Check Into Cash of Mississippi, Inc. v. City of Jackson, Mississippi

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2013-CA-01506-COA

CHECK INTO CASH OF MISSISSIPPI INC. APPELLANT

v.

CITY OF JACKSON, MISSISSIPPI APPELLEE

DATE OF JUDGMENT: 08/05/2013
TRIAL JUDGE: HON. TOMIE T. GREEN
COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT: JAMES A. PEDEN JR.
ATTORNEYS FOR APPELLEE: GREGORY RONELL BURNETT
GAIL WRIGHT LOWERY
NATURE OF THE CASE: CIVIL - OTHER
TRIAL COURT DISPOSITION: AFFIRMED DECISION TO DENY USE-
PERMIT APPLICATION
DISPOSITION: REVERSED AND RENDERED: 03/10/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

BEFORE GRIFFIS, P.J., BARNES AND ISHEE, JJ.

GRIFFIS, P.J., FOR THE COURT:

¶1. Check Into Cash of Mississippi Inc. (“CICM”) appeals the City of Jackson’s decision

to deny a use permit. The use permit would allow CICM to engage in the title-pledge

business at its current payday-loan location. This Court finds reversible error as to the first

issue and renders a judgment in favor of CICM.

FACTS

¶2. Check Into Cash, Inc., is a consumer-financial-services company. Its primary
business is payday advances.1 In exchange for money, a payday advance accepts the

customer’s personal check and agrees to defer presentment until after the expiration of a

short holding period. Check Into Cash has numerous locations throughout the southeastern

United States. In addition to payday advances, Check Into Cash also provides its customers

installment, title, and pawn loans; check-cashing services; prepaid debit cards; bill-payment

services; wire-transfer services; and ATM access at its local offices.

¶3. At its locations in Mississippi, Check Into Cash does business through its subsidiary,

CICM. CICM operates in twenty-seven locations in twenty-four cities throughout

Mississippi. CICM operates three locations in the City of Jackson.

¶4. Since 2001, CICM has operated location at Metro Junction Shopping Center, 4896

Highway 18 West, Jackson, Mississippi. At this location, CICM is authorized to make

payday advances. CICM sought to expand its services and offer title-pledge services.2 On

May 19, 2011, the Commissioner of the Mississippi Department of Banking and Consumer

Finance issued CICM a license, under the Mississippi Title Pledge Act, to offer title-pledge

1
CICM's payday-advance services must comply with the Mississippi Check Cashers
Act, Miss. Code Ann. § 75-67-501 to -537 (Rev. 2013 & Supp. 2014); its title-pledge
services must comply with the Mississippi Title Pledge Act, Miss. Code Ann. § 75-67-401
to -449 (Rev. 2009); and it is regulated by the Mississippi Department of Banking and
Consumer Finance, which issues separate licenses for payday advances and for title-pledge
services at each location.
2
A title-pledge service involves loaning money to a borrower, who pledges his title
to personal property, usually an automobile, as security for the loan. The loan agreement is
a thirty-day written agreement in which the amount of money loaned in consideration of the
title pledge may not exceed $2,500. A title-pledge lender may contract for and receive a title-
pledge service charge, in lieu of interest and all other charges, not to exceed twenty-five
percent of the principal amount, per month, advanced in the title-pledge transaction. See
Miss. Code Ann. §§ 75-67-403, 75-67-413, & 75-67-415(f) (Rev. 2009).

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loans at this location.

¶5. In 2006, the City of Jackson amended its zoning ordinance. Based on the amended

ordinance, CICM’s location is in the C-3 General Commercial District. Before the

amendment, title-pledge-loan businesses were not permitted. The amendment allowed title-

pledge lending through a use-permit process. Jackson Zoning Ordinance § 702.05.l(a).21.

Similarly, section 702.05.l(a).11 allows payday-advance/check-cashing operations through

the use-permit process in the C-3 General Commercial District. However, the amendment

allowed CICM’s existing payday-advance operation to continue as a lawful nonconforming

use without a use permit.

¶6. Section 202.175 defines a “use permit” as “[a] use which is not permitted by right

but which is allowed in certain zoning districts, usually subject to conditions . . . as regulated

by the provisions of this Ordinance.” Based on section 1701.02-A, the use-permit

requirements are as follows:

When considering application for use permits, the City Council shall consider
the extent to which:

1. The proposed use is compatible with the character and development in
the vicinity relative to density, bulk and intensity of structures, parking,
and other uses;

2. The proposed use will not be detrimental to the continued use, value,
or development of properties in the vicinity;

3. The proposed use will not adversely affect vehicular or pedestrian
traffic in the vicinity;

4. The proposed use can be accommodated by existing or proposed public
services and facilities, including, but not limited to, water, sanitary
sewer, streets, drainage, police and fire protection, and schools;

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5. The proposed use is in harmony with the Comprehensive Plan;

6. The proposed use will not be hazardous, detrimental, or disturbing to
present surrounding land uses due to noises, glare, smoke, dust, odor,
fumes, water pollution, vibration, electrical interference, or other
nuisances.

¶7. When CICM decided to add title-pledge-loan services at this location, CICM

contacted the City of Jackson’s zoning administrator. The administrator confirmed that the

CICM location was zoned C-3 General Commercial District, and a use permit was required

to add the title-pledge-loan service.

¶8. CICM filed its Application for a Use Permit on June 10, 2011. CICM attached several

documents to the application: a corrective warranty deed containing a legal description of the

tract incorporating the subject property; three plats showing the exact location and details

of the existing site in Metro Junction Shopping Center (just to the north of the Walmart store,

to the east of Chadwick Drive, and to the southeast of Highway 18 West); a certificate from

the Mississippi Department of Banking and Consumer Finance certifying that CICM was

licensed to provide title-pledge services at this location; and a tax map, an ownership map,

and a land-roll detail for the subject property and surrounding area. Also, pursuant to section

1703.02.4-A of the zoning ordinance, CICM sent appropriate notice letters by certified mail,

return receipt requested, to the owners of all tracts of land located within 160 feet of the

subject property and to all neighborhood organizations registered with the Department of

Planning and Development having geographic boundaries within 1,000 feet of the subject

property.

¶9. The staff of the City Planning Board prepared a “Report to the Planning Board,” dated

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July 18, 2011. The report included the following:

STAFF RECOMMENDATION: Staff recommends the approval of the
requested Use Permit to allow a Title Pledge Service to operate at the already
existing Check Into Cash located within the Metro Junction Shopping Center
located at 4896 Highway 18 West based on the following:

1. Staff is of the opinion that the proposed Use Permit is
compatible with the surrounding area zoning C-3 (General)
Commercial District. Also, because its location is in an existing
shopping center and would not adversely affect vehicular or
pedestrian traffic. Additionally, the proposed use would not be
detrimental to the continued use, value or development of
properties in the vicinity[,] and it can be accommodated by
existing infrastructure.

PROPOSED MOTION: To recommend approval of a use permit to allow a
Title Pledge Service to operate at an already existing Check Into Cash
establishment located at 4896 Highway 18 West.

¶10. The City Planning Board conducted a public hearing on the permit application on July

27, 2011. Joseph Warnsley, the senior zoning planner who compiled the report, gave the

Planning Board an overview of the physical location, along with staff recommendations for

the permit application. The overview included maps showing that the property was in the

middle of a commercially developed area, diagrams and photographs of the CICM building,

and the requirements for obtaining a use permit. Warnsley recommended that the CICM’s

application should be approved because it met the requirements for a use permit.

¶11. At the hearing, Bruce Long spoke on behalf of CICM. Long stated that CICM sought

the use permit so that all of CICM’s locations, throughout the state, could advertise and offer

the same services, including title-secured loans.

¶12. Next, Genny Seeley spoke on behalf of the Association of South Jackson

Neighborhoods. Seeley stated that she had lived in the South Jackson area over forty years.

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She sent out an email survey to residents explaining that “there was already an existing check

cashing business there, and that they were just wanting to add an additional service, which

is a title pledge loan service.” She also said, “I got 28 responses back from residents in South

Jackson. . . . There were 25 residents that were against it, and there are three residents who

were in favor of it.” Seeley stated that she took a “straw poll” of thirty-seven people who

participated in a community meeting, some of whom also participated in her email survey.

Seeley then said, “we had 22 of 37 residents who participated there that were against it, and

there were none who would raise their hands that they were in favor of it.” Seeley also said:

I want to provide you with a map that is showing . . . the number of title pledge
loan services already available in South Jackson. . . . On this map, as you can
see, I believe that there are a total of nine . . . business[es] where this service
is available to our South Jackson residents. And if you will notice, there is
already an existing business not far down Highway 18 that already offers this
service to the residents of South Jackson. In conclusion, I would just say that
if the reason for issuing a permit is . . . for there being shown a need for this
particular change, then I would just ask you to look at this map. And . . . also,
you have a list of businesses there. . . . I would just ask you to consider
whether there is a need for an additional business like this.

¶13. In response, Long explained that there was competition for title-pledge-loan services

just like there was competition among the several hamburger-restaurant locations in the area.

He added that CICM’s current customers would be benefitted by being able to transact their

title-loan needs at the same place they cashed their checks. He pointed out that the CICM

location looks like a bank, rather than having bullet-proof glass, and that their customers

would be more comfortable doing business in a facility that blended into the surrounding

businesses.

¶14. At the conclusion of the hearing, a member of the City Planning Board made a motion

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to deny CICM’s use-permit application. The motion passed, with eight members voting for

the motion and one member voting against the motion.

¶15. By letter dated July 28, 2011, Interim Zoning Administrator Ester L. Ainsworth

advised CICM and Seeley of the City Planning Board’s decision. The letter instructed

CICM how to appeal the decision. It also set a hearing for an appeal of the decision for

consideration at the City Council meeting on September 19, 2011.

¶16. On August 4, 2011, CICM appealed the decision. On September 19, 2011, the City

Council considered CICM’s appeal at its regular zoning meeting. The City Council entered

an order that denied the application, which stated:

WHEREAS, the Council, after having considered the matter, is of the opinion
that a change in the regulations so as to permit the use of said property for said
purpose will adversely affect the surrounding properties, or otherwise be
detrimental to the public welfare.

The City Council denied CICM’s application by a four-to-two vote, with one member absent.

¶17. CICM appealed the City Council’s decision to the Hinds County Circuit Court. On

September 29, 2011, CICM filed a Bill of Exceptions and a Notice of Appeal. On August

5, 2013, the Hinds County Circuit Court affirmed the decision and dismissed the case.3 It is

from this decision that CICM now appeals.

ANALYSIS

3
CICM also appealed the decision to deny a separate application for a use permit to
offer title-pledge loans at its location located in Ridgewood Court in Jackson. However, in
this appeal, Hinds County Circuit Judge William Gowan reversed and rendered the City of
Jackson’s decision. This judgment has not been appealed by the City of Jackson. As a
result, CICM is allowed to offer title-pledge services at Ridgewood Court but not at Metro
Junction Shopping Center.

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¶18. In this appeal, CICM has raised three issues. First, CICM argues that the City’s

decision was arbitrary, capricious, and not supported by substantial evidence. Second, CICM

argues that the City’s zoning administrator failed to submit the entire record to the City

Council. Third, CICM argues that the City’s zoning administrator failed to publish proper

notice before the City Council hearing. Because we find the first issue to be determinative,

we do not address the remaining issues.

¶19. CICM argues that the application presented the evidence necessary to comply with

the requirements for a use permit in section 1701.02-A of the Zoning Ordinance. CICM

challenges the City Council’s order that denied the use permit. CICM contends that the City

Council did not make any findings of fact to support of its conclusion that the grant of the

use permit “will adversely affect the surrounding properties, or otherwise be detrimental to

the public welfare.”

¶20. We begin with the standard of review. We will reverse a zoning authority’s decision

only if that decision was arbitrary, capricious, discriminatory, illegal, or not supported by

substantial evidence. City of Biloxi v. Hilbert, 597 So. 2d 1276, 1280 (Miss. 1992). The

Mississippi Supreme Court has held:

Unlike decisions to zone or re-zone, which are legislative in nature, decisions
on request for special exceptions are adjudicative, and a reviewing court
subjects such decisions to the same standard as is applied to administrative
agency adjudicative decisions. Therefore, this appeal is subject to the
following standard of review: The decision of an administrative agency is not
to be disturbed unless the agency order was unsupported by substantial
evidence; was arbitrary or capricious; was beyond the agency’s scope or
powers; or violated the constitutional or statutory rights of the aggrieved party.

Mayor & Bd. of Aldermen of Prentiss v. Jefferson Davis Cnty., 874 So. 2d 962, 964 (¶6)

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(Miss. 2004) (internal citations omitted).

¶21. As a result, CICM has the burden “to prove by a preponderance of the evidence that

they have met the elements/factors essential to obtaining the conditional use permit.” Barnes

v. Bd. of Sup’rs, DeSoto Cnty., 553 So. 2d 508, 511 (Miss. 1989); see also Perez v. Garden

Isle Cmty. Ass’n, 882 So. 2d 217, 220 (¶7) (Miss. 2004). This Court must review the record

to determine whether the City’s decision was supported by the required substantial evidence.

See Barnes, 553 So. 2d at 511; Favre v. Hancock Cnty. Bd. of Sup’rs, 52 So. 3d 463, 465 (¶5)

(Miss. Ct. App. 2011). Substantial evidence is defined as “relevant evidence that reasonable

minds might accept as satisfactory to support a conclusion . . . .” Beasley v. Neelly, 911 So.

2d 603, 607 (¶8) (Miss. Ct. App. 2005) (citations omitted).

¶22. The use-permit requirements, in section 1701.02-A, provide:

When considering application for Use Permits, the City Council shall consider
the extent to which:

1. The proposed use is compatible with the character and development in
the vicinity relative to density, bulk and intensity of structures, parking,
and other uses;

2. The proposed use will not be detrimental to the continued use, value,
or development of properties in the vicinity;

3. The proposed use will not adversely affect vehicular or pedestrian
traffic in the vicinity;

4. The proposed use can be accommodated by existing or proposed public
services and facilities, including, but not limited to, water, sanitary
sewer, streets, drainage, police and fire protection, and schools;

5. The proposed use is in harmony with the Comprehensive Plan;

6. The proposed use will not be hazardous, detrimental, or disturbing to
present surrounding land uses due to noises, glare, smoke, dust, odor,

9
fumes, water pollution, vibration, electrical interference, or other
nuisances.

¶23. CICM’s application offered evidence that the proposed use of the property would

comply with all of the elements in section 1703.02.4-A. The City Council apparently

concluded that the proposed use of the property would violate the second element. Thus, we

must determine whether there was substantial evidence to support the City Council’s finding

that the use permit “will adversely affect the surrounding properties, or otherwise be

detrimental to the public welfare.”

¶24. The only possible evidence in the record that could support this finding is Seeley’s

testimony before the City Planning Board. However, her testimony does not support the

finding. Seeley testified that she and other South Jackson residents believed that there were

enough title-loan businesses in the area to meet the needs of the residents. She did not testify

that the proposed use would be detrimental to the continued use, value, or development of

properties in the vicinity. In other words, she said there were enough title-loan businesses

in the area, and she did not think another one was needed.

¶25. Evidence of public need is different than evidence that the proposed use would “be

detrimental to the continued use, value, or development of properties in the vicinity.”

Jackson Zoning Ordinance § 1703.02.4-A(2). In fact, evidence of public need is only

relevant if CICM sought to rezone the property. See Childs v. Hancock Cnty. Bd. of Sup’rs,

1 So. 3d 855, 860 (¶13) (Miss. 2009); City of Biloxi v. Hilbert, 597 So. 2d 1276, 1280 (Miss.

1992); Woodland Hills Conservation Ass’n v. City of Jackson, 443 So. 2d 1173, 1182 (Miss.

1983).

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¶26. To obtain a use permit, the applicant does not have to establish that there is a public

need for the special use. Instead, the applicant need only establish that it has met the

elements and factors necessary to obtain the use permit. See Barnes, 553 So. 2d at 511.

Here, CICM met its burden of proof and offered relevant evidence of the requirements of

section 1703.02.4-A(2) of the zoning ordinance.

¶27. We find that there is no relevant evidence in the record that would support the City

Council’s finding and the denial of the use permit. The fact that some in the community

believe that an additional title-loan business in the area was not needed was an argument in

favor of limiting competition in the area. But the Mississippi Supreme Court has long held

that “the purpose of zoning is not to limit or restrict competition, and a zoning ordinance

cannot be used to control competition.” Fowler v. City of Hattiesburg, 196 So. 2d 358, 361

(Miss. 1967) (citation and internal punctuation omitted); see also Coleman v. Southwood

Realty Co., 271 So. 2d 742, 744 (Miss. 1973) (“[T]he purpose of the zoning of property is

not to restrict competition.”).

¶28. Therefore, because we find the City of Jackson’s decision to deny the permit was not

supported by substantial evidence, we also find that the decision was arbitrary and

capricious. A “decision is arbitrary when it is not done according to reason and judgment,

but depending on the will alone. An action is capricious if done without reason, in a

whimsical manner, implying either a lack of understanding of or a disregard for the

surrounding facts and settled controlling principles.” Ryals v. Bd. of Sup’rs of Pike Cnty.,

48 So. 3d 444, 450 (¶22) (Miss. 2010) (citations omitted).

¶29. Accordingly, the judgment of the Hinds County Circuit Court is reversed, and a

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judgment is rendered to grant CICM the use permit requested.

¶30. THE JUDGMENT OF THE CIRCUIT COURT OF HINDS COUNTY IS
REVERSED AND RENDERED. ALL COSTS OF THIS APPEAL ARE ASSESSED
TO THE APPELLEE.

LEE, C.J., IRVING, P.J., BARNES, ISHEE, ROBERTS, CARLTON,
MAXWELL, FAIR AND JAMES, JJ., CONCUR.

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