Understanding the Concept of Municipal Estoppel
Q. What is “municipal estoppel"?
A. A legal doctrine employed by courts to assure that citizens are treated fairly in their dealings with municipalities. If a person proves that a matter was taken up with the municipality:
1. through an elected official or a municipal employee with actual authority to represent the municipality on the matter;
2. who either withholds important facts or makes a statement to a person which proves to be false, with the intention that the person rely upon the information provided; and
3. the person is ignorant of the truth, reasonably relies upon the information, and suffers damage as a result of the reliance,
the courts will not allow the municipality to act in a manner contrary to that representation. That is, the municipality will be “estopped" or “prevented" from taking action to reach some other result with the person. Thomas v. Hooksett, 153 N.H. 717 (2006). The law does not favor the application of the doctrine against municipalities, especially when a valuable public interest may be jeopardized. The party claiming estoppel has the burden of proof. Hounsell v. N. Conway Water Precinct, 154 N.H. 1 (2006).
Q. What types of actions or decisions could give rise to this claim?
A. The doctrine might apply to almost any situation where a citizen asks for advice or information that results in a decision to either take or not take action upon an opportunity. Some examples from the many reported cases deal with issues such as revocation of a building permit that was previously granted (Thomas v. Hooksett, above); refusal to maintain a road after maintenance was promised (Turco v. Barnstead 136 N.H. 256 (1992)); refusal to release a record of an investigation (Hounsell v. N. Conway Water Pct, above); an enforcement action to stop live nude dancing that had been conducted at the location for a significant length of time (Seabrook v. Vachon Management, Inc. 144 N.H. 660 (2000)); and an appeal from denial of a request for relief from a ZBA for improvements made to a residential property (Healey v. New Durham ZBA, 140 N.H. 232 (1995)).
Q. What are the potential impacts when an elected official or municipal employee provides incorrect or incomplete information to a citizen?
A. The economic impacts to the citizen can be significant as time and other resources are invested under the mistaken belief that something is allowed when it is not allowed. The person may buy land assuming that a use is allowed when in truth it is not, or may pass on a good business opportunity under the mistaken belief that a use is prohibited. The person may move into a home assuming that the road providing access will be publicly maintained, when in fact it will not be so maintained. The dispute itself will involve legal and other costs to both the citizen and the municipality as each tries to defend its view of the correct response to the issue at hand. For the municipality, perhaps the greatest potential cost is the loss of trust if citizens come to believe that they cannot reasonably rely upon the information and advice provided by municipal officials.
Q. How can we avoid creating situations where advice from officials or employees could lead to claims of municipal estoppel?
A. Referring back to the elements of the doctrine, a key requirement is that the advice must have come from someone who was authorized to provide the information. Thus, take steps to clarify the organization chart and job descriptions of employees. Train staff members on the limits of the information they are authorized to provide and on how to refer citizens to the persons who are authorized to deal with different issues.
The elected officials of the municipality must be even more careful when they give advice, since their status causes citizens to place a higher reliance on the information received from them. Although advice from a single selectman or council member does not legally act to bind the municipality, a citizen is very likely to believe that a single elected official’s advice is the final word on an issue. Elected officials should refer questions from citizens to appropriate staff members, and should not give out advice without first discussing the matter with the other members of the board at a duly noticed public meeting.
For both elected officials and employees, the key is not to speak before adequately researching the facts behind the question, and the law or regulation that is applicable to the situation. A quick answer may seem like good customer service, but it may also lead to a major dispute in the future. It is far better to admit that one doesn’t know the answer, than to give an incorrect or incomplete answer. The time taken for adequate research and reflection is time well spent.
Since disputes are often resolved based upon the records created during the decision-making process, it may be appropriate to require the citizen to put the question in writing, and attach important documents or plans. A written request helps to assure that everyone associated with the issue is using the same set of facts to analyze the question. It may also be appropriate to seek advice from other municipal departments, town counsel, the town engineer or other consulting professional before providing an answer to the question.
Q. Does this mean that every answer we give out creates a “precedent" that will tie our hands into the future?
A. Not at all. To the extent that the question deals with an issue that is likely to come up again in the future, and to the extent that the answer is the result of careful research and application of the appropriate law and regulations, the answer will serve as an important guide to dealing with that issue in the future. It probably will not be absolutely binding, because the facts in each situation will almost certainly be a little different. The answer will be persuasive to future officials if the quality of the underlying research and analysis is high. The answer will not be persuasive if it was the result of a hasty process and inadequate research. The decisions to be made in the future should be guided by the answers which have come before, but there is no requirement to continue to implement decisions of the past that have proven to be inaccurate, or have poorly served the municipality.
Q. Do you mean that as an official of today I am never bound by the decisions of people that served in the office before me?
A. Again, not at all. The cases discussed above sometimes resulted in a finding of municipal estoppel, and the municipality was forced to live with the impacts of the prior decisions. The cases are about fairness, and whether the actions of the citizens and municipal officials were objectively reasonable. If you are presented with a situation today that was created by decisions of the past, the task is to decide what is fair and reasonable to all parties. If the town has maintained a road for years without complaint, it may not be fair or reasonable to withdraw services because of a technical flaw in how the road was created, or a lack of records the town was required to maintain. However, if a citizen has received a benefit that was in direct violation of a state statute or a clear regulation, it is not fair or reasonable to continue to provide the benefit, since anyone could have read the statute and known that the action was illegal. Each situation will have to be analyzed based upon all of the facts.
Hopefully, once current officials have gone through this process on an issue, they will use their best efforts to make decisions based upon adequate facts and research, and not defer these disputes to the officials of the future. If the facts of a current situation offend your sense of fairness, it is likely that others will be offended as well. We strongly suggest that you involve town counsel in any decision to stop a service that has traditionally been provided, and also to defend against claims that “promises were made" when the facts seem to suggest that the person receiving the benefit had no reasonable expectation that the promise could be enforced.