On Feb. 24, the city council of Tucson, Ariz., voted 6-1 against an infill project. Nothing new? Not until you learn how local developer Jonathon D. Tate responded to rejection. He threatened to sue not the city, which had approved his plans, but the individual city council members, because they were not following the dictates of the law in their positions as council members. As a result, upon getting an opinion from the city attorney that council members really might be personally liable, they reversed themselves and approved the project by 6 -1 on April 21.

In the beginning

Tate's 6.52 acres in the foothills of the Tucson Mountains are totally surrounded by existing homes, a classic infill project. He completed the engineering and permitting requirements for 14 architect-designed production homes in a mini-subdivision he named WestView Estates.

Tate played by the rules. He received his city approvals in November 2002 and Community Design Review Committee approval in January 2003. The project just needed an OK from the Tucson city council. But the council rejected the project, despite the other approvals, because they thought it was ugly. In response, Tate hired a lawyer to bring suit against the individual council members.

Believe it or not

Just like corporate executives, elected officials can be held personally liable if they act beyond their legal authority. An easy way to understand how council members might exceed their authority is to compare council actions to building inspections. Consider a home wired to an approved plan and prevailing codes, awaiting inspection approval. The role of the inspector is to ensure that the electrician did the job according to the rules of both the code and the approved plan. If the inspector refuses to approve the job simply because he or she doesn't like it, that is an action outside the inspector's legal authority.

Arizona law provides that the approval can't legally be "withheld unreasonably" if a plan meets the governing jurisdiction's development standards. City officials had determined that the subdivision plat was "in conformance with all applicable laws and ordinances and thus legally entitled to receive approval ... ."

Case history

In Tate's initial complaint his attorney, Lawrence Schubart, cited a number of similar cases: a 1988 case in Billings, Mont., in which Gerald Bateson was thwarted in his plans to build a condominium. Appealed all the way to the Ninth Circuit U.S. Court of Appeals, the opinion handed down read in part, "The council members ignored clearly established law and their attorney's advice. They are not shielded from personal liability." Also, "The meaning is clear: If a reasonable government official would understand that an action violates rights clearly established by the law, that action will give rise to individual liability... ."

There are other cases ruled on by the Third Circuit Court of Appeals in which builders and developers won with conclusions similar to the Bateson case. One of these cases was the 1998 case of Mission Springs Inc. vs. the city of Spokane, Wash., in which the Washington State Supreme Court found city officials to be individually liable for not approving a project. A 2003 Ninth Circuit Court case of Kaahumanu vs. the county of Maui, Hawaii, also held that county officials were individually liable for arbitrary decisions rejecting land use "that met all applicable regulations." So there is significant precedent for developers suing legislative officials as individuals and winning.

Attorney Schubart has negotiated out-of-court settlements and/or won cases for other local developers and builders. One case involved Wong Family LLC, which wanted to develop the 80 acres it owned in Oro Valley, Ariz. In this case, Wong followed local zoning ordinances to subdivide and sell its property, but the town of Oro Valley used years of delaying tactics to subvert both the process and the plans. Wong won the right to develop per its plans and a cash settlement because of the delays.

On May 12, Tate's WestView Estates subdivision plat finally was officially approved. Tate and Schubart are now negotiating a monetary settlement to recover Tate's legal costs and losses during the time his perfectly legal project was delayed.

So, could you do this? Maybe. Have other builders and developers done so and won? Yes. It was worth the two extra months of time Tate spent to win approval, otherwise he would not have been able to build his subdivision at all. Moreover, Schubart and Tate also expect to recover the money spent in pursuing the case. Neither is worried about gaining approval for future legal projects.

Learn more about markets featured in this article: Tucson, AZ.