                IN THE SUPREME COURT OF IOWA
                              No. 06–1487

                        Filed November 21, 2008


CHAMBERLAIN, L.L.C.,

      Appellant,

vs.

CITY OF AMES, IOWA and
AMES BOARD OF APPEALS,

      Appellees.



      On review from the Iowa Court of Appeals.



      Appeal from the Iowa District Court for Story County, Dale E.

Ruigh, Judge.



      Appellant challenges summary judgment dismissal of its suit

challenging the denial of an occupancy permit. DECISION OF COURT

OF APPEALS AND JUDGMENT OF DISTRICT COURT AFFIRMED.



      John F. Lorentzen and John T. Clendenin of Nyemaster, Goode,

West, Hansell & O’Brien, Des Moines, for appellant.



      William A. Wickett and Jason W. Miller of Patterson Law Firm,

L.L.P., Des Moines, and Jason C. Palmer and Andrew C. Johnson of

Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellees.
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STREIT, Justice.

         An Ames developer planned to build an apartment complex with

loft space that could be used for sleeping or storage. Uncertain whether

the lofts were permissible under the Ames Municipal Code, the developer

requested an interpretation of the code from the city’s building official,

who concluded the lofts were permissible.         When the building was

completed, the city denied the developer’s application for a certificate of
occupancy because it found the lofts violated the ceiling height

requirements for habitable space. The developer appealed to the city’s

board of appeals which upheld the denial of certification. The developer

then filed actions in the district court on this issue as well as asserting

recovery on the basis of promissory estoppel, equitable estoppel, and

vested rights. The district court and court of appeals rejected all claims

on summary judgment dismissal.           On further review, the developer

maintains issue preclusion bars the city from essentially withdrawing the

building official’s interpretation of the code. Because the interpretation

was not a final decision, it is not entitled to preclusive effect. Further,

because the building official’s interpretation was contrary to the building

code, the developer did not acquire vested rights in the interpretation.
We affirm the decision of the court of appeals and the judgment of the

district court.

         I. Facts and Prior Proceedings.

         The owners of Chamberlain, L.L.C. planned to build a four-story

mixed-use complex near the Iowa State campus. The first floor would

contain retail space, and the upper floors would contain apartment

units.    The design for some of the apartments included a loft or shelf

area that could be used as sleeping or storage space. The lofts provided

184 square feet of surface area, forty-five inches from the ceiling, and
                                         3

were accessible by stair-ladders.        The lofts had electrical outlets, data

ports for internet access, lighting (and light switches), and carpeting.
Since Chamberlain was uncertain whether the loft-shelf areas would

comply with the city’s building code requirements, it sought approval
from the Ames building official before proceeding with the project.

       In August or September 2003, two Chamberlain representatives

and the company’s architectural consultant met with the Ames building

official and the Ames fire inspector. While the parties dispute whether

actual design drawings with dimensions were reviewed during the

meeting, all agree the topic of the meeting centered on whether the loft

areas would be acceptable under the building and fire codes. The fire

inspector expressed concern that additional protections would be needed

if the spaces would be used for sleeping.             The building official then
sought input on the design at a staff meeting of city building inspectors.

       The building official called Chamberlain and indicated the lofts

were permissible so long as Chamberlain installed smoke detectors and

sprinklers above and below the lofts. The building official interpreted the

loft areas to be extensions of other code-compliant rooms, thus excluded
from ceiling height restrictions.        He believed this interpretation was
consistent with the building code’s intent and purpose.               Chamberlain

continued to develop the concept, and the city issued a building permit
in January 2004 after reviewing Chamberlain’s phased project plans.

       Chamberlain built the structure and secured tenants for the units.

When the building was nearly complete, the Ames fire chief/acting

building official1 stated in a letter that the loft areas did “not meet

minimum height requirements for habitable space” and a certificate of

       1The building official who provided Chamberlain with his interpretation of the
code no longer worked for the city.
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occupancy would not be issued unless significant modifications were

made to the apartments. A memo from the fire chief to the city manager
stated inspectors began noticing that the loft areas would be treated as

living space in May 2004, and some tenants and parents of tenants had

complained to the city due to concerns about the reduced height in the

loft areas.

       Chamberlain appealed the fire chief’s determination to the city’s

board of appeals.       The board found the fire chief’s interpretation “not

unreasonable” and determined the certificate of occupancy was properly

withheld.      The city issued a certificate of occupancy only after

Chamberlain barricaded the loft areas to prevent their use.

       Chamberlain filed two actions in district court.                First, it filed a

petition for writ of certiorari seeking a declaration that Chamberlain was

illegally denied a certificate of occupancy when it justifiably relied on a

valid code interpretation made by an authorized building official.                      A

second petition was filed in equity, contending the city was prevented

from applying a new interpretation of the building code through the

doctrines of equitable estoppel, vested rights, or promissory estoppel.

The cases were consolidated, and both parties moved for summary
judgment.2 The district court held there were no false representations or

exceptional circumstances to support an equitable estoppel claim, and

Chamberlain’s promissory estoppel claim failed because there was no

“clear and definite promise” to enforce the interpretation as to the lofts.

Further, the court determined Chamberlain did not have vested rights in

the building permit because the building did not comply with the

building code. Lastly, the court rejected Chamberlain’s claim the original


        2The district court did not issue a ruling with regard to the petition for writ of

certiorari, and therefore, it is not before us.
                                     5

building official’s determination prevented a new interpretation by the

board of appeals through issue preclusion. Chamberlain appealed each
of these conclusions.

      We transferred the case to the court of appeals, which affirmed the

district court’s decision in its entirety.    Chamberlain sought further

review, claiming the building official’s initial determination of the

building code was an adjudication entitled to preclusive effect.       We

granted further review.

      II. Scope of Review.

      A ruling on a motion for summary judgment is reviewed for

correction of errors at law. City of Johnston v. Christenson, 718 N.W.2d

290, 296 (Iowa 2006). Summary judgment is properly granted

      if the pleadings, depositions, answers to interrogatories, and
      admissions on file, together with the affidavits, if any, show
      that there is no genuine issue as to any material fact and
      that the moving party is entitled to a judgment as a matter of
      law.

Iowa R. Civ. P. 1.981(3).     We examine the facts “in the light most

favorable to the party opposing the motion for summary judgment.”

Richardson v. The Commodore, Inc., 599 N.W.2d 693, 696 (Iowa 1999).

      When presented with an application for further review from the

court of appeals, we may consider “all of the issues properly preserved

and raised in the original briefs.” Bokhoven v. Klinker, 474 N.W.2d 553,

557 (Iowa 1991). “[W]e may review any or all of the issues initially raised

on appeal . . . whether or not they are specifically brought to our

attention in the applications for further review.” Id.

      III. Merits.

      Although Chamberlain did not raise the issue of vested rights in

the application for further review, we have decided to review the court of
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appeals decision on vested rights in addition to the preclusion issue

raised on further review. Id.

      A.    Issue preclusion.    Today we decide whether the building

official’s initial interpretation of the building code vis-à-vis the lofts is

entitled to preclusive effect. Issue preclusion means “that when an issue

. . . has once been determined by a valid and final judgment, that issue

cannot again be litigated between the same parties in any future
lawsuit.” Christenson, 718 N.W.2d at 297 (citations omitted).        A party

asserting issue preclusion must establish the following:

      (1) the issue concluded must be identical, (2) the issue must
      have been raised and litigated in the prior action, (3) the
      issue must have been material and relevant to the
      disposition of the prior action, and (4) the determination . . .
      in the prior action must have been necessary and essential
      to the resulting judgment.

Iowa Elec. Light & Power Co. v. Lagle, 430 N.W.2d 393, 397 (Iowa 1988)

(quoting Hunter v. City of Des Moines, 300 N.W.2d 121, 123 (Iowa 1981)).

An agency determination may be entitled to preclusive effect if the parties

had a full and fair opportunity to litigate the issue and if the

determination   was    considered   final.    Id. at   397–98    (citing   the

Restatement (Second) of Judgments § 83 (1982)).
      The building official’s interpretation of the code was not entitled to

preclusive effect because the interpretation was not a final decision.

Chamberlain argues the city was required to file a writ of certiorari if it

disagreed with the building official’s interpretation. Because the time for

filing a writ of certiorari has long since passed, Chamberlain claims the

city acted illegally when it refused to issue a certificate of occupancy. We

disagree.

      The fact that the city failed to file a writ of certiorari challenging

the building official’s interpretation does not make the building official’s
                                       7

decision “final.” Both the International Building Code, adopted by the

City of Ames, and the Ames Municipal Code contain provisions

confirming the conditional nature of the building official’s interpretation.

Int’l Bldg. Code §§ 104.1, 105.4 (2003); Ames, Iowa, Mun. Code §§

5.106(4), (5), 5.131(1), (2) (2003).       Section 104.1 of the International

Building Code grants the building official the authority to give

interpretations of the code:

             The building official is hereby authorized and directed
      to enforce the provisions of this code. The building official
      shall have the authority to render interpretations of this code
      and to adopt policies and procedures in order to clarify the
      application of its provisions. Such interpretations, policies
      and procedures shall be in compliance with the intent and
      purpose of this code. Such policies and procedures shall not
      have the effect of waiving requirements specifically provided
      for in this code.

Int’l Bldg. Code § 104.1 (emphasis added). Thus, although the building

official is empowered to provide interpretations of the code, he is

restricted from being able to make interpretations that directly contradict

or ignore the plain provisions of the code.

      The Ames Municipal Code also indicates that the building official’s

interpretations cannot be considered final adjudications by which the
building official and the city will forever be bound unless the city files a

timely writ-of-certiorari action.   Regardless of prior interpretations, the

building official can deny a building permit application if the plans do

not conform “to the requirements of the Code and other pertinent laws

and ordinances.”    Ames, Iowa, Mun. Code § 5.106(4).         Moreover, even

after an interpretation has been made and/or a building permit has been

issued, the Ames Municipal Code provides:

             The issuance of a permit or approval of plans and
      specifications shall not be construed to be a permit for or
      approval of any violation of any of the provisions of this
                                       8
      Code. No permit appearing to give authority to violate or
      cancel the provisions of this Code shall be valid. . . . The
      issuance of a permit based upon plans and specifications
      shall not prevent the Building Official from thereafter
      requiring the correction of errors in said plans and
      specifications or from preventing building operations being
      carried on thereunder when in violation of this Code or of
      any other ordinance of the City.

Id. § 5.106(5); accord Int’l Bldg. Code § 105.4.       Finally, even after the

certificate   of   occupancy   has   been   granted,   various   officials   are

empowered, regardless of prior interpretations, to initiate abatement

action against a building if it is “manifestly unsafe” or violates any code,

ordinance, or regulation.      Ames, Iowa, Mun. Code § 5.131(1), (2); Int’l

Bldg. Code § 110.4.

      These provisions demonstrate an interpretation of the code by the

building official is not an adjudication of rights unalterable by the city.

The city is empowered to deny an occupancy permit based on safety

concerns or when the building does not comply with the provisions of the

code. Ames, Iowa, Mun. Code § 5.106(5); Int’l Bldg. Code § 105.4. In our

case, the fire chief/acting building official determined the lofts were both

unsafe and in violation of the building code. Int’l Bldg. Code § 1208.2.

The lofts had only forty-five inches of headroom, and the building code

requires seven and one-half feet for habitable spaces. Id. Even though

the building official interpreted the loft areas to be extensions of other

code compliant rooms, thus excluded from ceiling height restrictions,

such an interpretation directly contradicts the plain provisions of the

code. The loft areas were the size of a standard bedroom (148 square

feet), and considering a space of that size to be an extension of another
room seems illogical and plainly contrary to the code requirements. See

Int’l Bldg. Code § 1208.3.
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      If a prior interpretation is later altered, the building owner has the

right to a hearing in front of the board of appeals and afterwards judicial

review. Int’l Bldg. Code § 112. Chamberlain exhausted these remedies

when it appealed the city’s interpretation that the lofts violated the

ceiling height restrictions of the code and lost.      The building official’s

initial interpretation of the code was not a final decision, and therefore,

we hold it is not entitled to preclusive effect.
      B.    Vested Rights.       A building official’s interpretation of the

building code may be binding in certain instances under the doctrine of

vested rights. Generally, a city is not estopped from revoking a validly

issued building permit. B & H Invs., Inc. v. City of Coralville, 209 N.W.2d

115, 118 (Iowa 1973).          However, when the permit holder makes

expenditures in reliance on the permit, he may acquire vested rights in

that permit, and the city may be estopped from revoking the permit. Id.;

see also City of Lamoni v. Livingston, 392 N.W.2d 506, 510 (Iowa 1986).

But, if the permit was not validly issued or if the building does not

comply     with   applicable   requirements,   a   permit   can   be   revoked

notwithstanding the permit holder’s reliance.       City of New Hampton v.

Blayne-Martin Corp., 594 N.W.2d 40, 44–45 (Iowa 1999).
      As the building official has statutory authority to provide

interpretations that are consistent with the code, an interpretation by the

building official is akin to a building permit for the purposes of a vested

rights analysis. Thus, so long as the interpretation does not contradict

the plain provisions of the building code, an individual may acquire

vested rights in that interpretation if he or she made expenditures in

reliance on the interpretation. When the building official’s interpretation

resolves some kind of ambiguity or interprets an indefinite provision of
                                    10

the building code, a party can enforce that interpretation under the

theory of vested rights.

      In this case, however, the lofts, measuring 148 square feet (the size

of a standard room) with forty-five inches of headroom, did not comply

with the building code, which requires a ceiling height of seven and one-

half feet for all habitable spaces. Int’l Bldg. Code § 1208.2. Although the

building code does permit the building official to approve alternate
designs, these designs must comply with the intent of the code and meet

applicable safety requirements.      Id. § 104.11.    Thus, even though

Chamberlain made substantial expenditures in reliance on the building

inspector’s interpretation and the building permit, Chamberlain did not

acquire vested rights to an occupancy certificate since the lofts violated

the plain provisions of the code.

      VI.   Conclusion.

      Because the building official’s interpretation of the code with

respect to the lofts was not a final decision, Chamberlain is not entitled

to utilize the doctrine of issue preclusion. Further, as the lofts do not

comply with the building code, Chamberlain did not acquire vested rights

in the building official’s interpretation. Therefore, we affirm the decision
of the court of appeals and the judgment of the district court.

      DECISION OF COURT OF APPEALS AND JUDGMENT OF

DISTRICT COURT AFFIRMED.

      All justices concur except Baker, J., who takes no part.
