SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is before the Administrative Law Court (ALC or Court) upon Respondent’s, South Carolina Department of Transportation (SCDOT or Department), Motion for Summary Judgment filed on November 30, 2005. The Department argues that S.C. Code Ann. § 57-25-140(E) and 25A S.C. Code Ann. Reg. 63-346(B)(1)(b) (Supp. 2005) of the Highway Advertising Control Act, §§57-25-110, et seq. (2006) (HACA) prohibit the granting of an outdoor advertising sign permit to Petitioner, thus requiring summary judgment to be entered in favor of SCDOT. In response to SCDOT’s Motion for Summary Judgment, Petitioner moved for summary judgment on the grounds that the highway adjacent to where he seeks to erect a sign was not controlled accessed at the time the permit application was submitted to SCDOT; therefore, Section 57-25-140(E) and regulation 63-346(B)(1)(b) do not apply. The Court heard counsel’s arguments on this matter on March 1, 2006.

STANDARD OF REVIEW

Rule 68 of the Administrative Law Court Rules provides that “[t]he South Carolina Rules of Civil Procedure may, where practicable, be applied in proceedings before the Court to resolve questions not addressed by these rules.” Rule 56(c), SCRCP, and the accompanying case law, set forth that a party may bring a motion for summary judgment. Summary judgment is appropriate when it is clear that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Gadson v. Hembree, 364 S.C. 316, 613 S.E.2d 533 (2005); Cisson Constr. Inc. v. Reynolds & Assoc. Inc., 311 S.C. 499, 429 S.E.2d 847 (Ct. App. 1993). In determining whether summary judgment is proper, the court must construe all ambiguities, conclusions, and inferences arising from the evidence against the moving party. Byers v. Wesinghouse Elec. Corp., 310 S.C. 5, 425 S.E.2d 23 (1992). Summary judgment is not appropriate where further inquiry into the facts of the case is desirable to clarify the application of the law. Wogan, et al. v. Kunze, et al., 366 S.C. 583, 623 S.E.2d 107 (2005). Because it is a drastic remedy, summary judgment should be cautiously invoked to ensure that a litigant is not improperly deprived of a trial on disputed factual issues. Helena Chem. Co. v. Allianz Underwritters Ins. Co., 357 S.C. 631, 594 S.E.2d 455 (2004).

FACTS

Viewing the evidence in the light most favorable to the Petitioner, on June 4, 2004, Petitioner applied to SCDOT for an outdoor advertising permit to erect a billboard near U.S. Route 176. Petitioner has a twenty (20) year lease for the placement and maintenance of a billboard or sign on property owned by Bob and Nell Cantrell (Cantrells) located adjacent to U.S. 176. The proposed location of the sign is within 500 feet of the interchange of Valley Falls Road and U.S. Route 176 in Spartanburg County, South Carolina. After receiving Petitioner’s application, SCDOT notified Petitioner in accordance with 25A S.C. Code Ann. Regs. 63-349(L) (Supp. 2005), that its investigation of the outdoor advertising permit application would take longer than thirty (30) days.[1]

During the course of that investigation, SCDOT found that U.S. Route 176 was part of a highway widening project. The project included plans, dating back to 2001, to construct concrete barrier walls to control access. On or about August 31, 2004, a ramp was built between the proposed sign site and U.S. Route 176. In addition, a concrete median barrier wall was constructed between the north and southbound lanes of U.S. Route 176. Direct access to the various properties along U.S. Route 176 that were adjacent to the proposed sign site was no longer allowed. The proposed site is now directly in front of the newly relocated off-ramp onto U.S. Route 176.[2] Accordingly, on September 16, 2004, SCDOT denied Petitioner's application on the grounds that the proposed sign site was within 500 feet of an interchange of a controlled access facility and, therefore, was prohibited under S.C. Code Ann. § 57-25-140(E) and 25A S.C. Code Ann. Regs. 63-346(B)(1)(b) (Supp. 2005).[3]

DISCUSSION

Petitioner argues that how and when “controlled access” was established for U.S. Route 176 is the controlling issue in this case for the purposes of determining whether or not Petitioner was entitled to the issuance of an outdoor advertising permit from SCDOT. S.C. Code Ann. 57-25-140(E) and 25A S.C. Code Ann. Regs. 63-346(B)(1)(b) (Supp. 2005) set forth the spacing requirements for signs along controlled access facilities. Section 57-25-140(E) specifically provides that:

No sign may be located on the interstate system or controlled access federal-aid primary route adjacent to or within 500 feet of an interchange or a rest area measured along the interstate or controlled access primary highways from the nearest point of the beginning or ending of pavement widening at the exit from or entrance to the main-traveled way.

Petitioner does not dispute that its proposed outdoor advertising site is now within 500 feet of an interchange of a controlled access route. Nor does the Petitioner dispute that Section 57-25-140(E) prohibits locating an outdoor advertising site within 500 feet of an interchange of a controlled access route. Rather, Petitioner submits that, “at the time of filing of Petitioner’s permit application, the location of the sign proposed to be erected along U.S. Route 176 was not on a federal-aid primary route that was ‘constructed to controlled access standards’ as provided in Section 57-25-140(E) and Regulation 63-346(B)(1)(b), or as otherwise denominated as ‘controlled access’ as provided in subsection (E).” Because the interchange of Valley Falls Road and U.S. Route 176 was not a controlled access route when Petitioner applied for its permit, Petitioner contends that it is entitled to receive a permit at the location. In other words, Petitioner contends that the operative time for determining road status was at the time of submission of the permit application. Furthermore, the Petitioner argues that if the facility was not controlled access when the application was made, then the 500 feet prohibition does not apply.

Petitioner offers the following arguments in support of its position:

Vested Rights

Petitioner argues that its rights to the outdoor advertising permit vested when it submitted its application. In other words, the review of whether or not to grant a permit is limited to the facts that existed on the date of the application. If those facts subsequently change or evolve so that Petitioner would no longer be entitled to receive the permit, they must be ignored because an applicant’s right to the permit vests at the time of application. In support of that proposition, Petitioner cites Pure Oil Div. v. City of Columbia, 254 S.C. 28, 173 S.E.2d 140 (1970) and Scott v. Greenville County, 716 F.2d 1409 (1983).[4]

South Carolina courts have recognized that “when a zoning or building permit has been properly issued and the owner has incurred expenses in reliance thereon, he acquires a vested property right therein of which he cannot be deprived without cause or in the absence of public necessity.” Pure Oil, 173 S.E.2d at 143. In Pure Oil, however, the respondents had not been issued a zoning permit; instead they acted in reliance on a zoning ordinance as it existed at the time of their filing of a permit application for the construction and operation of a filling station. The Court held that:

We see no sound reason to protect vested rights acquired after a permit is issued, and to deny such protection to similar rights acquired under an ordinance as it existed at the time a proper application for a permit is made. In both instances, the right protected is the same, that is, the good faith reliance by the owner on the right to use his property as permitted under the Zoning Ordinance in force at the time of the application for a permit.

Likewise, in Scott, supra, the Appellant asserted that he had a vested interest in the issuance of a building permit under the zoning ordinance in effect at the time of his application. The Court, citing Pure Oil, held that “Scott enjoyed an entitlement to the issuance of a permit upon presentation of an application and plans showing a use expressly permitted under the then-current zoning ordinance. This entitlement extended to Scott even though he held only an option to purchase the property or similar interest, rather than actual legal title.” 716 F.2d at 1418 (citations omitted). Therefore, Scott had “a cognizable property interest, rooted in state law.” Id.

However, Pure Oil and Scott[5] are distinguishable from the case at hand. Both cases involved zoning ordinances that specifically established how property owners could use their property. The litigants were vested in their legal right to use their property in the manner permitted by the applicable zoning ordinance because the ordinance “expressly permitted” that use. In other words, property owners who in good faith rely on their right to use their property in the manner permitted by a zoning ordinance “in force at the time of the application for a permit” have a vested right to that use. But here, there is no legally “vested” right for Petitioner to have a sign permit until the permit is investigated and approved by the SCDOT.

In general, the ALC has subject matter jurisdiction to decide these cases pursuant to S.C. Code Ann. 1-23-600(B) (2005). The Administrative Law Judge (ALJ) is the fact-finder in the contested case and hears these cases de novo. Brown v. S.C. Dep't of Health & Envtl. Control, 348 S.C. 507, 560 S.E.2d 410 (2002); Reliance Ins. Co. v. Smith, 327 S.C. 528, 489 S.E.2d 674 (Ct. App. 1997). Since the ALJ determines if a permit should be granted, no permit is authorized until that determination is made. In making its determination, the ALJ should consider any relevant evidence that reflects upon whether or not the permit should be granted. 89 C.J.S. Trial § 593 & 603(b) (1955). . The ALJ is not limited to considering the exact evidence considered during the review by the department. Marlboro Park Hosp. v. South Carolina Dept. of Health and Envtl. Control, 358 S.C. 573, 595 S.E.2d 851 (2004). Moreover, “[r]elevant evidence of changing conditions and other circumstances external to an application should be considered by [the ALJ].” 53 C.J.S. Licenses § 43 (1987); see also McDonald v. Dep’t of Banking and Finance, 346 So.2d 569 (Fla. Dist. Ct. App. 1977) (“The hearing officer's decision to permit evidence of circumstances as they existed at the time of the hearing was correct.”). Therefore, evidence that the proposed sign site was within 500 feet of an interchange of a controlled access route and thus the facts no longer support the issuance of the permit is relevant and admissible in the case before the ALJ. See Rule 401, SCRE.

Furthermore, an outdoor advertising permit is contingent on compliance with the HACA. There is no provision in the HACA granting an applicant a right to a permit until it is approved. Rights are vested “only when they are absolute, complete and unconditional, and not dependent upon any future act, contingency or decision.” U.S. Rubber Co. v. McManus, 211 S.C. 342, 45 S.E.2d 335, 338 (1947). The provisions of the regulation governing the granting of an outdoor advertising permit further reflect the discretionary aspect of these permits. S.C. Code Ann. Regs. 63-349(L) (Supp. 2005) provides that:

Upon receipt of the permit application, the District Sign Coordinator will inspect the sign site in order to ascertain if the location legally qualifies. The Department reserves the right to consider any application for a sign permit for up to 30 days from the date the application is submitted.

(emphasis added). In fact, S.C. Code Ann. Regs. 63-349(H) (Supp. 2005) provides that “[c]onstruction of a sign must not, under any circumstances, begin until the permit, having been approved by the Department, has been received by the applicant.” Also closely related to this case, S.C. Code Ann. Regs. 63-349(W) (Supp. 2005) provides that:

The Department may issue a permit for a sign which could otherwise be permitted even though it is located within the proposed right-of-way for a highway for which the alignment has been approved but which has not yet begun construction or even though it is located within the proposed right-of-way for an interchange for which the location has been approved but which has not yet begun construction provided that in either such case the sign owner and the landowner must agree to remove the sign without cost to the Department and without compensation within thirty (30) days after written notice from the Department to the sign owner and landowner at the addresses provided in the application.

Therefore, the issuance of an outdoor advertising permit is not a “right,” but rather a privilege, which is subject to conditions imposed by the State in the exercise of its regulatory powers. Thus, Petitioner has no vested or unconditional right to an outdoor advertising permit.

Moreover, vested rights cannot arise from an assumption that public regulatory requirements will remain fixed. See S.C. Dep't of Revenue and Taxation v. Rosemary Coin Machines, Inc., 331 S.C. 234, 500 S.E.2d 176 (Ct. App. 1998) (noting that licenses and permits granted by the state are privileges rather than contracts and are subject to change by state law at any time for the public good). Here, regardless of whether Petitioner was aware that a ramp and a concrete wall was scheduled to be built between the proposed sign site and U.S. Route 176, the undisputed evidence is that the SCDOT investigation revealed the pending construction. In fact, the construction was completed shortly after the application was received and before the Department issued its decision. Accordingly, when Petitioner applied for the permit, the construction that ultimately resulted in the location being unacceptable was nearing completion.

This distinction was also recognized in Sherman v. Reavis, 273 S.C. 542, 257 S.E.2d 735 (1979). In Sherman, the Court found that its prior holding in Pure Oil was “directed towards the protection of property rights acquired by applicants who have incurred expenses or substantially changed their position under an issued permit, or who have relied in good faith on the right to use property as permitted under zoning ordinances in force at the time application was made.” 257 S.E.2d at 737 (citations omitted). Accordingly, the Court held that in instances in which the applicant did not reasonably rely upon an ordinance to “construct billboards upon their property,” a municipality may properly refuse a building permit [to construct billboards upon their property] when such use is repugnant to a pending and later enacted zoning ordinance. Id.

Therefore, unlike Pure Oil, the evidence to be considered in determining whether or not to grant an outdoor advertising permit is not static or absolute on the date of submission, but subject to change based on the investigation. During the investigation period, the road conditions may change and/or other criteria for a permit may change. SCDOT, and thus this Court, is entitled to consider those changed conditions, including evidence of the status of the road as a controlled access facility, when determining whether the permit should be issued.

Estoppel and Good Faith Application

Petitioner also argues that it should not be imputed with knowledge that the proposed site U.S. Route 176 was being made a controlled access highway, since, at the time it filed its application in June 2004, the SCDOT permitting staff also did not have that knowledge. In its written response to SCDOT’s summary judgment motion, Petitioner simply argued that the assurances from SCDOT employee, Joyce Gardner, that the portion of U.S. 176 in front of the Property was not a controlled access highway may rise to the level of equitable estoppel to the extent that SCDOT is now contending that “controlled access” was established prior to Petitioner’s filing of its June, 2004 application.

However, the issue in this case is not when the parties knew U.S. Route 176 was to become a controlled access highway in front of the sign site. Rather, the issue is whether Petitioner has sufficiently complied with the provisions in the HACA and the accompanying regulation to warrant Fairway Outdoor Advertising being granted an outdoor advertising permit at the proposed site. Thus, I do not find that Petitioner’s argument relates to any issue before this Court.

Furthermore, viewing the evidence in the light most favorable to the Petitioner, Petitioner’s employee, Robert Bowman, was told that the “interchange [at the proposed sign site] was going to be redone” and that they were taking some of the property owners’ land. He also understood that a ramp was going to be placed at the interchange. He asked if the ramp was going to be a problem and was told by Joyce Gardner, the SCDOT employee who was handling the permit application, that “control access did not come up that far.” However, the deposition of SCDOT employee Steven Gwinn, presented by Petitioner, clearly established that the project to make U.S. Route 176 a controlled access highway has been underway for quite some time. SCDOT has also been intimately involved in the projects planning and construction. Therefore, the facts at issue are not that SCDOT had no knowledge that U.S. Route 176 was being converted into a controlled access highway at the proposed site, but that Ms. Gardner, at some point in the application process, lacked knowledge of that conversion.

The State may be subject to the estoppel doctrine where its officers or agents act within the proper scope of their authority. Abbeville Arms v. City of Abbeville, 273 S.C. 491, 257 S.E.2d 716 (1979). Nevertheless, the doctrine of estoppel may not be applied to deprive the government of the due exercise of its regulatory power, or to frustrate the purpose of its laws or thwart its public policy. Carman v. S.C. Alcoholic Beverage Control Comm'n, 315 S.C. 320, 433 S.E.2d 885 (Ct. App. 1993). More importantly, the government cannot be estopped by erroneous conduct or statements of its officers or agents which have been relied upon by a third party to his detriment. Goodwine v. Dorchester Dept. of Social Services, 336 S.C. 413, 519 S.E.2d 116 (Ct. App. 1999).

Here, there is no evidence that Ms. Gardner possessed the authority to bind SCDOT by expressing her belief that the controlled access highway did not reach the proposed site or that her statement could be reasonably perceived as approving the location of the sign. Ms. Brown’s statement is simply not the type of assertion that the South Carolina courts have found to be binding upon governmental bodies. See Abbeville Arms v. City of Abbeville, supra. (“the Abbeville City Council was acting within the scope of its authority in enacting a zoning ordinance, including an Official Zoning Map”); Townes Assoc’s, Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976)(“where the officers or agents of a governmental body act within the proper scope of their authority, a municipality cannot escape liability on a contract within its power to make, on the ground that the officer executing it in its behalf was not technically authorized to do so, where he was the proper person to enter into such a contract.”). Rather, her statement is analogous to the facts in Goodwine, supra. There, the court recognized that even if the State employee had made a statement within her “scope of employment,” she had no discretion to “waive changes in eligibility for public assistance benefits.” 519 S.E.2d at 119. Accordingly, the Court held that estoppel did not apply. Id. Likewise, in this case, there is no evidence or genuine dispute that Ms. Gardner was authorized to waive the requirements of the HACA. In fact, Mr. Bowman testified that Ms. Gardner never represented to him she would issue him a permit or that the SCDOT would waive the requirements of the HACA. Therefore, estoppel does not apply.

Acquisition of its Property Rights

Finally, Petitioner argues that by virtue of its lease agreement with the Cantrells, it stands in the shoes of the landowners and holds a property right to direct access to U.S. 176. Furthermore, SCDOT never acquired or condemned its leasehold interest in the Property or direct access thereto from U.S. 176. Therefore, citing Gray v. S.C. Dep’t of Highways & Public Transp., 311 S.C. 144, 427 S.E.2d 899 (Ct. App. 1992), Petitioner argues that SCDOT should not have denied its permit request because SCDOT never fully controlled its access rights to U.S. 176. In other words, a lessee of property has an interest in real property and access thereto that cannot be taken by SCDOT without the payment of just compensation. Id.

However, the issue of just compensation and unconstitutional taking of a property right is not properly before this Court. Instead, the appropriate redress of a takings claim is in another forum that has jurisdiction to award money damages. See Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992). Therefore, to the extent that this issue relates to a takings claim, damages, or just compensation for the taking of a right, this tribunal declines to address those issues. Furthermore, there is no dispute that by the end of August of 2004, SCDOT had physically blocked direct access from the Cantrell’s property to U.S. 176 with the installation of concrete barriers. Accordingly, the issue before this Court is whether Section 57-25-140(E) bars the granting of a permit under these circumstances.

CONCLUSION

I find that Petitioner's outdoor advertising permit application failed to satisfy the requirements of S.C. Code Ann. §57-25-140(E) and 25A S.C. Code Ann. Reg. 63-346(B)(1)(b) (Supp. 2005). I also find that Petitioner has no vested right to an outdoor advertising permit on the date of submission or filing of the permit application. I further find that any changes or evidence discovered during the investigative period can be considered by SCDOT and submitted before the ALJ in order to render the final agency decision. As such, it was proper for SCDOT to consider U.S. Route 176 as a controlled access facility. Therefore, based upon the application of the law as set forth above and the uncontroverted evidence that the proposed sign site is within 500 feet of an interchange of a controlled access federal-aid primary route, I find that there is no material issue of fact and summary judgment to SCDOT is appropriate on this issue.[6]

ORDER

IT IS THEREFORE ORDERED that SCDOT’s Motion for Summary Judgment is GRANTED.

IT IS FURTHER ORDERED that Petitioner’s Motion for Summary Judgment is DENIED.

AND IT IS SO ORDERED.

____________________________________

Ralph King Anderson, III

Administrative Law Judge

July 20, 2006

Columbia, South Carolina