IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2023-CA-00777-COA
CITY OF BILOXI, MISSISSIPPI APPELLANT
v.
MATTHEW J. McDONALD AND JENNIFER APPELLEES McDONALD
DATE OF JUDGMENT: 06/06/2023 TRIAL JUDGE: HON. CHRISTOPHER LOUIS SCHMIDT COURT FROM WHICH APPEALED: HARRISON COUNTY CIRCUIT COURT, SECOND JUDICIAL DISTRICT ATTORNEY FOR APPELLANT: DAVID A. WHEELER ATTORNEY FOR APPELLEES: WAYNE L. HENGEN NATURE OF THE CASE: CIVIL - REAL PROPERTY DISPOSITION: AFFIRMED - 10/08/2024 MOTION FOR REHEARING FILED:
EN BANC.
BARNES, C.J., FOR THE COURT:
¶1. Matthew and Jennifer McDonald filed an application with the City of Biloxi (City),
seeking a conditional-use permit for the short-term rental of their single-family residence
(subject property). The City’s planning commission voted to recommend approval, but the
Biloxi City Council (Council) denied the conditional-use permit.
¶2. The McDonalds appealed the Council’s denial of the permit with the Harrison County
Circuit Court. The circuit court reversed, finding that the Council’s decision was not
supported by substantial evidence and was arbitrary and capricious. The City appeals the
court’s ruling. Finding no error, we affirm the circuit court’s judgment.
FACTS AND PROCEDURAL HISTORY ¶3. The McDonalds, residents of Michigan, purchased the subject property located at 119
St. George Avenue in Biloxi, Mississippi, on July 29, 2021.1 They filed an application with
the City for a conditional-use permit, requesting approval to utilize the subject property as
a short-term rental. On December 2, 2021, the City’s planning commission held a public
hearing and recommended approval of the McDonalds’ request, but the Council subsequently
voted to deny the application on January 4, 2022.
¶4. The McDonalds reapplied for the conditional-use permit on April 1, 2022, after
making substantial alterations to the subject property costing approximately $70,000 (i.e.,
installing a new driveway and a privacy fence along the west and north property lines) in an
effort to address their neighbors’ concerns. At a public hearing on May 5, 2022, the planning
commission again reviewed the McDonalds’ application, taking into consideration the
following nine conditional-use standards:
a. The Conditional Use complies with all applicable zoning district standards;
b. The Conditional Use complies with all Use-Specific Standards;
c. The Conditional Use is compatible with the character of surrounding lands and the uses permitted in the zoning district(s) of surrounding lands;
d. The Conditional Use avoids significant adverse odor, noise, glare, and vibration impacts on surrounding lands regarding refuse collection, service delivery, parking and loading, signs, lighting, and other site elements;
e. The Conditional Use is configured and designed to screen, buffer, or otherwise minimize adverse visual impacts on adjacent lands;
1 The house was built in 2017.
2 f. The Conditional Use avoids significant deterioration of water and air resources, wildlife habitat, scenic resources, and other natural resources;
g. The Conditional Use maintains safe and convenient ingress and egress and traffic flow onto and through the site by vehicles and pedestrians, and safe road conditions around the site;
h. The Conditional Use allows for the protection of property values and the ability of neighboring lands to develop uses permitted in the zoning district; and
i. The Conditional Use complies with all other relevant city, state and federal laws and regulations.
The McDonalds discussed the changes they had recently made to the subject property in an
effort to appease “neighbor’s objections,” and the McDonalds submitted two letters from
local realtors in support of the application. Several neighboring landowners stated their
concern that permitting the subject property to be used as a short-term rental would adversely
affect the residential neighborhood. The planning commission voted (8-3) to recommend
approval of the permit, concluding:
[T]he proposed Conditional Use had been found to be in compliance with the Land Development Ordinance, and finding also that this Short-Term Rental use promotes the public interest at this location; that said use has been designed, located and proposed to be operated so that the public health, safety and welfare will be protected; that said use will not cause substantial injury to other properties in the neighborhood in which located; and that the use proposed conforms to all zoning district regulations of the an RM-30 High- Density Multi-Family Residential zoning district[.]
A public hearing before the Council was then held on May 17, 2022.
¶5. Councilman George Lawrence immediately moved to deny the McDonalds’
application, arguing that the subject property was “sitting inside of a neighborhood” and that
3 the nine conditional-use standards had not been met. Matthew McDonald told the Council
that when he purchased the subject property, he did his “due diligence” and was assured that
the property’s zoning classification allowed short-term rentals. He outlined the $70,000 in
alterations made to the subject property (i.e., moving the driveway, installing a privacy fence,
and providing parking for eight cars). Matthew also noted that an adjacent property directly
on Highway 90 across from the beach had already been approved for short-term rentals. That
property’s owner, Barney Foster, would be the McDonalds’ property manager if their
conditional-use application was approved. The City’s police chief told the Council that he
was unaware of any complaints that had been received concerning Foster’s short-term rental
property.
¶6. Councilperson Dixie Newman noted that a hotel had formerly been at that location.
She explained that the land previously had been one parcel extending from Beach Boulevard
(Highway 90) to Avalon Street and had since been subdivided into the two properties.2 The
City’s planning director, Jerry Creel, further clarified that the subject property’s zoning
classification (RM-30) allows for short-term rentals and apartment buildings (up to four
stories) and that there was already an apartment complex across the street. Councilman
Robert Deming said that he did not foresee any impact on the “residential neighbors . . . in
any way, shape or form,” observing that the subject property is “next to other multifamily
developments” and “just north of a short-term rental that’s on the beach.”
¶7. Sid Trahan was the only neighboring landowner who attended the hearing to oppose
2 The McDonalds’ house is on the north portion, and the Foster house is on the south portion of the parcel.
4 the application. Trahan questioned the legality of the alterations the McDonalds had made
to the property, noting that the house had only one door (facing Highway 90) and that there
was no gate for the fence. Creel, however, reassured the Council that there had been nothing
“illegal or unethical done on this” and that the subject property complied with the City’s fire
codes and variances. The Council denied the application by a 4-3 vote, stating in its
resolution that “the request does not meet the requirements of the Conditional Use for
reasons discussed during the meeting.”
¶8. The McDonalds appealed the Council’s decision to the circuit court, and a hearing
was held on February 16, 2023. The City’s attorney argued that six “surrounding landowners
object[ed] to the short-term rental use being allowed” (at the planning commission hearing),
claiming that “it impacted the value of their properties and their enjoyment of their
neighborhood.” Counsel for the McDonalds explained to the court that the area where the
subject property was located was zoned for short-term rentals and that the adjacent property
was “already a short-term rental.”
¶9. The circuit court reversed the Council’s decision, holding “that the McDonalds proved
by a preponderance of the evidence that they met the elements/factors essential to obtaining
the conditional use permit.” Furthermore, noting the Council’s failure to address the
individual conditional-use standards at the hearing, the court determined that the City had not
supported its decision to deny the application with substantial evidence. The circuit court
rendered judgment in favor of the McDonalds and granted their application for a conditional-
use permit. The City appeals the decision.
5 STANDARD OF REVIEW
¶10. On appeal, our Court will reverse a zoning authority’s decision if “the decision was
arbitrary, capricious, discriminatory, illegal, or without substantial evidence.” Waring Invs.
Inc. v. City of Biloxi, 307 So. 3d 1257, 1259 (¶5) (Miss. Ct. App. 2020) (internal quotation
marks omitted) (citing White v. City of Starkville, 283 So. 3d 189, 192 (¶5) (Miss. Ct. App.
2019)). “Evidence is substantial when ‘reasonable minds might accept it as adequate to
support a conclusion.’” Id. (quoting Trappey v. Newman, 281 So. 3d 58, 61 (¶8) (Miss. Ct.
App. 2019)).
DISCUSSION
¶11. The City claims that the circuit court erred in reversing the Council’s decision to deny
the McDonalds’ conditional-use permit application. “Zoning issues that concern whether to
grant or deny a request for a conditional use, or special exception, are adjudicative[.]”
Beasley v. Neelly, 911 So. 2d 603, 607 (¶8) (Miss. Ct. App. 2005). The circuit court sits as
an appellate court when reviewing a city or county board’s zoning decision concerning
special use exceptions; thus, the review is limited. Short v. Williams, 303 So. 3d 87, 96 (¶28)
(Miss. Ct. App. 2020) (citing Walters v. City of Greenville, 751 So. 2d 1206, 1208-09 (¶9)
(Miss. Ct. App. 1999)). “A reviewing court’s obligation on appeal . . . is to determine
whether the applicants proved by a preponderance of the evidence that they meet the
conditions for a special exception.” Id. (quoting Drews v. City of Hattiesburg, 905 So. 2d
719, 721 (¶4) (Miss. Ct. App. 2004)). If the municipal authority’s decision “can be viewed
as ‘fairly debatable,’ it will not be disturbed on appeal.” Beasley, 911 So. 2d at 608 (¶12).
6 ¶12. The City contends that the McDonalds failed to demonstrate by a preponderance of
the evidence “that the conditional use sought by them was compatible with the neighborhood
or that such use allows for the protection of property values and the ability of neighboring
lands to develop uses permitted in the zoning district.” The McDonalds respond that “[t]hey
offered [by] a preponderance of the evidence that the proposed use of the property would
meet all of the requisite standards” and that the Council’s denial of the application “was
unsupported by substantial evidence and was arbitrary and capricious.”
¶13. We find that the record demonstrates that the McDonalds supported their request for
the conditional use permit by a preponderance of the evidence. It is undisputed that the
proposed use (short-term rental) complies with the applicable zoning district (RM-30).
Director Creel also stated that the residence complied with all building ordinances and fire
codes. The adjacent property, which previously had been part of the same parcel as a hotel,
had already been approved for short-term rentals; across the street from the property is an
apartment complex. We therefore agree with the McDonalds’ assertion that “the subject
property is compatible with the character of the surrounding lands and uses permitted in the
zoning district of the surrounding lands.”
¶14. The dissent, however, would find that the McDonalds’ proposed use failed to meet
two of the applicable conditional-use standards: “safe and convenient ingress and egress and
traffic flow onto and through the site” and “protection of property values.” We find that the
record does not support such a finding. The McDonalds expended $70,000 in alterations to
the property to minimize any potential adverse impact on the neighbors. They shortened the
7 height of the privacy fence to allow Mr. Trahan “more view from his back porch” as he and
Councilman Lawrence had requested. Moreover, they moved the driveway from Avalon
Street (which abutted the neighborhood) to St. George Street (which connected to Highway
90 and abutted the apartment complex across the street). Based on the evidence presented,
we agree with the planning commission that the proposed use would “not cause substantial
injury to other properties in the neighborhood in which located.” Accordingly, we find the
record supports the court’s ruling that the McDonalds showed by a preponderance of the
evidence that the subject property met the applicable standards.
¶15. The Council argues that even “if the nine conditions specified in the LDO for
conditional use are met,” the granting of a conditional use is not a right. See Hall v. City of
Ridgeland, 37 So. 3d 25, 37 (¶35) (Miss. 2010) (noting that “a conditional use or special
exception is effectively a license, granted by the [municipality], in its discretion, to allow a
specified use of land within a given zoning district, so long as it is of benefit to the city and
does not adversely affect adjacent landowners”). Such discretion, however, does not allow
a municipal authority to deny a conditional-use permit arbitrarily and capriciously or without
substantial evidence to support the decision. The court observed in its judgment that the
Council did not make any findings regarding the nine conditional-use standards. The only
mention of the standards was when Councilman Lawrence concluded prior to any discussion
on the matter:
And we said you have to meet the nine conditional uses according to our laws of the ordinances of the City of Biloxi. It does not, so I’m moving to deny C, because it does not meet the ordinance that we passed ourselves, this Council, the nine -- it had to qualify, and it says in there all nine conditional uses has to
8 be met by our law. That’s what we put in. All nine uses have to be met to even consider it. Don’t have to be passed, to even consider it. It does not.
Thereafter, testimony by city employees and the McDonalds rebutted that conclusion. The
Mississippi Supreme Court has held that a municipal authority “should” make “specific
findings of fact” when “granting or denying conditional use permits.” Barnes v. Bd. of
Sup’rs of DeSoto Cnty., 553 So. 2d 508, 511 (Miss. 1989). In Barnes, however, the supreme
court determined that “after reviewing the evidence,” which consisted of a three-day hearing
with “all parties having full opportunity to develop and present their respective opinions,”
the authority’s “granting the conditional use permit . . . [was] tantamount to a finding of fact”
that those questions had been considered. Id. at 511-12. Thus, we acknowledge that “[t]he
absence of findings [by a municipal authority] does not necessarily warrant reversal.” Favre
v. Hancock Cnty. Bd. of Sup’rs, 52 So. 3d 463, 465 (¶5) (Miss. Ct. App. 2011).
¶16. Regardless, we find no error in the court’s ruling that the Council’s decision to deny
the permit was arbitrary and capricious and not supported by substantial evidence. The
supreme court has “defined an act as ‘arbitrary’ when ‘it is not done according to reason or
judgment, but depending on the will alone.’” Hall, 37 So. 3d at 36 (¶33) (quoting Burks v.
Amite Cnty. Sch. Dist., 708 So. 2d 1366, 1370 (Miss. 1998)). “‘Capricious’ has been defined
as ‘any act done without reason in a whimsical manner, implying either a lack of
understanding of or a disregard for the surrounding facts and settled controlling principles.’”
Id. (quoting Burks, 708 So. 2d at 1370).
¶17. As the circuit court observed, “the only comments that were made against the
conditional-use approval were the lay opinion of a neighbor, Mr. Trahan, and the opinions
9 of Councilman Lawrence that lacked any foundation in the record.” While other landowners
had objected to the application’s approval at the planning commission’s hearing, they did not
appear at the Council hearing, nor were their objections discussed. The dissent finds the
residents’ expressed concerns “significant” to the Council’s decision to deny the permit. Yet,
as discussed, the planning commission took those objections into consideration and
nevertheless determined that the proposed permitted use would “not cause substantial injury
to other properties in the neighborhood in which located.” Nor does the record contain any
substantial evidence showing there had been any adverse effect resulting from the already-
existing apartment complex or the short-term rental of Foster’s property. Lastly, as
Councilperson Newman noted at the hearing, the subject property is on a parcel of land that
formerly contained a commercial business, a hotel.
¶18. Considering that the adjacent property on that same parcel of land was approved for
short-term rental and that the McDonalds spent $70,000 in improvements on the property to
address their neighbors’ expressed concerns, we find the Council’s denial of the conditional-
use permit, without any substantial evidence to support the decision, is the epitome of
arbitrary and capricious. Accordingly, we affirm the circuit court’s order rendering judgment
in favor of the McDonalds and granting their application.
¶19. AFFIRMED.
WESTBROOKS, McDONALD, McCARTY, SMITH AND EMFINGER, JJ., CONCUR. CARLTON, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION, JOINED BY WILSON, P.J. LAWRENCE, J., NOT PARTICIPATING.
CARLTON, P.J., DISSENTING:
10 ¶20. In accordance with our limited standard of review in this matter, I find that the
Council’s denial of the McDonalds’ application for a conditional-use permit for short-term
rental of their single-family residence was supported by substantial evidence and was not
arbitrary and capricious. I would therefore reverse the circuit court’s order and reinstate the
Council’s order denying the McDonalds the conditional-use permit requested. Accordingly,
I respectfully dissent.
¶21. We sit as an appellate court—as did the circuit court; thus, we are bound to “employ[]
a limited standard of review when considering the [Council’s] actions.” Hopkins v. City of
Mendenhall, 176 So. 3d 148, 152 (¶14) (Miss. Ct. App. 2015). A decision on an application
for a conditional use is adjudicative, so “a reviewing court subjects such decisions to the
same standard as is applied to administrative agency adjudicative decisions.” Hall v. City
of Ridgeland, 37 So. 3d 25, 36 (¶33) (Miss. 2010). Accordingly, the Council’s decision “is
not to be disturbed unless the [Council’s] order was unsupported by substantial evidence; was
arbitrary or capricious; was beyond the [Council’s] scope or powers; or violated the
constitutional or statutory rights of the aggrieved party.” Id.
¶22. “An act is arbitrary and capricious when it is done at pleasure, without reasoned
judgment[,] or with disregard for the surrounding facts and circumstances.” Nelson v. City
of Horn Lake ex. rel. Bd. of Aldermen, 968 So. 2d 938, 942 (¶10) (Miss. 2007). “Substantial
evidence is such relevant evidence as reasonable minds might accept as adequate to support
a conclusion or more than a mere scintilla of evidence.” Id. (internal quotation marks
omitted).
11 ¶23. In this case, the McDonalds were required to prove by a preponderance of the
evidence that their proposed use of the property met all nine conditional-use standards
necessary to obtain the use permit. See Check Into Cash of Miss. Inc. v. City of Jackson, 158
So. 3d 1252, 1258 (¶26) (Miss. Ct. App. 2015) (citing Barnes v. Bd. of Sup’rs, DeSoto Cnty.,
553 So. 2d 508, 511 (Miss. 1989)). The Council’s decision denying the conditional-use
permit “is tantamount to a finding of fact” by the Council that the McDonalds failed to prove
they met all nine conditional-use standards. See Barnes, 553 So. 2d at 511. As a reviewing
court, we must employ the “restricted scope of review” set forth above in determining
whether the Council’s decision may be disturbed. Short v. Williams, 303 So. 3d 87, 96 (¶28)
(Miss. Ct. App. 2020). With these standards in mind, I find nothing arbitrary or capricious
in the Council’s decision. Indeed, I find that there is substantial evidence supporting the
Council’s conclusion that the McDonalds failed to introduce sufficient evidence that all nine
standards were met.
¶24. Specifically, I find that evidence in the record reasonably and adequately supports the
conclusion that the McDonalds’ proposed use would not meet conditional-use standards (g)
and (h). Conditional-use standard (g) requires that “[t]he Conditional Use maintains safe and
convenient ingress and egress and traffic flow onto and through the site by vehicles and
pedestrians, and safe road conditions around the site.” Conditional-use standard (h) requires,
in relevant part, that the McDonalds prove that “[t]he Conditional Use allows for the
protection of property values.”
¶25. At the May 17, 2022 council meeting, Councilman Lawrence moved to deny the
12 conditional-use permit, observing that the subject property is “sitting inside of a
neighborhood.” Further, although the address for the dwelling was changed from Avalon
Street to St. George Avenue, Councilman Lawrence observed that the fact remains that the
subject property “is not connected to Highway 90.” I find this relevant because there is only
one home in the neighborhood approved for short-term rentals. That property is south of the
McDonalds’ property, and it is located directly on Highway 90 across from the beach.
¶26. Additionally, six residents from the neighborhood surrounding the subject property
voiced objections to the McDonalds’ conditional-use request at the May 5, 2022 planning
commission meeting. The entire record from that meeting was before the Council at the May
17, 2022 meeting. One of these neighbors also reiterated his objections at the May 17, 2022
meeting. These residents addressed their concerns that allowing use of the house for
short-term rental was not compatible with the character of the surrounding neighborhood and
would adversely affect their property values. They explained that short-term rental use was
not in keeping with the neighborhood because the surrounding properties are single-family
residences or long-term rental apartments except for the one home located directly on
Highway 90 described above. These residents also expressed concerns that if the McDonalds
were allowed to use their property for short-term rentals, it would have an adverse impact on
the value of their own property, an adverse effect on their peaceful enjoyment of their
property, and an adverse impact on the property values in the surrounding neighborhood. I
find no evidence in the record that allays these concerns.
¶27. I further find that the residents’ concerns are significant, bearing in mind that “a
13 conditional use . . . is effectively a license, granted by the . . . [Council], in its discretion, to
allow a specified use of land within a given zoning district, so long as it is of benefit to the
city and does not adversely affect adjacent landowners.” Hall, 37 So. 3d at 37 (¶35)
(emphasis added). The Council was within its discretion to deny the special use requested
here.
¶28. In short, “[i]t is not the role of the judiciary to reweigh the evidence, but rather to
verify if substantial evidence exists.” Childs v. Hancock Cnty. Bd. of Sup’rs, 1 So. 3d 855,
861 (¶19) (Miss. 2009). If the Council’s decision is “fairly debatable, we have no authority
to disturb [that decision on appeal].” Id. at 859 (¶12) (internal quotation marks omitted).
¶29. In this case, the Council reviewed the entire record before it, including the record from
the planning commission hearing, and gave the planning commission’s recommendation “full
consideration.” Nevertheless, the Council denied the McDonalds’ application “based upon
a determination that the request does not meet the requirements of the Conditional Use for
reasons discussed at the meeting.” For the reasons I have discussed above, I find that the
Council’s denial of the McDonalds’ application for a conditional-use permit was supported
by substantial evidence and was not arbitrary and capricious. I would reverse the circuit
court’s order and reinstate the Council’s order denying the McDonalds’ application for a
conditional-use permit for short-term rental of their single-family residence.
WILSON, P.J., JOINS THIS OPINION.