SHELLY MATERIALS, INC., APPELLANT, v. THE CITY OF STREETSBORO PLANNING AND ZONING COMMISSION ET AL., APPELLEES.
No. 2018-0237
SUPREME COURT OF OHIO
November 5, 2019
2019-Ohio-4499
STEWART, J.
Submitted March 26, 2019
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Shelly Materials, Inc. v. Streetsboro Planning & Zoning Comm., Slip Opinion No. 2019-Ohio-4499.]
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2019-OHIO-4499
SHELLY MATERIALS, INC., APPELLANT, v. THE CITY OF STREETSBORO PLANNING AND ZONING COMMISSION ET AL., APPELLEES.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Shelly Materials, Inc. v. Streetsboro Planning & Zoning Comm., Slip Opinion No. 2019-Ohio-4499.]
Zoning—Surface mining as a permitted conditional use—Administrative appeals—
(No. 2018-0237—Submitted March 26, 2019—Decided November 5, 2019)
APPEAL from the Court of Appeals for Portage County, No. 2017-P-0025, 2017-Ohio-9342.
{¶ 1} The questions raised in this appeal concern the scope of review conducted by a court of appeals in an
Facts and Procedural History
{¶ 2} Appellant, Shelly Materials, Inc. (“Shelly“), entered into a mineral-rights lease in 2015 for an approximately 225-acre horse-farm property, commonly called Sahbra Farms, located in the city of Streetsboro (“the city“). The property is zoned “R-R, Rural Residential District,” and at the time, surface mining was allowed as a conditional use in a rural-residential district upon the approval of an application for a conditional-use permit. Shelly leased the mineral rights of the Sahbra Farms land to engage in surface mining of sand and gravel. When Shelly entered into the lease, surface mining had been conducted on an adjacent property by a different company for a number of years as a permitted conditional use.
{¶ 3} Some city residents became aware of Shelly‘s plan to convert the horse farm into a mining operation and, under the name “Stop Sahbra Dig,” submitted an application to amend the city‘s zoning code to remove surface mining as a conditional use in all districts where it was permitted, including in a rural-residential district. The city‘s planning and zoning director, an appellee in this case,1 agreed with the residents and recommended to appellee Streetsboro Planning and Zoning Commission that surface mining no longer be permitted as a conditional use in any district. The commission then recommended that Streetsboro City Council pass an ordinance to remove surface mining from the zoning code, and city council eventually
{¶ 4} The commission conducted three hearings on Shelly‘s application, after which it unanimously issued written findings of fact and conclusions of law ultimately determining that “Shelly did not establish by clear and convincing evidence that Shelly‘s proposed conditional use met the relevant standards outlined in the Streetsboro Codified Ordinances necessary for the issuance of a conditional use permit.” Streetsboro Codified Ordinance 1153.03 sets forth the requirements an applicant must meet to obtain a conditional-use permit:
(a) The applicant shall be required to establish by clear and convincing evidence that the general standards of this Zoning Ordinance and this Chapter and the specific standards pertinent to each proposed use shall be met for the proposed use provided further that any requirements of this Zoning Ordinance for permitted use(s) within a district shall be applicable to any conditional use unless otherwise stated herein.
(b) The Planning and Zoning Commission shall determine if the proposed use complies with these regulations and shall insure [sic] that the specific standards and requirements of this Zoning Ordinance pertinent to the proposed use shall be satisfied.
(c) General Standards. The Planning and Zoning Commission shall review the particular facts and circumstances of each proposed use in terms of the following standards and shall find adequate evidence showing that such use of the proposed location:
(1) Will be harmonious with and in accordance with the general objectives or with any specific objective of the Streetsboro Development Policy Plan of current adoption;
(2) Will be designed, constructed, operated and maintained so as to be harmonious and appropriate in appearance with the existing or intended character of the general vicinity and that such use will not change the essential character of the same area;
(3) Will not be hazardous or disturbing to existing or future neighboring uses;
(4) Will not be detrimental to property in the immediate vicinity or to the community as a whole;
(5) Will be served adequately by essential public facilities and services such as highways, streets, police and fire protection, drainage structures, refuse disposal, and school; or that the persons or agencies responsible for the establishment of the proposed use shall be able to provide adequately any such service[;]
(6) Will have vehicular approaches to the property which shall be so designed as not to create an interference with traffic on surrounding public streets or roads.
(Underlining sic.)
{¶ 5} Among other conclusions, the commission stated that “Shelly‘s proposed use would be detrimental to the properties in the immediate vicinity as a whole and, thus, constitute[s] a substantial negative effect on neighboring property values.” In reaching this conclusion, the commission rejected an opinion offered by Shelly‘s certified real-estate appraiser that surface
{¶ 6} Shelly filed an
{¶ 7} The court of common pleas adopted the magistrate‘s decision over the city‘s objections, concluding that the commission acted arbitrarily and capriciously by denying Shelly‘s application for a conditional-use permit. The court held that the commission‘s denial of the application “is unsupported by the preponderance of substantial, reliable, and probative evidence.” The court also determined that the commission‘s denial of the application was “arbitrary and capricious,” because the commission had reviewed it in light of the city‘s recent zoning change to prohibit surface mining. The court stated that it was “probable” that the application “would not have ever been approved, given the prevailing position of the City and residents that surface mining is not in keeping with the Master Plan,” even though the city “had the opportunity for nearly two years” prior to the filing of the application to amend the zoning code to remove surface mining as a conditional use. (Emphasis sic.) The court of common pleas thus determined that “[t]he underlying motivation to deny the conditional use application emerges as a desire to deny all surface mining as a conditional use, rather than because [Shelly] failed to satisfy the standards set forth in” the city‘s zoning code.
{¶ 8} A divided panel of the Eleventh District Court of Appeals reversed the judgment of the court of common pleas. The majority found the issue regarding the fourth of the city zoning code‘s six criteria for granting a conditional-use permit—whether Shelly‘s proposed use would be detrimental to property in the immediate vicinity or to the community as a whole, Streetsboro Codified Ordinance 1153.03(c)(4)—to be “dispositive,” 2017-Ohio-9342, 104 N.E.3d 1, ¶ 32 (11th Dist.), and it accordingly did not address any other “separate issues” asserted in the appeal, id. at ¶ 15, including arguments that the commission had correctly determined that Shelly had failed to satisfy other provisions of Streetsboro Codified Ordinance 1153.03(c)
{¶ 9} After acknowledging that Shelly‘s expert “had 30 years of experience as an appraiser and had submitted a 76-page report in support of his opinion,” id. at ¶ 33, the majority nonetheless decided that the commission could have justifiably concluded that Shelly‘s expert lacked credibility, because he had “acknowledged that the comparison properties utilized to form his opinion were further away from the surface mine than the properties at issue,” id. at ¶ 36. In addition, the majority stated that the expert had “acknowledged that some of the properties in the comparison group were probably separated from mining operations by natural buffers, such as woods, furthering [sic] distinguishing the comparison properties from the properties at issue.” Id. After concluding that the commission had been justifiably entitled to reject the expert‘s opinion, the majority held that Shelly had failed to carry its burden to obtain the conditional-use permit. Id. at ¶ 37.
{¶ 10} We accepted jurisdiction over Shelly‘s appeal, 152 Ohio St.3d 1478, 2018-Ohio-1990, 98 N.E.3d 294, to consider three propositions of law:
- An administrative decision that is unconstitutional, illegal, arbitrary, capricious, or unreasonable, cannot be affirmed simply because it is supported by the preponderance of the evidence, nor can an unsupported decision be affirmed simply because it is not illegal or arbitrary; rather, a common pleas court must reverse if it finds any one of the statutory grounds for reversal of an administrative decision.
- It is the proper function of the court of common pleas in an appeal under
Ohio Revised Code 2506.01 to evaluate the character of evidence to determine if it was “substantial, reliable, and probative.” - It is not the function of a court of appeals in an appeal under
Ohio Revised Code 2506.01 to review the common pleas court‘s judgment de novo, but its review underR.C. 2506.04 is limited to “questions of law.”R.C. 2506.04 .
Analysis
{¶ 11} Shelly‘s principal argument is that the court of appeals exceeded the narrow scope of its review and conducted a de novo review of the commission‘s findings by substituting its judgment for that of the common pleas court with respect to the “dispositive” issue—whether the commission erred by finding that Shelly‘s expert lacked credibility.
{¶ 12} Decisions of administrative agencies are directly appealable to a court of common pleas. A common pleas court has jurisdiction to review final orders issued by “any officer, tribunal, authority, board, bureau, commission, department, or other division of any political subdivision of the state.”
{¶ 14} When considering Shelly‘s application for a conditional-use permit, the commission reviewed the standards set forth in Streetsboro Codified Ordinance 1153.03(c), including that the conditional use “[w]ill not be detrimental to property in the immediate vicinity or to the community as a whole,” Streetsboro Codified Ordinance 1153.03(c)(4). Addressing this standard, the commission determined that “[t]he appraisal data offered by Shelly‘s real estate appraiser did not reflect a valid comparison between the subject property and neighboring properties and the properties used in the appraiser‘s report.” For this reason, the commission concluded that “Shelly‘s real estate appraiser‘s testimony was flawed and contained incongruent real estate comparisons” and that the “appraiser‘s testimony showed that the value of four out of five homes in Streetsboro would likely suffer if Shelly‘s proposed use were to operate in its proposed location.”
{¶ 15} The court of common pleas determined that the commission had erroneously focused on the expert‘s sales data for particular houses, as opposed to his opinion that surface-mining operations would have no adverse effect on property values for the community as a whole. The court, quoting Streetsboro Codified Ordinance 1153.03(c)(4), stated that “the proper test is not the unsubstantiated speculation regarding the sale of any particular house; the test is whether the use will be ‘detrimental to property in the immediate vicinity or to the community as a whole.‘” In considering the impact that Shelly‘s mining operations would have on the community as a whole, Shelly‘s expert testified before the commission that he had found no recent sales that he could use for comparison that involved houses adjacent to property where mining operations were currently being conducted on land that had shortly before been used for a farm-type purpose. For that reason, he expanded his analysis to cover 12 house sales that had occurred since 2014 in the city and two neighboring townships that also had active surface-mining operations, stating that all of the houses were in relatively “close proximity” to nearby mining operations. The expert testified that he had employed a methodology in which he “analyzed a distance from an existing ongoing gravel and sand operation to the actual property that sold and tried to analyze those particular sales to the average sales in the local
{¶ 16} The city‘s planning and zoning director, who by his own admission was “not an appraiser,” testified before the commission that Shelly‘s application should be denied, in part because of the proposed mining operation‘s effect on property values. The director stated his opinion that there were “shortcomings” in Shelly‘s expert appraiser‘s analysis and explained what he viewed those shortcomings to be. The court of common pleas concluded that the planning and zoning director was not qualified to render an opinion about property appraisals and that the director‘s “unsubstantiated speculation is outweighed by the evidence from [Shelly‘s expert] as a matter law.”
{¶ 17} A party who disagrees with a decision of a court of common pleas in an
{¶ 18} The Eleventh District reversed the judgment of the court of common pleas on the grounds that the commission had a justifiable reason to reject Shelly‘s expert‘s opinion, because “the comparison properties utilized to form his opinion were further away from the surface mine than the properties at issue.” 2017-Ohio-9342, 104 N.E.3d 1, at ¶ 36. This was not a question of law for the court of appeals to decide in an administrative appeal under
{¶ 19} The Eleventh District concluded that Shelly‘s expert‘s failure to use appropriate comparables when offering his opinion that Shelly‘s operations would not be detrimental to property in the immediate vicinity was, in essence, a complete failure of proof pursuant to Streetsboro Codified Ordinance 1153.03(c)(4). Experts are not required to give precise opinions, but an expert‘s opinion is normally offered to a reasonable degree of certainty within the expert‘s field. See State v. Beasley, 153 Ohio St.3d 497, 2018-Ohio-493, 108 N.E.3d 1028, ¶ 162. To be sure, an expert‘s opinion may not be based on “mere possibility or speculation,” id., but when an expert‘s opinion on the value of real estate is based on “comparables” because there is no recent arms-length sale of the property in question, the
{¶ 20} In fact, at least one commission member during one of the hearings before the commission acknowledged the difficulty of obtaining direct comparisons of houses for purposes of appraisal when he questioned Shelly‘s expert appraiser:
[Commission member:] Did you find any comps at all—I grant you this would probably be very difficult—where you had property that was not already adjacent to a surface mine but rather was adjacent to a very pastoral, horse-farmish looking land and then became a surface mine and what would happen to the value of those farms?
[Shelly‘s expert:] Unfortunately not. I could not find—
[Commission member:] That‘s nearly impossible, I grant you.
{¶ 21} Given that the lack of comparable properties near the location of the proposed surface mine made it difficult to ascertain whether mining operations would be detrimental to property in the immediate vicinity, the opinion of an expert appraiser was important. No objections were made to Shelly‘s expert‘s qualifications to render an opinion, so the validity of his appraisal was ultimately a matter of credibility for the commission to determine. See Kokitka v. Ford Motor Co., 73 Ohio St.3d 89, 92, 652 N.E.2d 671 (1995). The court of common pleas, acting within the scope of its review under
{¶ 22} The dissenting opinion criticizes us for not addressing the court of appeals’ holding that that the trial court erred by putting the burden of proof on the wrong party. No additional discussion is necessary—in its decision adopting the magistrate‘s decision, the trial court stated:
A review of the record indicates that [Shelly] presented clear and convincing evidence during the Commission hearings relative to the general standards, the specific standards as to surface mining, and the specific objectives of the Master Plan. The Court finds that the Commission‘s decision to deny the conditional use application is unsupported by the preponderance of substantial, reliable, and probative evidence.
{¶ 23} Without question, the trial court properly recognized that Shelly had the burden of proving its entitlement to the conditional-use permit by clear and convincing evidence and that it had met that burden of proof. Indeed, the court of appeals recognized the same thing, stating that “[t]he flaw is that the magistrate fails to recognize that [Shelly] has the burden, and provided [the expert‘s] testimony lacks credibility, [Shelly] fails” (emphasis
{¶ 24} The dissent also asserts that the magistrate did not use the correct standard of review and that the trial court‘s “conclusory recitation of the zoning ordinance‘s requirements” cannot “magically turn the magistrate‘s obvious application of the wrong legal standard into something that passes legal muster.” Dissenting opinion at ¶ 38. This assertion improperly elevates a magistrate‘s decision over a judgment issued by a trial judge. “Civ.R. 53 places upon the court the ultimate authority and responsibility over the [magistrate‘s] findings and rulings.” (Emphasis sic.) Hartt v. Munobe, 67 Ohio St.3d 3, 5, 615 N.E.2d 617 (1993). Thus, we have held that a trial court “has the responsibility to critically review and verify to its own satisfaction the correctness of [a magistrate‘s decision].” Normandy Place Assocs. v. Beyer, 2 Ohio St.3d 102, 105, 443 N.E.2d 161 (1982). It for this reason that Civ.R. 53(D)(4)(b) gives the trial court the authority to “adopt or reject a magistrate‘s decision in whole or in part, with or without modification.” And we emphasize that a magistrate‘s decision is not effective “unless adopted by the court.” Civ.R. 53(D)(4)(a). To assert that the magistrate erred is to create a straw man: it makes no difference if the magistrate used the wrong standard of review; what is important is that the trial court used the correct standard of review.
{¶ 25} The Eleventh District determined that its resolution of the issue regarding Streetsboro Codified Ordinance 1153.03(c)(4) was dispositive of the appeal, obviating the need for it to consider any of the various other issues raised by the commission and the two city officials in their appeal from the decision of the court of common pleas. Because those issues that were not addressed should be resolved by the Eleventh District in the first instance, we remand this cause to the court of appeals for further consideration consistent with this opinion.
Judgment reversed and cause remanded.
KENNEDY and DONNELLY, JJ., concur.
FISCHER, J., concurs in judgment only.
DEWINE, J., dissents, with an opinion joined by O‘CONNOR, C.J., and ZIMMERMAN, J.
WILLIAM ZIMMERMAN, J., of the Third District Court of Appeals, sitting for FRENCH, J.
DEWINE, J., dissenting.
{¶ 26} Let‘s review what happened here. The City of Streetsboro passed an ordinance allowing surface mines if the mine operator can show by clear and convincing evidence that the mine will satisfy certain standards. Among those standards is that the mine “[w]ill not be detrimental to property in the immediate vicinity or to the community as a whole.” The Streetsboro Planning and Zoning Commission reviewed an application for a conditional-use permit and found that the company failed to meet this burden. But the court of common pleas overturned the commission‘s decision on the grounds that the commission had not provided sufficient evidence justifying its rejection of the application. And the court of appeals reversed, rightly noting that this put the burden on the wrong party, and reinstated the commission‘s decision.
{¶ 27} Nevertheless, a majority of this court today reverses the court of appeals. In doing so, the lead opinion neither analyzes whether Shelly Materials provided
The court of common pleas did not apply the right standard in reviewing the commission‘s decision
{¶ 28} The determinative question in this case is what standard the court of common pleas should have applied in reviewing the commission‘s decision. On review of an administrative agency‘s decision under
{¶ 29} A complicating feature here is that the zoning ordinance imposes a “clear and convincing” evidentiary standard. That is, under the ordinance, an applicant must provide clear and convincing evidence that the proposed use will satisfy each of six requirements. Streetsboro Codified Ordinance 1153.03. The commission is legally bound to apply the terms of the zoning ordinance, including any evidentiary standard contained therein. Hence, if a reviewing court is to assess the commission‘s decision, as required by
{¶ 30} Here, nothing in the court of common pleas’ decision assesses whether Shelly Materials had provided clear and convincing evidence that the proposed use would not “be detrimental to property in the immediate vicinity or to the community as a whole” under Streetsboro Codified Ordinance 1153.03(c)(4). The magistrate‘s conclusions—adopted by the court of common pleas—first stated that the commission‘s findings were supported only by “unsubstantiated speculation about detrimental impact on property values, not by substantial probative evidence, and not by expert testimony.” The magistrate reached this conclusion by entirely discounting the opinion of Streetsboro Planning and Zoning Director John Cieszkowski. Thus the magistrate concluded that the commission‘s positive evidence (Cieszkowski‘s opinion) was “outweighed by the evidence from Mr. Bidwell [Shelly Materials’ expert appraiser] as a matter of law.” In essence, the magistrate reasoned that Shelly Materials provided some evidence and the commission provided no credible competing evidence and hence, Shelly Materials wins. That analysis might work if the burden was a preponderance of the evidence. But, as I‘ve explained, if the evidentiary burden set forth in the zoning ordinance is not to be rendered a nullity, the court of common pleas should have asked whether Shelly Materials provided clear and convincing evidence.
The evidence presented to the commission
{¶ 32} The lead opinion claims that the court of appeals erred by second-guessing the court of common pleas’ decision on questions regarding the weight of the evidence. But that mischaracterizes both what the court of appeals did and what the record here shows. To see why, let‘s review the record.
{¶ 33} Shelly Materials’ evidence regarding detrimental effects on properties in the immediate vicinity came from its appraiser, Paul Bidwell. Bidwell provided an analysis based on the sales of 12 comparator properties that were chosen based on proximity to surface mines. He initially opined that there would be “no adverse effect” on property values in the immediate vicinity. But he almost immediately qualified this conclusion. First, he conceded that many of the comparator properties were much farther away from a mining site than the properties at issue here would be and that some of the comparators had natural buffers insulating them from the mine site. In other words, he admitted that many of the “comparables” weren‘t particularly useful in assessing the effect of a mine on properties adjacent to the site. And he later clarified that his evidence did not show that there would be no adverse effect. Rather, it only failed to show that there would be an adverse effect. As Bidwell put it, “based on the information I have, I can‘t conclude one way or another” about the effect of the mine on the value of the closest homes, “but I can say that there is not evidence to show a specific adverse effect based on what I studied.” And he later further clarified that “even though the immediate properties in the area potentially could have or see some possible effect, the general area on which I‘m concentrating for this conditional use permit * * * is not conclusive for an adverse effect.”
{¶ 34} Note what‘s happened here. Bidwell first opined that there would be no adverse effect on nearby properties. This is the one line picked up by the magistrate. But when one reads on, it is clear that Bidwell thought only that his evidence failed to show an adverse effect. That‘s hardly a relevant result if one is tasked with assessing whether there is clear and convincing evidence that there will be no adverse effect. As the saying goes, the absence of evidence is not evidence of absence.
The lead opinion makes the same mistake as the court of common pleas
{¶ 35} The lead opinion claims that the court of appeals had “no authority to second-guess
{¶ 36} Second, when the evidentiary burden is clear and convincing evidence, a reviewing court must “examine the record to determine whether the trier of facts had sufficient evidence before it to satisfy the requisite degree of proof.” State v. Schiebel, 55 Ohio St.3d 71, 74, 564 N.E.2d 54 (1990); Ford v. Osborne, 45 Ohio St. 1, 3, 12 N.E. 526 (1887). And it must assess whether the requisite quantum of evidence was produced, which, we have said, is “‘in essence’ a legal question.” Kisil v. Sandusky, 12 Ohio St.3d 30, 35, 465 N.E.2d 848 (1984), quoting Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108, 111, 407 N.E.2d 1265 (1980). The lead opinion, like the court of common pleas, fails to assess whether Shelly Materials met the burden of providing clear and convincing evidence.
{¶ 37} The lead opinion goes to some length to explain that experts are “not required to give precise opinions” and to highlight the difficulty of finding good comparable properties that can be used to accurately assess the effect of a mine on property values. Lead opinion at ¶ 19. Fine, but the ordinance requires clear and convincing evidence, and we cannot ignore that requirement. The fact that it may be difficult to locate good comparable properties cannot excuse a party from meeting its evidentiary burden.
{¶ 38} The magistrate patently applied the wrong standard. The common pleas judge adopted the magistrate‘s reasoning without any independent analysis about the disputed provisions in the ordinance. The lead opinion seems to believe that the common pleas court‘s conclusory recitation of the zoning ordinance‘s requirements can magically turn the magistrate‘s obvious application of the wrong legal standard into something that passes legal muster. I disagree.
{¶ 39} The court of appeals would have reinstated the commission‘s decision. Because I believe that it is procedurally best to allow the court of common pleas to apply the correct standard in the first instance, I would remand this case to the trial court for it to apply the correct standard and determine whether Shelly Materials met its burden of providing clear and convincing evidence that the proposed use would satisfy all six standards under the zoning ordinance.2 Because a majority of the court sees things differently, I respectfully dissent.
O‘CONNOR, C.J., and ZIMMERMAN, J., concur in the foregoing opinion.
Eastman & Smith, Ltd., Reginald S. Jackson Jr., Brian P. Barger, and Barry W. Fissel, for appellant.
Sutter O‘Connell Co., Robert E. Cahill, and Matthew C. O‘Connell, for appellees.
Brady, Coyle & Schmidt, Ltd., and Margaret G. Beck, urging reversal for amici curiae Ohio Chamber of Commerce; NAIOP of Ohio, Inc.; National Federation of Independent Business; Ohio Chemistry Technology Council; Ohio Aggregates and Industrial Minerals Association; National Stone, Sand and Gravel Association; Flexible Pavements of Ohio; Ohio Ready Mixed Concrete Association; Ohio Forestry Association; Ohio Home Builders Association; and Ohio Contractors Association.