When property interests collide

Property ownership is perhaps one of the greatest of all aspirations of the typical American. The desire to own property is as strong today, as it was before the United States even became a nation. For some, to own property is the beginning, and the end, of all things. Indeed, land ownership is often a means by which one earns one’s living. Charles Dudley Warner once said of the subject:

“To own a bit of ground, to scratch it with a hoe, to plant seeds, and watch the renewal of life – this is the commonest delight of the race, the most satisfactory thing a man can do.” -My Summer in a Garden 1870.

While ownership of land brings both individual pride and a strong desire to utilize one’s own property in a manner which one deems fit and proper, uses of that land can, and often do, come into conflict with the manner in which adjoining land owners have chosen to utilize their properties. Such conflicts are,certainly not new to the State of Wyoming: consider, for example, the range war, which occurred in the early 1890’s, in and around Johnson County, Wyo.

In competition with the rights of an individual owner, are equally cognizable rights of neighboring property owners, and the rights of a community, to control how land is developed and how it is to be utilized. Hence, the development of the dreaded subject of “zoning.”

Zoning regulations are the field of battle, where “rights” - and the “responsibilities” that accompany those rights - inevitably clash. Zoning regulations help to form the Social Compact, by which people come together - to live in harmony, within a community that respects the rights of all its members equally. The past several years have seen conflicting ideas of land use management generate both expensive, and time consuming, litigation in our community.

In early 2021 a local couple, Michael and Michele Stevens, hit upon an idea which they hoped would entice their extended family to visit Hot Springs County more frequently, and that perhaps, might lead to their family’s eventual relocation here. In order to pursue their idea to attract their family members, the Stevens’ determined to construct several tipi structures on sixty acres of land located at the end of Coyote Run Road, just outside Thermopolis, in rural Hot Springs County.

Mr. Stevens recently testified in Hot Springs County District Court that he specifically reviewed the land use regulations of the County to determine whether it was necessary to obtain any type of permit to construct the tipis. And, finding that no construction permit was required, the Stevens’ proceeded to construct a number of wooden platforms, upon which the tipis were, subsequently, erected.

Mr. Stevens testified that family members seemed to like the idea and he looked forward to time spent with visiting family, who would stay in the tipis for the duration of their visit. He further testified that he was surprised to find that several people who were not family members also expressed an interest in staying overnight – to experience sleeping in a Native American style canvas structure. And, from there, the family’s idea morphed into a business opportunity - which Mr. Stevens hoped would help him to provide for the extended family he was looking forward to have living locally.

Mr. Stevens testified that he and his wife set up a Wyoming Limited Liability Company (LLC) which would lease land from them, upon which to operate the business. They called the business “The Tipi Retreat, L.L.C.” Beginning around May of 2021, The Tipi Retreat began to rent various tipis to overnight guests - who had made reservations through one of three on-line booking services, by which the enterprise was marketed to the general public.

The Stevens property is accessed by a private road, which had been established in 1999, and which extends westerly from the point where the county road, known as Coyote Run Road, terminates. The private road is also known as Coyote Run Road, and provides access to several properties neighboring the land owned by the Stevens’.

According to Mr. Stevens, at some point he was contacted by then County Planner, Bo Bowman, and advised that although the Stevens’ did not need a permit to construct the tipis for their personal use, they would be required to obtain a permit from the County to operate a business on their property - as their land was classified as agricultural/residential property. Both Mr. Stevens, and Mr. Bowman testified that the idea of renting the tipis for short-term rentals was a novel idea, which did not fit specifically into any category of permit, or land use change, under the 2020 Land Use Plan, which was in effect in Hot Springs County at that time.

Mr. Stevens testified that he was informed by Mr. Bowman that Hot Springs County has no “Zoning” regulations. At trial, Mr. Bowman attempted to draw a distinction between “Zoning” and “zoning” – the lower case word being what Hot Springs County allegedly uses to regulate land use in the county. And indeed, it appears that nowhere in the County’s land use regulations is the word “zoning” (either uppercase, or lowercase) to be found.

In light of Mr. Bowman’s statement, Mr. Stevens claims that he understood that the County had no “zoning” regulations, and therefore, that the County could not prevent him from conducting the business on the property. He further states, that despite his understanding that there were no zoning regulations, he undertook the land use change process, “to get along.”

Thus began a long list of issues between the County and the Stevens’ which would, ultimately, lead to the filing of court cases in the Hot Springs County District Court. Although the Court has entered legal rulings in the matter over the past two years, the matter had not been before the Court for testimony of witnesses. This past week, several witnesses appeared, and presented testimony, before the Court over a period of two days.

Firstly, to resolve the “Zoning” issue - in ruling upon a Motion for Partial Summary Judgment, filed by the County – on October 26, 2021, the District Court concluded that “Wyoming law requires counties to develop land use plans.” Moreover, a land use plan is merely “a guide a county may use in creating enforceable development regulations.” A land use plan, however, “is not enforceable, in and of itself.” Thus, “in order for a county to have the authority to deny or restrict development activity, the county must adopt regulations that describe under what circumstance land may be used.”

The Court then went on to rule that Hot Springs County has enforceable land use regulations, which are set forth in the Land Use Plan - whether or not the word “zoning” appears in that document. Thus, the Court held that the County had the authority to restrict the uses of the Stevens’ property, and to require them to seek a land use change in order to operate their tipi rental business upon the property. And with that, the first issue between the parties was clarified – the County has valid land use regulations in place, which the County can enforce.

There were other issues to be resolved, however. First among them: Whether the County applied its land use regulations appropriately, with regard to the Stevens’ property.

As to that issue, there were further misunderstandings by the two sides to the matter.

Although the Land Use Plan contains a definition of a “Short-term Rental” - and the business proposed by the Stevens’ appears to fit well within that definition - other than in the Definitions section, the term “Short-term Rental” does not, thereafter, appear again in the 2020 Land Use Plan. Whether that is merely by oversight or by intentional omission, on its face the Land Use Plan leaves unanswered the issue of whether a land use change is needed to operate a short-term rental business. Thus, the advent of issue number two in this saga.

Both Mr. Stevens and Mr. Bowman testified that Mr. Bowman initially suggested that the Stevens’ apply for a “permit” to operate a Bed & Breakfast on the subject property, as that process would not necessitate a change of use under the Land Use Plan. Mr. Stevens testified that he did not believe that his business was a Bed & Breakfast as defined in the Land Use Plan, however, he went along with Mr. Bowman’s proposal, again “to get along.”

Mr. Bowman testified that when he was reviewing the permit request with the Land Use Commission – who would ultimately review the matter, and make recommendations to the County Commissioners - members of the Land Use Commission objected to a Bed & Breakfast permit being issued - apparently agreeing with Mr. Stevens’ assessment that the tipi business did not fit that definition. Mr. Bowman further stated that he then went to the Stevens’ and advised them that they would need to apply for a land use change from “agricultural/residential” to “commercial.”

Mr. Stevens testified that he never agreed to pursue a change of land use, however the matter did proceed to a hearing before the Land Use Commission, who reviewed the application upon the same issues that the Board of County Commissioners would be required to review, and having found no issues with the proposed land use change, recommended to the County Commissioners that the land use change be approved – allowing the Stevens’ to operate their tipi business.

However, when the matter was set for hearing before the County Commissioners - in August of 2021 - the Board tabled the issue, stating that they had questions regarding the application and were awaiting further information before taking up the matter at a Hearing. Testimony presented at trial last week indicates that the “information” the County Commissioners were awaiting was in fact a legal opinion from a law firm out of Cheyenne, who had been retained by Martin Oravec – a neighbor of the Stevens’ whose property is located on the private road section of Coyote Run Road, which leads to the Stevens property. The legal opinion letter issued by Mr. Oravec’s attorneys, on November 2, 2021, raises a number of issues – particularly concerning the nature of the road accessing both his property, and that of the Stevens. Oddly, and in a move which would generate a great deal of animosity between the parties, the County later determined to retain Mr. Oravec’s attorneys to represent the County in the civil actions filed by Mr. and Mrs. Stevens.

On December 21, 2021, the application for land use change was taken up by the County Commissioners, and was ultimately denied by the Board as it was then comprised - without stating specific findings on the record as to why the Board had taken that action. At trial last week, uncontested testimony was presented by the Stevens that former Commissioner Jack Baird had commented to Mrs. Stevens at the December hearing, but before the matter was called on the Agenda, that the Commissioners “had already made up their minds to deny the application.” This event would leave the Stevens feeling that the decision had been made before the hearing ever began; that they were not being allowed the due process all citizens are guaranteed; that the Board had exceeded its legal authority and that the statement by Commissioner Baird led directly to the creation of additional animosity between the parties.

The Stevens appealed the Board’s action to the District Court, and on June 1, 2023, the Court remanded the case to the Board of County Commissioners, directing the Board to issue specific findings of fact supporting their decision, so that the Court could appropriately review their action, under the laws of the State of Wyoming.

In directing the case to be remanded to the Board of County Commissioners, the Court identified a specific issue, which the Board could consider with regard to the access road to the property. Additionally, the Court noted that issues related to the subject road, which were raised by the County in its briefs, and which were based upon provisions in the Land Use Plan that applied to “subdivisions,” were not applicable in this matter, as the proposed use of the property was clearly not a “subdivision” as defined in the Land Use Plan.

On remand, the County Commissioners did not again take up the matter, except to approve and to adopt a set of specific findings, which were generated by the attorneys representing the County. When those findings of fact were issued by the County, the Stevens’ again asked the District Court to review the matter. On May 2, 2024, the Court issued a ruling.

In its decision, the Court first notes that when a court sits in review of an informal action taken by a board of county commissioners, the Court will only set aside the county’s action upon a showing that the county’s action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Thus, in such cases, the appealing party – here the Stevens’ – have the burden to prove that the County has not acted in a lawful manner.

Although the County Commissioners had raised a number of bases upon which they had denied the Stevens’ application, the Court found that only three of the identified issues were adopted by a majority of the three County Commissioners. Thus, the Court confined its review to those three issues.

Of those issues, the Court found that two were based upon provisions in the Land Use Plan, that by their own terms, applied solely to “subdivisions.” An issue which the Court had attempted – apparently without success – to bring to the attention of the County in its ruling on remand. As to those two bases, the Court found that the County had acted in an arbitrary and capricious manner, and therefore, those matters could not justify denying the application for a land use change.

As to the final issue, however, the Court upheld the action of the County. That matter relates to a point of review of all land use matters before the County Commissioners, and is known as “Absolute Policy A14.” Absolute Policy A14 requires that an applicant show that “all access roads to Federal, State or County roads and all public lands shall be constructed in conformance with the standards found in Chapter Seven of [the] Land Use Plan.”

Inasmuch as there was nothing in the record before the Court which evidenced that there had been a showing by the Stevens that the private road, which accesses their property, met those standards, the Court determined that the County Commissioners had been justified in denying the requested land use change.

The Stevens claim, and the County does not appear to deny, that the Stevens were never asked by the County Planner, the Land Use Commission or the Board of County Commissioners to address the Policy A14 issue. Moreover, the Stevens allege that they were never allowed an opportunity to address the problem, in large part, because they were never informed the condition of the roadway was an issue until the County Commissioners had issued their findings of fact – many months after the Board had denied the request, and many months after the court case had been filed.

Further, the Stevens allege that the County did not allow them a hearing on the actual findings, so they were denied an opportunity to address the issue before the findings were adopted by the Board, and filed with the Court. The County, on the other hand, contends that, once the Stevens had filed suit against the County, they were required to be “hands off” with regard to all issues connected to the court case.

Which brings us to the reason the case was before the District Court last week for two days of witness testimony. Now that the denial of the land use change has been upheld by the Court, the County is seeking the imposition of a fine upon the Stevens for operating their business without legal authority to do so. By statute, the penalty can be a fine of up to $750.00 per day, for each day of violation. The County seeks the maximum fine for eleven months of operation of the business. And here is where the resentment of the parties comes into play, and where a questionable policy, has led to unconsidered results.

When they were first approached by the County Planner, both the Stevens and Mr. Bowman agree that the Stevens were advised by Mr. Bowman that they could continue to operate their business while the matter proceeded through the County’s land use procedures – even though the use was “non-conforming.” Based upon that advise, the Stevens operated their business for several months – discovering that the business was unique enough that a good deal of business was coming to them - and to the County, from the persons who were using the tipi units. According the County, that initial period of time is not the issue before the Court.

Once the County had denied the land use change – at the Board of County Commissioner’s Meeting of December 21, 2021 – the County contends that the Stevens’ were required to cease all operations of the business. Because the Stevens continued to market the business on the on-line registration applications, and actually rented tipi units after the date the Board had denied their application, the County seeks a maximum penalty of $750.00 per day for the eleven months that the business continued to operate. Additionally, the County seeks a penalty for each of the separate tipi units that were in operation - rather than a penalty for the operation of the business as a whole.

The Stevens argue that the statement of former Commissioner Baird, demonstrates clearly that the County was not acting within its lawful authority, and therefore, they were not required to follow the Board’s directive that they cease operation of their business. Furthermore, the Stevens claim that they did cease operations, once the Court had issued its ruling that upheld the County’s denial of their application. Moreover, they contend that they did not market the business for the entire eleven month period of time, and that the County has failed to meet its burden of proof, to show exactly when any fines would be applicable.

Complicating the matter, is the fact that – while the County is in court seeking the imposition of fines against the Stevens for failing to follow the rules – the County was shown in Court to have failed to follow the rules of the Court in timely disclosing exhibits - which the County sought to use to establish the time when a penalty should be imposed. An inconsistency, that did not appear to be lost on either the Court, or on those who were in attendance at the trial.

In light of the County’s theory of the manner in which a fine should be imposed, Commissioner Philip Scheel advised the

Court that the County was seeking a penalty of $362,500.00. Additionally, Commissioner Scheel stated that the County is seeking an injunctive order from the Court, which would prevent the Stevens from ever operating a “campground” on their property – the County having interpreted the tipi operation as that of a “campground.”

Testimony by current County Commissioner, Paul Galovich, that he does not agree with the actions taken by the County in the matter; that he agrees with the Stevens in the position they have taken with the Court; and that he has been systematically cut out of any discussions by the two remaining County Commissioners of any issues before the Court, has served to further reinforce for the Stevens that they feel they are not being treated equitably by the County.

Following the testimony, the Court directed that a transcript of the proceedings be prepared by the Court Reporter, and that within forty-five days of receipt of the transcript, the parties are to submit to the Court their proposed Findings of Fact, and Conclusions of Law.

Thereafter, within twenty days of filing of the Proposed Findings, the parties shall file any objections they may have to the other party’s proposals.

The Court will then render a decision on the issue of what, if any, fine will be imposed, and whether an injunction will be issued.