ST. LOUIS — The U.S. Court of Appeals for the Eighth Circuit has upheld a judgment in favor of Northland Management & Construction in its dispute with Parkville over a final certificate of occupancy for a developed residential lot, while remanding the case for a recalculation of damages.
In an opinion filed Aug. 3, the three-judge panel affirmed the lower court’s judgment for Northland on Missouri state-law inverse condemnation and equal protection claims.
The appellate court concluded that Parkville improperly applied its grading-permit ordinance to Lot 9 in the Cider Mill Ridge Sixth Plat subdivision and treated Northland differently from a similarly situated property owner without a rational basis.
The court reversed the damages awards, however, finding that the method used by the district court could compensate Northland twice after the city issued the final certificate of occupancy it had initially withheld.
The appellate court remanded the case for damages to be recalculated to reflect the period during which Northland’s use or occupancy of the property was diminished.
Northland owned and developed Lot 9 along with three other lots on the same street in the Parkville subdivision.
When it bought Lot 9, a swale carrying stormwater to a detention basin lay entirely on the lot, although the city-approved Sixth Plat instead contemplated grading the lot at a continuous slope to its southern boundary with Lot 3.
Construction on the Lot 9 home began in fall 2020.
The lot’s fill dirt and steep back-yard slope caused difficulties, leading Northland to try a retaining wall before grading the property to its southern boundary and installing piers beneath the rear of the house.
In completing the grading, Northland filled the existing swale.
The city later told Northland it could not grade into or fill the swale because of erosion and water-flow concerns.
At a December 2021 meeting, the city presented three options.
Northland selected an option involving a culvert and accompanying swale, but installed the culvert at an elevation that kept it from reaching full capacity in heavy rain.
It also placed the new swale downhill from the culvert, rather than above it as directed.
That placement caused stormwater runoff to be shared between Lot 9 and neighboring Lot 3 instead of remaining entirely on Lot 9. The city began receiving complaints as water was diverted to Lot 3.
In August 2022, Parkville asked Northland to obtain a grading permit under Section 520 of the municipal code.
The ordinance generally requires a permit before a person alters the surface of the ground, but provides an exception for grading that is part of an approved subdivision development with approved street and utility plans.
Northland declined, maintaining that its work fell within the exception.
The city cited Section 520 as a deficiency in a November 2022 inspection and again when it issued a temporary certificate of occupancy the following month.
It ultimately declined to issue the final certificate, prompting Northland’s lawsuit.
After a bench trial, the district court ruled for Northland on its equal protection and Missouri inverse condemnation claims and ordered the city to issue the final certificate. Parkville appealed those rulings.
The Eighth Circuit found that the district court did not clearly err in determining Northland’s grading was consistent with the city-approved Sixth Plat and accepted stormwater practices.
The city’s public works director testified that the subdivision’s stormwater drainage study contemplated grading Lot 9 to the property line, and that sharing runoff between two adjoining properties was a generally accepted practice.
The appellate court also upheld the finding that Parkville treated Northland differently from another owner on the same street, Stephen Melton.
According to the opinion, the city did not require Melton to obtain a Section 520 permit after he altered a swale in his backyard, while it expressly cited Northland’s alleged noncompliance with the same section in refusing a final certificate.
The court said the record did not show a rational relationship between the city’s actions and a legitimate governmental purpose.
It affirmed the judgment for Northland but concluded that damages must account for the city’s subsequent issuance of the certificate of occupancy.
Under Missouri law, the court said, damages for a temporary injury must reflect the period in which the property’s use or occupancy was diminished.
U.S. Court of Appeals for the Eighth Circuit case number: 25-2239
