An Allen Superior Court correctly ruled that a travel plaza had a vested right to develop its plans under an original zoning ordinance, the Indiana Court of Appeals affirmed today.

The case of City of New Haven Board of Zoning Appeals v. Flying J. Inc., No. 02A03-0905-CV-74, came before the appellate court again after the Court of Appeals ruled that all of the proposed services Flying J wanted to offer at its 17.7-acre site were permitted under the zoned C-1 District. The New Haven Board of Zoning Appeals determined certain proposed services weren't permitted under the C-1 zoning ordinance.

The case was remanded to enter a final order in favor of Flying J, but while the litigation was under way, New Haven amended its C-1 zoning ordinance restricting the size of service stations to 2 acres or less. As applied, the amended ordinance affected only Flying J.

Flying J was unaware of the zoning changes and submitted its development plan to the BZA; the board rejected it citing the amended ordinance. The trial court reversed.

At issue is whether the amended zoning ordinance is applicable to Flying J's planned travel plaza. The BZA argued because Flying J hadn't begun construction on the plaza, it had no vested right to develop it pursuant to the original zoning ordinance; Flying J argued it had a vested right, its plaza is a nonconforming use, and the amended zoning ordinance doesn't apply.

The Court of Appeals relied on several cases including the three involving the Metropolitan Development Commission of Marion County v. Pinnacle Media. In Pinnacle I, 836 N.E.2d 422, 424 (Ind. 2006), the Indiana Supreme Court emphasized that the developer had yet to begin construction on the billboards in question. In Pinnacle II, 846 N.E.2d 654, 655-56 (Ind. 2006), the high court further explained vested rights may well accrue prior to filing of certain applications. The Court of Appeals determined in Pinnacle III, 868 N.E.2d 894, 900-01 (Ind. Ct. App. 2007), that there is no bright-line rule that construction has to begin to show a vested right and that the existence of vested rights is fact-dependent.

"We read the Pinnacle cases to mean that, while construction definitely does establish a vested right, mere preliminary work, including filing of a building permit, does not. In situations falling between these two extremes, courts must engage in a fact-sensitive analysis to determine whether vested rights have accrued prior to application for a building permit or construction," wrote Judge Paul Mathias.

In the instant case, Flying J hadn't begun construction but it had spent millions of dollars to prepare for construction, including surveying and engineering costs. These costs could give rise to a vested right, wrote the judge.

Under the facts and circumstances of the case, the appellate court couldn't say the trial court erred in finding the amended zoning ordinances were subject to Flying J's vested right in the property and the amended ordinance wasn't applicable to the plaza.