Blue Grass Trust for Historic Preservation v. Lexington Fayette Urban County Government Planning Commission

• Court: Court of Appeals of Kentucky
• Decided: September 29, 2022
• Docket: 2020 CA 000726
• Status: Unknown

Opinion

RENDERED: SEPTEMBER 30, 2022; 10:00 A.M. TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals NO. 2020-CA-0726-MR

BLUEGRASS TRUST FOR HISTORIC PRESERVATION APPELLANT

APPEAL FROM FAYETTE CIRCUIT COURT v. HONORABLE THOMAS L. TRAVIS, JUDGE ACTION NO. 18-CI-03781

LEXINGTON FAYETTE URBAN COUNTY GOVERNMENT PLANNING COMMISSION; COMMONWEALTH OF KENTUCKY, EX REL. DANIEL CAMERON, ATTORNEY GENERAL; THE RESIDENCES AT SOUTH HILL, LLC; AND WILLIAM WILSON APPELLEES

OPINION AND ORDER DISMISSING APPEAL

** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; COMBS AND DIXON, JUDGES.

CLAYTON, CHIEF JUDGE: Bluegrass Trust for Historic Preservation

(“Bluegrass”) appeals from the Fayette Circuit Court’s order finding that the Lexington-Fayette Urban County Government (“LFUCG”) Planning Commission

(the “Planning Commission”) was not arbitrary or capricious in approving

certificates of appropriateness (“COA”) authorizing the demolition of the

Commonwealth Building located in Lexington, Kentucky.

For the following reasons, we hereby dismiss the appeal and cross-

appeal based on this Court’s lack of jurisdiction under Kentucky Revised Statute

(“KRS”) 100.3471.

FACTUAL AND PROCEDURAL BACKGROUND

Bluegrass contested a property owner’s proposal to demolish the

Commonwealth Building and redevelop the property. The LFUCG Board of

Architectural Review first approved the property owner’s proposal. Bluegrass and

others appealed that decision to the Planning Commission, which also approved

the proposal. Bluegrass then appealed the Planning Commission’s decision to the

Fayette Circuit Court, which also delivered a decision in favor of the property

owner.

Thereafter, Bluegrass filed a notice of appeal seeking review from this

Court. Under KRS 100.3471, the property owner asked the circuit court to order

Bluegrass to post an appeal bond. Bluegrass argued that the circuit court should

only require a de minimis bond, but the circuit court orally ordered a bond of

$50,000 at the end of the hearing on the matter. The circuit court signed a written

-2- order to that effect on July 30, 2020, and entered the order on August 5, 2020.

Appellant subsequently filed a motion for reconsideration under Kentucky Rule of

Civil Procedure (“CR”) 59 and 60, arguing that KRS 100.3471 was

unconstitutional. Appellant provided notice to the Attorney General on August 7,

2020.

The circuit court denied Bluegrass’s motion for reconsideration.

Thereafter, Bluegrass failed to pay the required bond within the 15-day deadline

set forth in KRS 100.3471, and the property owner moved to have this appeal

dismissed. That motion is still pending.

We will discuss further facts as they become relevant to this Opinion.

ANALYSIS

In planning and zoning matters, KRS 100.347 provides for appeals to

the circuit court from the final actions of the board of adjustment, the planning

commission, or the legislative body of any city, county, or consolidated local

government. However, the statute at issue here – KRS 100.3471 – seeks to limit

the subsequent appeals of such cases to the Court of Appeals.

To this end, the statute provides for the imposition of a bond on the

appellant upon motion by the appellee. KRS 100.3471(1). If a party appeals a

circuit court’s decision in a planning or zoning matter, the appellee has thirty days

to file a motion for such a bond. KRS 100.3471(2). The circuit court is thereafter

-3- required to hold a hearing to set the amount of the bond, the maximum amount of

which is based on the circuit court’s determination of whether the appeal is

presumptively frivolous or not. KRS 100.3471(3).

If the court finds that the appeal is presumptively frivolous, after

considering such factors as whether “the appeal is of a ministerial or discretionary

decision[,]” and whether or not there exists “a reasoned interpretation supporting

the appellant’s position[,]” it “shall consider all costs, economic loss, and damages

that the appellee may suffer or incur during the pendency of, or that will be caused

by, the appeal, including attorney fees and court costs, up to a maximum bond

amount of two hundred fifty thousand dollars ($250,000).” KRS 100.3471(3)(b)

and (c).

If the court finds that the appeal is not presumptively frivolous, it

“shall consider the costs that the appellee may incur during the pendency of the

appeal, including but not limited to attorney fees and court costs, plus interest

payable on land acquisition or development loans, up to a maximum bond amount

of one hundred thousand dollars ($100,000).” KRS 100.3471(3)(d).

Notably, the statute requires the circuit court to dismiss the appeal if

the appellant does not post the bond within fifteen days of the circuit court’s

determination of the bond amount. KRS 100.3471(3)(f).

-4- Bluegrass presents the following grounds for holding the statute to be

unconstitutional: (1) it violates the Kentucky Constitution’s separation of powers;

(2) it imposes an unconstitutional penalty on the right to appeal found in Section

115 of the Kentucky Constitution; (3) it violates the right to equal protection under

the United States Constitution and the Kentucky Constitution; and (4) it violates

the constitutional prohibition against special legislation.

Alternatively, Appellees and the Commonwealth argue that KRS

100.3471 is constitutional and a requirement that must be met before this Court has

jurisdiction to hear the underlying appeal and cross-appeal.

Regarding Bluegrass’s separation of powers argument, Kentucky

Constitution Section 116 vests exclusive jurisdiction in the Supreme Court to

prescribe “rules of practice and procedure for the Court of Justice.” However,

Section 111(2) of the Constitution states that the Court of Appeals “shall exercise

appellate jurisdiction as provided by law.” (Emphasis added.) As our Supreme

Court noted in Commonwealth v. Farmer, “[j]urisdiction is a threshold

consideration for any court at any level of the Kentucky court system.” 423

S.W.3d 690, 692 (Ky. 2014). As the Court further discussed, “[t]he ‘as provided

by law’ language . . . authorizes the legislature to prescribe the appellate

jurisdiction of the Court of Appeals.” Id. (citations omitted).

-5- In enacting KRS 100.3471, the General Assembly utilized its

authority to prescribe this Court’s appellate jurisdiction. By stating that an “appeal

shall be dismissed” if the appellant fails to post the necessary bond within the

appropriate time, KRS 100.3471 removes such an appeal from the Court of

Appeals’ jurisdiction. Stated another way, KRS 100.3471 provides that the Court

of Appeals’ jurisdiction only encompasses appeals in which the appellant timely

posts the required bond. Because Section 111 of the Constitution allows the

legislature to define the Court of Appeals’ jurisdiction, the General Assembly did

not violate the separation of powers in enacting KRS 100.3471. Rather, the

General Assembly employed the power given to it by the Constitution.

Nor do we believe that the statute levies a penalty on all prospective

appellants that functions to take away their right to appeal under Section 115 of the

Constitution. As the Kentucky Supreme Court explained, “[c]onstitutional

challenges to statutes generally fall within one of two categories: a facial

challenge or an as-applied challenge.” Commonwealth v. Bredhold, 599 S.W.3d

409, 415 (Ky. 2020). Bluegrass brought a facial challenge to the statute, which is

“the most difficult challenge to mount successfully, since the challenger must

establish that no set of circumstances exists under which the [statute] would be

valid.” Harris v. Commonwealth, 338 S.W.3d 222, 229 (Ky. 2011) (internal

quotation marks and citation omitted); see also Bredhold, 599 S.W.3d at 415-16.

-6- Here, Bluegrass cannot make such a showing, as there could be many

circumstances by which an appellant has the financial means to post the appeal

bond under KRS 100.3471.

Additionally, the statute is not unconstitutional as applied to

Bluegrass. “[I]n order to declare a statute unconstitutional as applied, a court must

find the law unconstitutional as applied to the challenger’s particular

circumstances.” Bredhold, 599 S.W.3d at 416 (citation omitted). Here, Bluegrass

has not shown that it is indigent or otherwise incapable of satisfying the bond

requirement. The record indicates that Bluegrass had recently been able to procure

a $25,000 bond. Additionally, its 2017 Form 990 disclosed “net assets or fund

balances” of approximately $5.6 million. Finally, nothing else in the record

indicated that Bluegrass could not secure a $50,000 bond. Thus, Bluegrass did not

demonstrate that the statute was unconstitutional as applied to its “particular

circumstances.” Id. While we note that KRS 100.3471 may be unconstitutional as

applied to an indigent appellant, that issue is not before this Court.

Moreover, the statute does not violate the equal protection clauses of

the United States or the Kentucky Constitution. “[T]he level of judicial scrutiny

applied to an equal protection challenge depends on the classification made in the

statute and the interest affected by it.” Zuckerman v. Bevin, 565 S.W.3d 580, 595

(Ky. 2018) (citation omitted). Statutes that affect economic policy are subject “to a

-7- less searching form of judicial scrutiny, i.e.[,] the ‘rational basis’ test.” Id. (citation

omitted). Indeed, “[a] statute complies with Kentucky equal protection

requirements if a ‘rational basis’ supports the classifications that it creates.” Id. at

596 (citations omitted).

KRS 100.3471 survives such scrutiny, as “there is [a] reasonably

conceiv[ed] state of facts that could provide a rational basis for the classification.”

Zuckerman, 566 S.W.3d at 596. The General Assembly stated the statute’s

purpose in Section 2 of House Bill 72 as follows: “to curb unnecessary appeals of

land[-]use cases, which appeals burden the courts, cause loss of jobs and loss of tax

revenue, and many times render time-sensitive projects such as multifamily

affordable housing projects undevelopable . . . [.]” Thus, a rational basis existed

for KRS 100.3471.

Finally, Bluegrass argues that KRS 100.3471 violates the prohibition

against special legislation found in Section 59 of the Kentucky Constitution.

However, in Calloway County Sheriff’s Department v. Woodall, 607 S.W.3d 557,

573 (Ky. 2020), the Supreme Court held that a statute only violates the prohibition

on special legislation if it “applies to a particular individual, object or locale.”

After applying such test, we hold that KRS 100.3471 does not violate Section 59

“for the simple reason that the statute does not apply to a particular individual,

object or locale.” Id.

-8- Moreover, even if Bluegrass had posted a bond with the circuit court

under KRS 100.3471, we would still affirm the circuit court because the Planning

Commission’s actions were not arbitrary. The Kentucky Supreme Court has stated

that “such determinations are not subject to review by the judiciary except for the

limited purpose of considering whether such determinations are arbitrary.” Hilltop

Basic Resources, Inc. v. County of Boone, 180 S.W.3d 464, 467 (Ky. 2005)

(citation omitted). Moreover, “[a]rbitrariness review is limited to the consideration

of three basic questions: (1) whether an action was taken in excess of granted

powers, (2) whether affected parties were afforded procedural due process, and (3)

whether determinations are supported by substantial evidentiary support.” Id.

(citation omitted). Indeed, “[i]f the zoning agencies observe due process

requirements, judicial review is confined to the record made before those

agencies.” City of Louisville v. McDonald, 470 S.W.2d 173, 179 (Ky. 1971).

In this case, Bluegrass primarily challenges the Planning

Commission’s decision based on the third element of this test. When determining

whether evidence is substantial, “[t]he test . . . is whether when taken alone or in

the light of all the evidence it has sufficient probative value to induce conviction in

the minds of reasonable men.” Kentucky State Racing Commission v. Fuller, 481

S.W.2d 298, 308 (Ky. 1972) (citation omitted). Here, the record reflects members

of the Planning Commission’s staff presented evidence that the property was not

-9- listed on the National Register of Historic Places as a contributing structure within

the area in which it was located. Moreover, experts opined that the mid-century

modern-style office did not contribute to the historic district in which it was

located, as that district was primarily composed of federal and Greek Revival-style

homes or other architectural styles from the early 19th and 20th centuries. The

foregoing evidence was sufficient for the circuit court to conclude that the

Planning Commission’s actions were not arbitrary. Thus, substantial evidence

supported the Planning Commission’s decision.

CONCLUSION

We hereby ORDER that this appeal and cross-appeal be DISMISSED

for lack of jurisdiction because Appellants failed to timely post the bond required

under the circuit court’s order and KRS 100.3471.

09-30-2022 ENTERED: _______________ CHIEF JUDGE, COURT OF APPEALS

ALL CONCUR.

-10- BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE LEXINGTON FAYETTE URBAN Jessica K. Winters COUNTY GOVERNMENT Lexington, Kentucky PLANNING COMMISSION:

Tracy W. Jones Lexington, Kentucky

BRIEF FOR APPELLEE THE RESIDENCES AT SOUTH HILL, LLC:

William M. Lear Nick Nicholson Lexington, Kentucky

BRIEF FOR APPELLEE COMMONWEALTH OF KENTUCKY, EX REL. DANIEL CAMERON, ATTORNEY GENERAL:

S. Chad Meredith Matthew F. Kuhn Brett R. Nolan Assistant Attorneys General Frankfort, Kentucky

-11-