John Melton, R & J of Tennessee, Inc., and State of Tennessee, on the Relation of John Melton and R&J of Tennessee, Inc. v. City of Lexington, Tennessee

This case involves equitable estoppel against a municipal government. In 1998, a real estate company developed a large residential subdivision just outside the defendant city. The city annexed the property and provided services to the area. The developer later became insolvent and failed to pave one of the roads in the subdivision. Subsequently, the plaintiffs purchased lots in the subdivision fronting the unpaved road and applied to the defendant city for building permits for the lots. The city denied the permits in part because the road in front of the lots was unpaved. The plaintiffs filed this declaratory judgment action against the city, arguing that the city was estopped from denying the building permits on the basis of the unpaved roads, and that city was obligated to pave the road and to issue building permits to the plaintiffs. The trial court concluded that the city was not estopped from enforcing the requirement that the road be paved and was not obligated to pave the road. The plaintiffs now appeal. We affirm, concluding that the evidence does not preponderate against the trial court’s decision not to apply equitable estoppel under the circumstances of this case.