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Date: 03-19-2021
Case Style:
David Hickman, Lori Ann Hickman and Hickman Metal Recycling, LLC v. City of Biloxi
Case Number: 2019-CC-01349-COA
Judge: Jack L. Wilson
Court: IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
Plaintiff's Attorney:
Defendant's Attorney:
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Description:
Jackson, MS - Property zoning attorney represented David and Lori Hickman with a preexisting use exception case.
The Hickman family has owned the property at 12360 Hickman Road in Biloxi for
many years. Beginning around 1968, David’s father operated a scrap metal recycling
business, which David later acquired. In 1999, the City annexed the area and zoned it
agricultural. However, the Hickmans were able to continue their business, which was by
then known as David Motor and Scrap Company (“David Motor”), under a preexistingnonconforming-use exception to Biloxi’s Land Development Ordinance (LDO).1 The
Hickmans operated their business on the property until 2012, when they sold the business to
SMM Gulf Coast LLC.
¶3. The sale to SMM included a transfer of business assets from the Hickmans’ recycling
companies to SMM, an employment agreement between SMM and David Hickman, a noncompete agreement barring the Hickmans from engaging in the recycling business in
Mississippi and three other states for a period of five years, and a lease of the subject
property to SMM.2 The lease agreement in the record is dated August 21, 2012, and provides
for a six-month lease term expiring in February 2013. In 2014, the Hickmans initiated an
1 The LDO permits nonconforming uses “that were lawfully established before [the
LDO] was adopted or amended.” LDO § 23-8(1)(A). However, “[i]f a nonconforming use
ceases to operate or has been discontinued for a period of one year or longer, it shall not be
reestablished and shall only be replaced with a conforming use.” LDO § 23-8(2)(F).
2 The asset purchase agreement, lease, and related documents in the record are not
signed by SMM, but the City does not dispute that they reflect the terms of the sale.
2arbitration proceeding against SMM, alleging that SMM had failed to make payments due
under the parties’ agreements. In July 2015, the arbitrator awarded damages to the Hickmans
and also limited the scope of their non-compete agreement.
¶4. In January 2016, the Hickmans started a new recycling business under the name
Hickman Metal Recycling. The new business’s website stated, “In 2012, [David Hickman]
had the opportunity to sell all [his] businesses to perhaps retire. But David just cannot stay
away from the scrap business. In 2016, he reopened the Biloxi location under the name
Hickman Metal Recycling.” In a December 2015 post on Facebook, Lori Hickman stated,
“David and I will be opening our scrap recycling facility called Hickman Metal Recycling
on January 5 of the new year.” And in a July 2017 article in the magazine American Metal
Market, Lori stated, “We are trying to get our name out there and let people know that we
have opened back up. Our regulars got used to going to other businesses, but they are
coming back.”
¶5. In June 2017, after their new business was up and running, the Hickmans applied to
the Mississippi Department of Environmental Quality (MDEQ) for a permit to install an
industrial metal shredder on the subject property. The Biloxi Community Development
Department (CDD) initially advised the MDEQ that the Hickmans’ use of the property for
recycling was lawful. However, in July 2017, the CDD notified the MDEQ that it had
“recently come to [the CDD’s] attention that [the Hickmans’ recycling business] ha[d]
allegedly not been in operation for a least a year.” In September 2017, the CDD issued a
notice of violation to the Hickmans, informing them that “the non-conforming use of [the
3subject property] was apparently discontinued for a period of longer than one year,” which
resulted in “the loss of non-conforming use status.” The notice directed the Hickmans to
cease the non-conforming use or request an enforcement conference.
¶6. The Hickmans requested and were granted a conference. In February 2018, CDD
Director Jerry Creel issued a Final Determination of Violation in which he found that based
on the evidence presented at the conference, he was “unable to confirm the continued
operation of the authorized nonconforming use . . . during the time” between the sale to
SMM in 2012 and the opening of Hickman Metal Recycling in 2016. Creel relied in part on
the Hickmans’ non-compete agreement with SMM and the Hickmans’ own public comments
in connection with the opening of Hickman Metal Recycling. Creel also considered the
Hickmans’ evidence that they had continued to obtain a privilege license from the City of
Biloxi for David Motor every year, even after the sale to SMM. But Creel concluded that the
licences “provided no proof that a business was actually conducted during the time period
in question.”
¶7. The Hickmans appealed the CDD’s decision to the City’s Board of Zoning
Adjustments, which held a public hearing. The Board considered the evidence that Creel
reviewed and additional evidence offered at the hearing. The Hickmans presented a copy of
the July 2015 award in their arbitration against SMM; letters from customers stating that the
Hickmans had been “storing” material for the customers; a bill ofsale for a “car crusher” that
David Hickman purchased in February 2012; a list of invoices showing customer payments
to the Hickmans in July 2012; and bank statements showing that “Hickman Enterprises” had
4an account with Regions Bank between March 2013 and July 2014. The CDD offered
records fromthe Mississippi Secretaryof State showing that David Motor had been dissolved
since 2013 and that Hickman Metal Recycling was first registered in December 2015.
¶8. During the public hearing, various citizens spoke for and against the Hickmans’
appeal. Some voiced general support for the Hickmans or raised noise or environmental
concerns. Some citizens specifically stated that the Hickmans’ business had ceased for more
than a year, while others denied that it had ever ceased operations. David Hickman stated
that the Hickmans had leased the property to SMM as part of the sale of their business and
then took possession of the property again sometime after “the deal [with SMM] fell apart.”
David stated that sometime later they began accepting scrap for storage and had “plans to
open back up,” but they did not reopen immediately, apparently because of the ongoing
litigation with SMM. He stated that after the arbitration ended in 2015, they “decided to
open back up” and then reopened in 2016.
¶9. After considering the evidence and arguments presented by the Hickmans and the
CDD, the Board voted 10–0 to affirm the CDD’s decision. The Hickmans appealed, and the
Harrison CountyCircuit Court affirmed the Board’s decision. The Hickmans then appealed
again. They argue that there is not substantial evidence to support the Board’s decision and
that the Board erred by relying “solely” on the Hickmans’ sale of their business in 2012.
DISCUSSION
¶10. Judicial review of a zoning order issued by a local board is “restricted” in scope.
Cleveland MHC LLC v. City of Richland, 163 So. 3d 284, 286 (¶5) (Miss. 2015) (quoting
5Red Roof Inns Inc. v. City of Ridgeland, 797 So. 2d 898, 900 (¶6) (Miss. 2001)). “[T]his
Court will affirm a board’s zoning decision unless it is clearly arbitrary, capricious,
discriminatory, illegal, or without a substantial evidentiary basis. If a board’s zoning
decision is fairly debatable, we will not reverse it.” Hatfield v. Bd. of Supervisors of Madison
Cnty., 235 So. 3d 18, 21 (¶10) (Miss. 2017) (citations, brackets, and quotation marks
omitted).
¶11. “[A]n arbitrary decision is one not done according to reason or judgment, but
depending on the will alone. A capricious decision is one implying either a lack of
understanding of or a disregard for the surrounding facts and controlling principles.” Id. at
223 (¶21) (citations and quotation marks omitted). “Substantial evidence” is “something less
than a preponderance of the evidence but more than a scintilla or glimmer.” Thomas v. Bd.
of Supervisors of Panola Cnty., 45 So. 3d 1173, 1181 (¶22) (Miss. 2010) (quoting Miss.
Dep’t of Envtl. Quality v. Weems, 653 So. 2d 266, 280-81 (Miss. 1995)). The role of a
reviewing court is not to “reweigh the evidence” but only “to verify [that] substantial
evidence exists.” Childs v. Hancock Cnty. Bd. of Supervisors, 1 So. 3d 855, 861 (¶19) (Miss.
2009).
¶12. In the present case, the Board determined, by a 10–0 vote, that the Hickmans’ right
to a preexisting nonconforming use exception had terminated because the “nonconforming
use cease[d] to operate or ha[d] been discontinued for a period of one year or longer.” LDO
§ 23-8(2)(F). On appeal, the Hickmans argue that the Board’s ruling was “arbitrary,
capricious, discriminatory, illegal, [and] without a substantial evidentiary basis.” More
6specifically, they assert that the Board focused “solely on the change of ownership, tenancy,
and or management of the subject property” and “ignored the substantial evidence
demonstrating the Hickmans’ legal nonconforming use had never ceased for more than one
year.”
¶13. The Hickmans are correct “that the right to continue a nonconforming use is not a
personal right but one that runs with the land.” Faircloth v. Lyles, 592 So. 2d 941, 945
(Miss. 1991). Therefore, “such right may not be terminated or destroyed by a change of
ownership of the property.” Id.; accord Cleveland MHC, 163 So. 3d at 288 n.3; Heroman
v. McDonald, 885 So. 2d 67, 71 (¶6) (Miss. 2004). Indeed, the Biloxi LDO specifically
recognizes this legal principle. See LDO § 23-8-1(F) (“The status of a nonconformity is not
affected by changes of tenancy, ownership, or management.”). However, contrary to the
Hickmans’ allegations, the Board did not base its decision solely on the Hickmans’ sale of
their business or lease of the subject property. Instead, the Board relied on substantial
evidence in the record demonstrating that for at least one year between the sale to SMM in
2012 and the opening of Hickman Metal Recycling in early 2016, the subject property was
not used to conduct scrap metal recycling.
¶14. The Board was presented with substantial evidence that indicated that scrap metal
recycling had ceased on the subject property. Lori herself stated that upon opening in 2016,
Hickman Metal Recycling needed to regain customers who “got used to going to other
businesses.” In addition, the Hickmans allowed David Motor to be administratively
dissolved in October 2013, and they did not create the new entity, Hickman Metal Recycling,
7until December 2015. Moreover, in their 2012 non-compete agreement with SMM, the
Hickmans agreed not to engage in any scrap metal or recycling business in Mississippi, and
the non-compete agreement remained in effect until the arbitrator’s ruling in July 2015.3
Finally, during the Board hearing, several members of the community stated that the
Hickmans’ business had been out of operation for more than a year.
¶15. The Hickmans argue that a commercial lease agreement theysigned with SMM shows
that SMM continued scrap metal recycling operations on the subject property. However, the
lease agreement stated that it was for a six-month term beginning in August 2012 and ending
in February 2013. There is no evidence that the lease was extended. Nor is there any direct
evidence that SMM ever conducted any scrap metal recycling on the subject property.
¶16. The Hickmans also presented invoices for scrap metal recycling services around July
2012 and a February 2012 bill of sale for a car crusher. However, this activity all predated
the sale to SMM. As such, these documents do not contradict the Board’s determination that
the nonconforming use ceased for at least one year after the sale to SMM.
¶17. The Hickmans argue that the privilege licenses they obtained for David Motor from
2013 to 2016 demonstrate a continuation of the nonconforming use. However, as Creel
noted, a privilege license only provides the licensee with the authority to engage in business;
it does not establish that business or any particular activity was actually conducted on the
subject property. Similarly, the Hickmans provided bank statements for Hickman Enterprises
3 The arbitration award stated that the Hickmans “would like to open two scrap metal
businesses on land that [David] owns in Biloxi,” indicating that the Hickmans were not then
engaged in such business on the subject property.
8from 2013 and 2014. However, the bank statements cover only part of the disputed period,
and more important, they only show that Hickman Enterprises had a bank account during that
time. Nothing in the bank statements indicates that scrap metal recycling was being
conducted on the subject property at any time.
¶18. The Hickmans also presented letters signed by two customers that stated that
“Hickman Recycling ha[d] been doing a service for [the customers] by storing [certain
materials] on [Hickman’s] property since April of 2013” and “February of 2014,”
respectively. However, “storing” materials for two customers is not the equivalent of a scrap
metal recycling business. Thus, the two letters do not establish that the Hickmans’
preexisting nonconforming use continued for any time during the disputed period following
the sale to SMM.
¶19. Finally, although some citizens stated at the public hearing before the Board that the
Hickmans’ scrap metal business had never ceased operations, a similar number told the
Board that the nonconforming use had ceased for longer than a year. As stated above, this
Court will not “reweigh the evidence” presented to the Board; rather, our role is only “to
verify [that] substantial evidence exists.” Childs, 1 So. 3d at 861 (¶19). Accordingly, the
various public comments at the hearing before the Board provide no basis for reversal.
¶20. In summary, there is substantial evidence to support the Board’s decision. The Board
reasonablyrelied on evidence that the nonconforming use ofthe subject propertyceased after
the Hickmans sold their business in 2012 and did not resume until early 2016, and the
Hickmans presented little evidence that any scrap metal recycling occurred on the subject
9property during the same period of time. Applying our deferential standard of review, we
conclude that the Board’s decision is not arbitrary or capricious but is instead “fairly
debatable.” And because the Board’s “decision is fairly debatable, we will not reverse it.”
Hatfield, 235 So. 3d at 21 (¶10) (brackets and quotation marks omitted).
Outcome: AFFIRMED
Plaintiff's Experts:
Defendant's Experts:
Comments: