No Special Relationship Without Justifiable Reliance: Building-Permit Approvals Do Not Overcome Public-Duty Immunity When Applicants Deviate From Approved Plans

Introduction

In Hoff v. City of Burlington, 2025 ND 62, the North Dakota Supreme Court affirmed the dismissal of a homeowner-contractor’s multifaceted challenge against a city’s enforcement of its floodplain ordinances. The decision addresses a suite of public-law and private-law issues that frequently arise at the intersection of floodplain management, municipal permitting, and governmental immunity: evidentiary exclusions, writs of mandamus, declaratory and injunctive relief, inverse condemnation, and tort liability against a political subdivision.

Casey Hoff, a licensed contractor, obtained a building permit in October 2017 to add onto his residence located in Burlington’s floodplain. After he substantially completed the project, municipal and county reviews identified noncompliance with floodplain provisions—culminating in the city’s refusal to issue a certificate of occupancy. Hoff sued for mandamus, declaratory judgment, injunction, inverse condemnation, and later negligence, alleging the City’s “faulty” substantial-improvement analysis caused the impasse. Following a bench trial on the equitable and takings claims and summary judgment on negligence, the district court denied all relief. The Supreme Court affirmed in full.

The opinion clarifies the “special relationship” exception to political subdivision immunity under N.D.C.C. § 32-12.1-03(3)(f)–(g) in the building-permit context: a city’s approval based on an applicant’s information does not create justifiable reliance where the applicant later deviates from approved plans or withholds material information, especially where the permit expressly disclaims warranties and requires code compliance. The Court also reinforces familiar but important takings principles: the denial of a certificate of occupancy for a noncompliant floodplain structure is not a per se or total regulatory taking absent proof that the parcel, viewed as a whole, has been stripped of all economically beneficial use.

Summary of the Opinion

Evidentiary exclusions: No reversible error in excluding three exhibits under N.D.R.Ev. 407 and other grounds; appellant failed to show any effect on substantial rights under N.D.R.Ev. 103(a) and N.D.R.Civ.P. 61.
Mandamus: Denied. Hoff lacked a clear legal right to a certificate of occupancy because his project did not comply with existing floodplain ordinances and deviated from the approved permit.
Declaratory judgment: Denied. The court found Hoff’s addition was not constructed in accordance with Burlington’s ordinances.
Injunction: Denied. The request to bar revocation of the (expired) permit was moot; a request to enjoin prosecution was barred by statute and inadequately briefed on appeal.
Inverse condemnation: Denied. No total regulatory taking; the City’s enforcement did not deprive the parcel of all economically beneficial use when viewed as a whole.
Negligence: Summary judgment for the City affirmed under N.D.C.C. § 32-12.1-03(3)(f). Hoff failed to raise a genuine issue of material fact on the “special relationship” exception—specifically, the fourth element requiring justifiable reliance.
Estoppel: Not considered. The Court refused to remand for equitable estoppel (as urged by the dissent) because Hoff did not plead or argue estoppel; issues not raised below or briefed are waived. The majority underscored that equitable doctrines cannot circumvent statutory frameworks, and “clean hands” would in any event be a barrier on these facts.

Analysis

Precedents and Authorities Cited

Evidentiary and harmless error: Wollan v. Innovis Health, LLC, 2024 ND 169; Spottie, Inc. v. Baiul-Farina, Ltd., 2024 ND 88; N.D.R.Ev. 103(a); N.D.R.Civ.P. 61. The Court emphasized that even if exclusion were debatable, reversal requires prejudice—none shown here.
Mandamus and municipal discretion: N.D.C.C. § 32-34-01; Nordquist v. Alonge, 2024 ND 157; Burgum v. Jaeger, 2020 ND 251; Berg v. Jaeger, 2020 ND 178; GO Comm. ex rel. Hale v. City of Minot, 2005 ND 136; Haugland v. City of Bismarck, 429 N.W.2d 449 (N.D. 1988). These authorities establish that mandamus compels ministerial duties, not discretionary determinations, and courts defer to municipal implementation of ordinances absent an abuse of discretion.
Declaratory judgments: N.D.C.C. §§ 32-23-01, -07, -12; Denault v. State, 2017 ND 167; Kuntz v. State, 2019 ND 46. Declaratory relief is discretionary and designed to clarify legal relations; no abuse of discretion was found.
Injunctions: N.D.R.Civ.P. 65; N.D.C.C. chs. 32-05, 32-06; State ex rel. City of Marion v. Alber, 2019 ND 289; N.D. Private Investigative & Security Bd. v. TigerSwan, LLC, 2019 ND 219; Riemers v. Jaeger, 2013 ND 30. The Court noted statutory constraints on injunctions, including the bar on enjoining prosecutions (N.D.C.C. § 32-05-05), and applied waiver for inadequate briefing.
Inverse condemnation and takings: N.D. Const. art. I, § 16; Nw. Landowners Ass’n v. State, 2022 ND 150; Wild Rice River Estates, Inc. v. City of Fargo, 2005 ND 193; Wilkinson v. Bd. of Univ. & Sch. Lands, 2022 ND 183; Liberty Petroleum Corp. v. N.D. Indus. Comm’n, 2024 ND 183; Lenertz v. City of Minot, 2019 ND 53; Grand Forks-Traill Water Users, Inc. v. Hjelle, 413 N.W.2d 344 (N.D. 1987); Minch v. City of Fargo, 332 N.W.2d 71 (N.D. 1983); In re 2015 Application for Permit to Enter Land, 2016 ND 165. These cases reinforce the parcel-as-a-whole rule and set the benchmarks for per se and total regulatory takings.
Governmental immunity and the special-relationship exception: N.D.C.C. § 32-12.1-03(1), (3)(f)–(g); Tangedal v. Mertens, 2016 ND 170; M.M. v. Fargo Pub. Sch. Dist., 2010 ND 102; Fastow v. Burleigh Cnty. Water Res. Dist., 415 N.W.2d 505 (N.D. 1987). The opinion turns on element four of § 32-12.1-03(3)(g): justifiable reliance (or its statutory alternatives).
Waiver and estoppel constraints: Rutherford v. BNSF Ry. Co., 2009 ND 88; Northstar Ctr., LLC v. Lukenbill Fam. P’ship, LLLP, 2024 ND 212; Hoever v. Wilder, 2024 ND 58; Trosen v. Trosen, 2022 ND 216; N.D.R.App.P. 28(b)(7)(A). On equitable estoppel against government: Miller v. Walsh Cnty. Water Res. Dist., 2012 ND 152; Johnson v. City of Burlington, 2020 ND 81; City of Minot v. Johnston, 379 N.W.2d 275 (N.D. 1985). The Court also invoked N.D.C.C. § 1-01-06 (code supersedes conflicting common law) and the clean-hands doctrine.
Reliance on zoning changes distinguished: City of Fargo v. Harwood Twp., 256 N.W.2d 694 (N.D. 1977) (substantial reliance against later zoning changes) distinguished because Burlington did not change any ordinance; Hoff’s project simply failed to comply with existing floodplain rules.

Legal Reasoning

1) Evidentiary Rulings: No Prejudice, No Reversal

The district court sustained objections to three exhibits—on relevance, hearsay, and Rule 407 (subsequent remedial measures). Even assuming arguendo any error in applying Rule 407, reversal requires a showing that the exclusion affected substantial rights. Hoff neither identified how the exclusions prejudiced him nor showed that the facts those exhibits would prove (the house’s condition, noncompliance determinations, refusal to issue occupancy) were not otherwise established at trial. Under N.D.R.Ev. 103(a) and N.D.R.Civ.P. 61, the Court found no reversible error.

2) Mandamus and Declaratory Relief: No Clear Legal Right, and Noncompliance Found

Mandamus lies to compel performance of a legal duty, not to direct discretionary acts. The Court deferred to Burlington’s application of its floodplain ordinances, emphasizing separation-of-powers limits. The record showed:

Hoff’s structure is within the floodplain and, as built, constituted a “substantial improvement” because actual costs (about $150,000–$160,000) exceeded 50% of the (even entire-parcel) pre-improvement valuation ($230,000). By ordinance, a substantial improvement triggers elevation and related requirements for the entire structure.
Hoff expanded scope beyond the permit: a 1,932 sq. ft. addition (vs. 1,716 sq. ft.), partial demolition and rebuild, and a bathroom remodel that was not disclosed.
The permit’s signed acknowledgments required compliance with all ordinances, expressly disclaimed warranties, and warned that issuance does not authorize violations.

Because Hoff did not comply with the floodplain code or the permit, he had no “clear legal right” to compel issuance of a certificate of occupancy, and the district court did not abuse its discretion in denying mandamus or declaratory relief.

The Court rejected Hoff’s claim that the City “changed the rules.” The ordinances were constant; it was the project’s actual scope and cost that shifted the improvement into “substantial” territory—an assessment ultimately tied to actual costs and the structure’s market value, not to a preliminary estimate.

3) Injunction: Mootness and Statutory Bar

The request to enjoin revocation of the building permit was moot because the permit had expired. As to an injunction against prosecution, the district court relied on N.D.C.C. § 32-05-05 (which restricts injunctions in this sphere). On appeal, Hoff provided no developed argument or authority challenging the statutory bar. The Court treated the issue as waived under N.D.R.App.P. 28(b)(7) and related precedent.

4) Inverse Condemnation: No Total Regulatory Taking

The Court reaffirmed that a total regulatory taking exists only when the regulation strips the owner of all economically beneficial use, assessed under the parcel-as-a-whole rule. Even assuming the City’s enforcement precluded occupancy, that limits an individual use; it does not establish that the property lost all value. The City’s floodplain regulations serve a legitimate purpose aligned with FEMA and the NFIP; there was no proof of bad faith or singling out. Without evidence of total deprivation of value, the inverse condemnation claim failed as a matter of law.

5) Negligence and Public-Duty Immunity: No Special Relationship

The negligence claim turned on N.D.C.C. § 32-12.1-03(3)(f)–(g), which immunizes political subdivisions for claims “directly or indirectly caused by the performance or nonperformance of a public duty,” including licensing and approvals—unless a “special relationship” exists. All four statutory elements must be satisfied; the Court focused on the fourth: justifiable reliance on the subdivision’s affirmative undertaking (or the statute’s alternative formulations).

Hoff argued he relied on the City’s permit approval and the engineer’s early statement that the proposal did not constitute a substantial improvement. The Court found no triable fact on justifiable reliance because:

The City’s approval rested entirely on Hoff’s own information and sketch; the final project diverged materially without notice to the City.
Hoff admitted additional unpermitted or undisclosed work (bathroom remodel; partial demolition and rebuild), and there was no contact during construction.
The permit warned that issuance does not authorize violations, required compliance with all codes, and disclaimed warranties or a duty owed to the permittee.
Hoff personally assured the council he would “build to flood code,” undermining any claim that approval signaled a guarantee of occupancy regardless of compliance.

On this undisputed record, any reliance on approval as a promise of ultimate code compliance or occupancy was not “justifiable.” Failure on this element defeated the special-relationship exception; the City remained immune, and summary judgment was affirmed.

6) Estoppel: Waived, and Equitable Limits Acknowledged

A dissent would have remanded for the district court to consider equitable estoppel, analogizing to Buegel v. City of Grand Forks, 475 N.W.2d 133 (N.D. 1991). The majority declined because estoppel was not pleaded or argued below or on appeal—issues first raised on appeal are waived. The Court also noted:

Equitable estoppel against the government is disfavored and available only in limited circumstances;
Clean-hands principles would pose a significant barrier given the district court’s findings of misrepresentations and omissions; and
Statutory frameworks (like § 32-12.1-03) govern governmental liability, and equitable doctrines cannot be used to circumvent the code (N.D.C.C. § 1-01-06).

Key Doctrinal Clarifications

Actual project costs govern substantial-improvement determinations: Floodplain “substantial improvement” turns on the actual costs relative to the pre-improvement market value of the structure. Preliminary estimates do not insulate builders if actual costs cross the threshold.
Permit disclaimers matter for reliance: A permit that explicitly requires code compliance and disclaims warranties undercuts “justifiable reliance” for special-relationship purposes, especially where the applicant deviates from approved plans or withholds material information.
Denial of occupancy is not a total taking: Even a prolonged refusal to issue a certificate of occupancy due to code violations does not, by itself, establish a total regulatory taking absent proof of total loss of economic value of the parcel.
Preservation and briefing are decisive: Requests to enjoin prosecution must grapple with the statutory bar; estoppel theories must be pled, developed with evidence, and fully briefed or they are waived.

Impact

For Builders and Property Owners (especially in Floodplains)

Expect “substantial improvement” to be judged by what you actually build and spend, not what you initially project. If actual costs exceed 50% of the pre-improvement structure value, the entire structure must comply with floodplain elevation and related requirements.
Maintain continuous communication with permitting authorities. Material deviations from approved plans, silent scope changes, or after-the-fact disclosures will undermine reliance arguments and expose projects to enforcement.
Do not assume permit approval equals an entitlement to occupancy. Read and heed permit disclaimers; they will be enforced.

For Municipalities

The opinion confirms robust public-duty immunity in licensing/approval contexts unless a fully satisfied “special relationship” is shown. Written permit disclaimers and clear code-references help preserve that immunity.
Where an early, informal assessment (e.g., “not a substantial improvement”) later proves incorrect based on actual project evolution, enforcement can proceed without creating municipal liability—especially where the applicant’s changes drove the noncompliance.

For Litigators

Plead estoppel explicitly if you intend to rely on it; develop evidence on each element and—when asserting it against government—address the limited circumstances in which it applies and clean-hands concerns.
In negligence claims against political subdivisions tied to approvals or inspections, focus on assembling proof for all four elements of the statutory special-relationship exception; the fourth element (justifiable reliance/control/increased risk) is often dispositive.
On takings claims, frame the property unit carefully and develop valuation evidence to address the parcel-as-a-whole test and economic usefulness—not just loss of a preferred use.

Complex Concepts Simplified

Substantial improvement (floodplain): In many floodplain codes (including Burlington’s), if the cost of improving a structure equals or exceeds 50% of the structure’s pre-improvement market value, the work is a “substantial improvement.” This typically triggers elevation and other floodproofing requirements for the entire structure, not just the new addition.
Base Flood Elevation (BFE): The computed elevation to which floodwater is anticipated to rise during a base (1%-annual-chance) flood. Codes often require floor elevations to be built to or above BFE by a specified margin.
Mandamus: An extraordinary writ used to compel a public official to perform a clear, ministerial duty (not to override discretionary decision-making).
Declaratory judgment: A court’s binding declaration of rights and status to resolve legal uncertainty. It’s discretionary and often denied when the facts show clear noncompliance or when other remedies are available.
Injunction: A court order preventing (or compelling) action. North Dakota statutes limit injunctions against public prosecutions; such requests must overcome specific statutory hurdles.
Inverse condemnation: A claim by a property owner that the government took or damaged property for public use without formal eminent domain proceedings. A “total regulatory taking” occurs only when regulation eliminates all economically beneficial use of the property, viewed as a whole.
Public-duty immunity and special relationship: Political subdivisions are immune from tort claims arising from performing public duties (like permitting) unless a “special relationship” exists. The claimant must prove, among other things, justifiable reliance on the government’s affirmative undertaking (or satisfy statutory alternatives such as direct control or increased risk).
Harmless error (evidence): Even if a court errs in admitting or excluding evidence, reversal requires a showing that the error affected substantial rights—i.e., it likely influenced the outcome.

Conclusion

Hoff v. City of Burlington reinforces several bedrock principles in North Dakota law, while crystallizing a key point about governmental immunity in the permitting arena:

A building-permit approval grounded on the applicant’s representations does not, without more, create justifiable reliance sufficient to overcome public-duty immunity—particularly when the applicant enlarges the project, omits material information, or contravenes floodplain ordinances, and where the permit itself requires full code compliance and disclaims warranties.
Floodplain enforcement keyed to actual costs and conditions can proceed even if early assessments (based on preliminary information) suggested no “substantial improvement.” It is the as-built reality that governs.
Denial of a certificate of occupancy for noncompliance is not a total taking absent proof that the parcel as a whole has lost all economically beneficial use.
Relief in equity and tort against municipalities is tightly cabined by statutes and preservation rules; estoppel theories must be pled and proven, and equitable relief will not circumvent statutory immunity—particularly where clean hands are lacking.

The opinion thus provides clear guidance to owners, builders, municipalities, and courts: in floodplains, strict adherence to code and to the permitted plan is indispensable; and in litigation, statutory frameworks for governmental liability and relief will be enforced as written.