2007 Autumn, Pg. 6. A Brief History of Variance Standards for the Municipal Law Practitioner.

• Author: By Attorneys Christopher L. Boldt and Sharon Cuddy Somers

New Hampshire Bar Journal

2007.

2007 Autumn, Pg. 6.

A Brief History of Variance Standards for the Municipal Law Practitioner

New Hampshire Bar JournalAutumn 2007, Volume 48, No. 3Municipal LawA Brief History of Variance Standards for the Municipal Law PractitionerBy Attorneys Christopher L. Boldt and Sharon Cuddy Somers"It is probably safe to say that no single statutory provision has been the source of more litigation . . . or more misunderstanding."(fn1)

Introduction

As Judge Horton noted in Grey Rocks Land Trust v. Town of Hebron, "anyone who attempts to organize and set forth a clear picture of the American law on variances either (a) has not read the case law, or (b) has simply not understood it."(fn2) Bearing in mind that wise statement, this article attempts to summarize the New Hampshire Supreme Court decisions that discuss the standard for variances. We hope to show that New Hampshire variance jurisprudence continually evolves, and we leave it to the reader to determine whether this article has successfully avoided, or sadly confirmed, Judge Horton's unfavorable prognosis.

Variance criteria are identified by statute with the "diminution in value" element referenced in case law. Each applicant must satisfy all of the five requirements to be granted a variance:

1. that a denial of the variance would result in unnecessary hardship to the applicant;

2. that no diminution in value of surrounding properties would occur;

3. that the proposed use would not be contrary to the spirit of the ordinance;

4. that granting the variance would not be contrary to the public interest; and

5. that granting the variance would do substantial justice.(fn3)

   While each of the five criteria must be met, much of the case law contains analysis of the first criterion - unnecessary hardship. As the cases keep appearing before the Court, however, the remaining four elements are gaining momentum and importance.

   The article begins with a discussion of the Court's hard-line approach to the hardship variance criterion in Grey Rocks. The next section moves on to the Court's first application of the more lenient approach to the hardship requirement as adopted in Simplex Technologies v. Town of Newington.(fn4) The third section then describes the Court's distinction of area variances from use variances, and the new analysis created for area variances in Boccia v. City of Portsmouth.(fn5) The next section outlines the Court's refinement of the hardship criterion in cases following the Simplex and Boccia analyses. Finally, the last section contains the Court's most recent clarifications regarding the other four variance elements in the statute: (1) diminution of property values of surrounding properties; (2) spirit and intent of the ordinance; (3) the public interest; and (4) substantial justice.(fn6)

   The Court's decisions have marked an unsettled and shifting course for boards, courts, and land-use practitioners to follow when addressing variance issues. The Supreme Court is divided on variance standards and has created, for the first time, a distinction between "use" and "area" variances, distinguishing the requisite elements of "unnecessary hardship" under each type. The justices' debate and discussion through the cases is certainly instructive and intellectually challenging. The current variance standards, however, will likely be further refined and clarified as the Court receives the next wave of variance appeals. Therefore, caution should be used when advising potential applicants and boards. The particular facts of each application and the depth of the presentation to a zoning board of adjustment have never been more important.

   1. The World According to Grey Rocks - the Pre-Simplex Standard

      If in the beginning was the Word, in the case of a variance request, the word was an emphatic "NO". Variances were not favored under statute or case law for any reason. A variance applicant faced a daunting, uphill battle for the grant of a variance. The first hurdle for meeting the variance criteria - unnecessary hardship - was incredibly high. It required that "the deprivation resulting from application of the ordinance must be so great as to effectively prevent the owner from making any reasonable use of the land."(fn7) Moreover, the hardship itself must result from "some unique condition of the parcel of land distinguishing it from others in the area. . . . [so that it is the] uniqueness of the land, not the plight of the owner, [which] determines whether a hardship exists."(fn8) The high standard set for proving unnecessary hardship is outlined in Grey Rocks.

      The variance analysis used in Grey Rocks required the landowner to prove two things: (1) that no reasonable use could be made of the land without the variance; and (2) that this was due to unique conditions of the land that distinguish it from the surrounding area.(fn9) In this case, the Supreme Court found the variance applicant, Newfound Lake Marina, had not met its burden of proof regarding these two criteria and reversed the variance awarded by the Hebron ZBA and upheld by the Grafton County Superior Court.(fn10) The marina had requested a variance to build a fifth boat-storage building on its 35-acre tract that would be 450 feet closer to the abutter, Grey Rocks, than the existing buildings. The marina was a pre-existing non-conforming use in the Town's "Lake District," which was subject to an ordinance with purposes limited to "protect [scenic, recreational and environmental] values and encourage only such further developments as will not harm the environment or destroy this district or any part thereof as a natural and scenic resource of the Town."(fn11) In its appeal, Grey Rocks argued that the ZBA had made no factual findings on the record relating to hardship and no supporting facts appeared in the record, making the trial court's affirmance of the variance neither reasonable nor legally correct.(fn12) The Supreme Court agreed and found that the marina failed to meet the two aspects of the hardship analysis. The Court held that the "uncontroverted fact that the marina had been operating as a viable commercial entity for several years prior to the variance application is conclusive evidence that a hardship does not exist."(fn13) The Court also found that the ZBA had failed to find that the applicant's land was unique.(fn14)

      The marina asserted it had the right to develop its existing non-conforming use in a way that would result in a mere intensification of the use via natural expansion and growth of trade. The Court, however, rejected this argument because the proposed expansion would be too substantial.(fn15) In so doing, the Supreme Court noted in dicta that it had "never permitted an expansion of a non-conforming use that involved more than the internal expansion of a business within a pre-existing structure."(fn16) In conclusion on this point, the Court held "as a matter of law that the construction of a new building. . . would substantially impair the natural scenic, recreational and environmental values of the surrounding property, contrary to the purposes of the Lake District, and is therefore beyond the scope of the `natural expansion'. . . to which the marina is entitled."(fn17)

      The lone dissenter in Grey Rocks, Justice Horton, was the first to substantially suggest that the hardship analysis used by the Court was on a collision course with the constitutional protection of property rights. The New Hampshire Constitution sets forth that a person "be protected in the use and enjoyment of one's property."(fn18) Justice Horton compared the hardship standard as a "substantial taking."(fn19) After rejecting the "no reasonable use" standard because it had "stopped off the safety valve" that variances were intended to provide, Justice Horton suggested that either an "arbitrary and capricious" standard or a "reasonable use" approach would be more favorable, fair, and in compliance with the constitutional and statutory mandates.(fn20) Under an "arbitrary and capricious" standard, a board or court would start with the basic acknowledgment of the right to use the property and then determine that an "unnecessary hardship" existed based on an analysis of "`whether the zoning limitation, viewing the property in the setting of its environment, is so unreasonable as to constitute an arbitrary and capricious interference with the basic right of private property.'"(fn21) Under the "reasonable use" approach, a board and/or court would consider whether "`the proposed use is reasonable and the restriction legitimate but more burdensome than was intended, then the restriction may be modified so long as there is no impairment of the public purpose of the regulation.'"(fn22)

      While stating that he would have affirmed the trial court's grant of a variance, Justice Horton reminded the Court that the "ladder of review mandates that we not substitute our judgment for that of the zoning board, but give appropriate deference to each stopping point on the ladder."(fn23) He also rejected the theory that no variance would be available where an existing use is in place: "[t]his may be appropriate when the subject property is small, or `used up,' but it is not appropriate when there is a reasonably useful portion of that property."(fn24)

   2. Simply Simplex - the "New" Standard

      Justice Horton's dissent in Grey Rocks was a "voice crying in the wilderness" for approximately nine years until the Court rendered its decision...