Summary of a Recent
Judicial Development in
Animal Feeding Operations

CAFO Owner's Equitable Estoppel Claim Denied Because
Ignorance of the Law Is Not Sufficient

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In Terra Nova Dairy, LLC v. Wabash County Board of Zoning Appeals, 890 N.E.2d 98 (Ind. Ct. App. 2008), the Court of Appeals of Indiana affirmed the decision of the Wabash County Board of Zoning Appeals (BZA) holding that: 1) BZA was not equitably estopped from requiring Terra Nova Dairy, as a part of the owner's application for an improvement location permit for the construction of a concentrated animal feeding operation (CAFO), to file an application for a certificate of occupancy; and 2) the dairy owner was not denied due process.

Background

While meeting with a representative of the Wabash County Area Planning Commission (WCAPC) to discuss obtaining a CAFO permit, in compliance with applicable zoning ordinances, a dairy representative was given an outdated copy of the zoning ordinance by WCAPC. Id. at 101. Shortly thereafter, the dairy attempted to file an application with WCAPC to obtain a CAFO permit. Id. The application was deemed incomplete because it lacked approval from the Wabash County Drainage Board and a permit from the Indiana Department of Environmental Management. Id. at 102. The dairy appealed to the BZA, stating that the only reason that the dairy's permit was denied was due to an unlawful moratorium on CAFO applications. Id. BZA held that the dairy's argument was moot because its application was filed prior to the moratorium and it denied the dairy's permit application because it was incomplete. Id. at 102-03.

Arguments

The dairy argued that BZA should be equitably estopped from imposing the requirement that an applicant must file an application for a certificate of occupancy, because BZA gave the dairy a copy of the zoning ordinance that was out of date. Id. at 105. Additionally, the dairy argued that the sole basis for BZA's denial of their permit application was due to the unlawful CAFO moratorium. Id. at 103.

BZA countered that the dairy's application was filed prior to the moratorium date making its moratorium argument moot. Id. The application was denied, according to BZA, because it was incomplete when filed and the application was never subsequently completed. Id.

Analysis and Holdings

In reviewing BZA's decision, the court stated that it may only provide relief if the agency's decision is, among others, either arbitrary, capricious, or an abuse of discretion, or otherwise not in accordance with the law, or unsupported by substantial evidence. Id. at 104. To be arbitrary and capricious, the administrative act must be willful and unreasonable, without consideration and in disregard of the facts and circumstances of the case, or without some basis that would lead a reasonable and honest person to the same conclusion. Id. Substantial evidence is evidence that is more than a scintilla but less than a preponderance, which a reasonable mind might accept as adequate to support a conclusion. Id. In the case at bar, the court found that BZA's decision was not arbitrary or capricious, and was supported by substantial evidence. Id.

On the issue of equitable estoppel, the party claiming equitable estoppel must show: "(1) lack of knowledge and the means of knowledge as to the facts in question, (2) reliance upon the conduct of the party estopped, and (3) action based thereon of such a character as to change his position prejudicially." Id. at 105. When each party has equal knowledge or equal access to knowledge, there is no estoppel. Id.

Although the dairy was furnished with a copy of the old ordinance, the court charged the dairy with the responsibility to know the ordinances that affect its property. Id. at 106. The dairy had access to the applicable zoning ordinances but simply failed to inform itself and comply with them. Id. Even if the dairy could have proved the requirements for equitable estoppel, the court stated that the doctrine would not be applied against government agencies in this case. Id. The dairy's charge that it was denied due process was also denied. Id.

The case was decided on July 17, 2008.