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County of Boise, A Political Subdivision of the State of Idaho v. Idaho Counties Risk Management Program

November 30, 2011

COUNTY OF BOISE, A POLITICAL SUBDIVISION OF THE STATE OF IDAHO, PLAINTIFF/APPELLANT,
v.
IDAHO COUNTIES RISK MANAGEMENT PROGRAM, UNDERWRITERS (ICRMP), AND DOES I THROUGH X, DEFENDANT/RESPONDENTS.



Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Cheri C. Copsey, District Judge.

The opinion of the court was delivered by: J. Jones, Justice.

2011 Opinion No. 126

Stephen W. Kenyon, Clerk

The Judgment of the district court is affirmed.

This is an insurance coverage dispute between the County of Boise (the County) and its insurer, Idaho Counties Risk Management Program (ICRMP). ICRMP refused to defend the County in Fair Housing Act (FHA) litigation in federal court, which the County claimed breached its insurance agreement. The district court determined the FHA claims against the County were excluded from the policy and granted summary judgment to ICRMP. We affirm the district court.

I.

BACKGROUND

Alamar Ranch, LLC (Alamar) sued the County in federal court in January 2008, alleging the County violated the FHA. At the time, the County had a Public Entity Multi-Lines Insurance Policy (the Policy) with ICRMP, which included errors and omissions coverage.*fn1 The County timely notified ICRMP of Alamar's FHA claims. ICRMP declined to defend the County because ICRMP determined that Alamar's claims were beyond the scope of the Policy's coverage. Alamar's complaint alleged*fn2 :

4. This case arises out of Boise County's violations of the Fair Housing Act, 42 U.S.C. § 3601 et seq. ("FHA"). . .

6. On April 19, 2007, Alamar submitted an application to the [County's Planning and Zoning Commission (P & Z)] requesting a Conditional Use Permit ("CUP") allowing Alamar to operate a 72-bed [residential treatment facility (RTC)] and private school on [its] Property. . . Alamar was required to apply for a CUP because the RTC is identified by Boise County as a use to be reviewed by Boise County under the conditional use process. The question under the CUP process, however, is not whether this proposed use should be allowed (it is an allowed use) but whether conditions of approval are warranted to ensure that such use does not "cause any damage, hazard, nuisance or other detriment to persons, property, or natural resources in the vicinity."

7. On August 2, 2007, Alamar presented its application to the P & Z during a public hearing. . . . On August 15, 2007, the P & Z once again convened to request responses from both Alamar as well as members of the public opposed to the application. . .

10. Although Alamar satisfied its burden of demonstrating at the hearing that Alamar's project satisfied each of the nine standards in the Boise County Zoning and Development Ordinance ("BCZDO") for issuance of a CUP, the application was denied by vote of the P & Z commissioners at the conclusion of the August 15, 2007 hearing (the P & Z arrived at a 3-3 tie vote on the motion, which Boise County deemed a denial of the application).

11. On September 28, 2007, the P & Z issued a written decision denying Alamar's application. Because there was no basis within the CUP standards to deny the application, the P & Z commissioners, as a pretext, manufactured the following reasons for the denial of the application . . . Neither rationale is among those listed in the BCZDO for denial of a CUP.

12. On October 18, 2007, Alamar timely filed a notice of appeal of the P & Z's decision to the Boise County Board of Commissioners ("Board"). In its appeal, Alamar informed Boise County that it had a duty under the FHA to approve the CUP and allow the project to be built so that housing could be made available for the "handicapped" youth that Alamar proposed to serve.

13. The Board heard the appeal at a public hearing held on January 28, 2008.

14. The Board deliberated (on the record) on March 10, 2008. The Board, knowing that it could not issue an absolute denial of the application, instead reversed the denial of the application. In doing so, however, it carried out its discriminatory purpose of preventing the project from being built by knowingly imposing numerous conditions on the CUP that individually or cumulatively made the proposed use of the property impossible. In essence, the conditions were a pretext designed to conceal the Board's discriminatory motive of preventing the project from being built.

15. On April 21, 2008, the Board entered a written decision and order delineating several onerous, arbitrary and ...


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