitted on the land upon which the building or structure is located or erected or use established as permitted in the regulations for the zone in which said land is located.

South Weber, Utah, Code § 10-11-6(A). However, the South Weber Code also allows

for the continuation of use of any building structures, ... which either existed as a legal use before the effective date hereof or which was lawfully operated or used thereafter in accordance with the

...