IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

OCEAN BAY MART, INC., )

)

Plaintiff, )

v. )

)

THE CITY OF REHOBOTH ) C.A. No. 2019-0467-SG

BEACH, DELAWARE, )

)

Defendant. )

MEMORANDUM OPINION

Date Submitted: September 9, 2021

Date Decided: October 13, 2021

Richard A. Forsten, Pamela J. Scott, and Elizabeth S. Fenton, of SAUL EWING 

ARNSTEIN & LEHR LLP, Wilmington, Delaware, Attorneys for Plaintiff Ocean 

Bay Mart, Inc. 

Max B. Walton and Lisa R. Hatfield, of CONNOLLY GALLAGHER LLP, Newark, 

Delaware, Attorneys for Defendant The City of Rehoboth Beach, Delaware. 

GLASSCOCK, Vice Chancellor
1

The Ocean Bay Mart shopping center has been a Rehoboth landmark—

perhaps not the city’s most attractive—for decades. Located on Rehoboth’s 

southwestern border—across Route 1 from the unincorporated area locals refer to as 

the “Forgotten Mile,” the shopping center is owned by the Plaintiff Ocean Bay Mart, 

Inc., itself solely owned by Keith Monigle (together with Ocean Bay Mart, Inc., the 

“Plaintiff”). The Plaintiff intends to redevelop the property into 63 residences, 

organized as a condominium. In question is whether the Plaintiff developed vested 

rights to so redevelop before the Defendant City of Rehoboth Beach (the 

“Defendant” or the “City”) enacted a current ordinance which requires that such a 

development—with many detached homes—requires a sub-division of the property, 

a step the Plaintiff wishes to avoid. The Plaintiff seeks a declaration that its rights 

vested prior to the enactment of the new ordinance, or that the City must be equitably 

estopped from enforcing the ordinance against it.

The equitable question here is a familiar one. A developer submits a 

development plan for governmental review; during the pendency of the review, the 

governmental entity amends the law, and the new law renders the development plan 

non-compliant. Does the new law apply, or does the developer get the benefit of 

review under the law as it formerly existed? Here, the matter has been tried, and the 

trial record presents, to my view, a rather close equitable case regarding vested 

rights. It is clear that the Plaintiff and its principal expended funds and forwent 
2

income in the hopes of development under the old regime. It is also clear that 

Mr. Monigle was aware from the earliest planning stages that the City might prefer 

to impose a subdivision requirement on him, that he eschewed the chance to put 

tentative plans before the City to avoid “poking the beast,” and that he therefore 

relied on rather obscure assurances from City officials that he would be able to 

proceed without subdivision. The City’s code as it existed then was ambiguous as 

to whether subdivision was required; Mr. Monigle was clearly aware by the time the 

City’s Building Inspector rejected the Site Plan in 2015 that the City espoused the 

view that subdivision was required.

1

 City officials themselves were unclear and 

inconsistent in their interpretation of the code, making statements indicating that the 

project could proceed without subdivision. On balance, however, I find the Plaintiff 

did not reasonably rely on the prior City ordinances such that his rights became 

vested, and that equity requires neither a declaration to the contrary nor the 

application of estoppel against the Defendant. 

The facts as developed at trial, and my reasoning therefrom, follow.

1 The Board of Adjustment rejected the Building Inspector’s decision, finding the City code 

ambiguous. The City thereafter amended the code in an attempt to cure the ambiguity.
3

I. BACKGROUND2

For several years, Ocean Bay Mart, Inc., solely owned by Mr. Monigle, has 

sought to turn certain property in Rehoboth Beach into a condominium featuring 63 

units, consisting mostly of detached dwelling houses, a development Mr. Monigle 

denominated “Beachwalk.” The property consists of a single large lot of 7.71 acres, 

and at all times pertinent has been zoned C-1.3

 Lots zoned C-1, according to the 

City’s “Table of Use Regulations,” may be developed with single-family detached 

dwellings “[p]rovided that no more than one main building may be erected on a 

single lot.”4

 During preliminary planning stages, associates of the Plaintiff spoke 

with various officials from the City of Rehoboth Beach regarding land use planning 

and density regulations. After the Plaintiff submitted the Beachwalk Site Plan 

application (the “Site Plan” or “Beachwalk”) for approval, the City Building

Inspector for Rehoboth Beach issued a letter indicating that the Site Plan could not 

go forward as described, explaining that he viewed the Site Plan outlined as a 

2 Where the facts are drawn from exhibits jointly submitted at trial, they are referred to according 

to the numbers provided on the parties’ joint exhibit list and with page numbers derived from the 

stamp on each JX page (“JX _, at _”).

3 JX 13; JX 17. 

4 See Rehoboth Beach Code, Table of Use Regulations, at 1, 3 (2010); see also Rehoboth Beach 

Code § 270-10(C) (2015). The C-1 zoning code considers any use permitted in the R-2 District 

under Section 270-12(C) a use permitted as a matter of right. See Rehoboth Beach Code § 270-

13(C) (2015). The R-2 zoning code, for its part, considers any use permitted in the R-1 District 

under Section 270-11(c) a use permitted as a matter of right. See Rehoboth Beach Code § 270-

12(C) (2015). Finally, the R-1 zoning code incorporates all uses permitted under R-1(S) as a 

matter of right. See Rehoboth Beach Code § 270-11(C) (2015). The language at issue is drawn 

from the R-1(S) zoning code. Rehoboth Beach Code § 270-10(C) (2015). 
4

subdivision, and not a condominium, under the City’s Table of Use Regulations (the 

“Rehoboth Code” or the “Table of Use Regulations”). The Plaintiff appealed this 

finding to the Board of Adjustment for the Defendant, which determined that the 

City’s applicable Table of Use Regulations was ambiguous, and overturned the City

Building Inspector’s decision on that basis. In response, the City’s Planning 

Commission promptly changed the applicable law, enacting Ordinance No. 1116-01 

and Ordinance No. 1016-02 (together, the “2016 Ordinances”) presumably in an 

attempt to remove the ambiguity. Finally, in 2019, the Defendant’s Planning 

Commission adopted Ordinance No. 0519-01, which made the 2016 Ordinances 

retroactively applicable to the Site Plan (together with the 2016 Ordinances, the 

“Ordinance Amendment”). 

The Plaintiff argues that he has vested rights in the law as it existed prior to 

the Ordinance Amendment, because he had already begun the approval process and 

expended funds to further his vision. He further argues that the Defendant is 

equitably estopped from requiring submission of the Site Plan as adapted to 

contemplate a major subdivision designation. This post-trial Memorandum Opinion 

assesses the questions of whether vested rights exist and whether equitable estoppel 

applies and concludes that neither does. Applicable facts that guide my decision are 

outlined below. 
5

A. Factual Background

1. The Condominium Site Plan

Ocean Bay Mart is an existing shopping center in Rehoboth Beach seeking to 

reinvent itself as a residential development.5 After evaluating the options available, 

the Plaintiff decided to pursue a 63-unit development designated as condominiums, 

rather than as a major subdivision.6 Development as condominiums rather than as a 

subdivision would allow the Plaintiff to sidestep some of the more involved 

subdivision regulations.7 The Plaintiff then began developing the Site Plan, which 

ultimately was designed to include 58 single-family detached units and five singlefamily attached units.

8 The Plaintiff contracted with Pennoni Associates Inc. 

(“Pennoni”), an engineering firm, in 2012, to assist with the Site Plan.9

At the time the Plaintiff began work on the Site Plan, the City’s Table of Use 

Regulations stated that, in a commercial zoning area,10 single-family detached 

dwellings were a permitted use “[p]rovided that no more than one main building 

may be erected on a single lot.”11

5 JX 25, at 1–2.

6 JX 25, at 1–2. 

7 See Def.’s Opening Br. Supp. Its Mot. Summ. J. 5, Dkt. No. 40 [hereinafter “Def.’s MSJ Br.”]. 8 JX 23, at 2. 

9 JX 25, at 4. 

10 Commercial zoning, C-1, is the applicable zoning designation for Ocean Bay Mart. See City of 

Rehoboth Beach’s Post-Trial Br. 5, Dkt. No. 72 [hereinafter “Def.’s Post-Trial Br.”].

11 Rehoboth Beach Code § 270-10(C) (2015).
6

2. Interactions with the City of Rehoboth Beach

Prior to submitting the Site Plan for approval, the Plaintiff in a circuitous 

manner sought assurances from City officials through communications with third 

parties.12 In 2013, a real estate broker and personal friend of Mr. Monigle’s, Kathy 

Newcomb, directed certain questions regarding condominium projects, densities, 

and layouts to Terri Sullivan, the then-acting City Building Inspector, to which

Ms. Sullivan responded via email (the “August 26 email”).

13 Ms. Newcomb’s 

inquiry directly related to another, much smaller project of redevelopment in 

Rehoboth Beach.

14 Ms. Sullivan’s response generally indicated that condominium 

projects did not require sub-division.15

In June 2014, the Plaintiff’s attorney, Dennis Schrader, spoke with the City 

Solicitor, Glenn Mandalas, who confirmed that in general, a condominium plan is 

not a subdivision, and only requires site plan approval.16 Again, the specific 

Beachwalk project was not part of this discussion.

12 JX 25, at 3–4. 

13 See JX 01, JX 02. It appears that Ms. Sullivan and Ms. Newcomb exchanged at least one 

additional set of emails on the topic of Beachwalk. See JX 08. At that time, Ms. Sullivan indicated 

that the site plan review would be “the place to clarify whether these changes can occur.” This 

recommendation suggests that Ms. Sullivan sought to encourage the Plaintiff to reach out through 

formal City channels regarding the intended development, rather than through ad hoc email 

exchanges. Id. 

14 See JX 01. 15 See JX 02.

16 See JX 22; cf. JX 06 (a contemporaneous email sent by Mr. Schrader to the Plaintiff). There is 

no record of the phone conversation between Mr. Schrader and Mr. Mandalas, but in any event, 

Mr. Mandalas does not dispute Mr. Schrader’s recollection. See Pl.’s Post Trial Closing Statement 

Following Trial 3, Dkt. No. 73 [hereinafter “Pl.’s Post-Trial Br.”]. 
7

On strength of these two rather opaque communications, the Plaintiff decided 

to proceed with the Site Plan. Various communications between the Plaintiff and 

his professionals during this time reference avoiding designation as any sort of 

subdivision.17

The Site Plan was submitted in June 2015.18 A month later, David Mellen, 

the Chairman of Rehoboth Beach Planning Commission, reached out to the Plaintiff 

to inquire as to why the Plaintiff had not used the voluntary Project Concept Review 

process.19 Use of the Project Concept Review would have allowed the Plaintiff to 

communicate directly with the Defendant regarding the proposed Site Plan before

committing “substantial time and expense” to the preparation of a formal Site Plan.

20

The Plaintiff commented in an email to his associates that the process was one where 

“the perspective [sic] applicant lays out his cards and the town then has the 

opportunity adjust [sic] the code!”21

3. The Site Plan Application on Review

From July until November 2015, the City Building Inspector (originally 

Ms. Sullivan, and later Damalier J. Molina) and Pennoni traded correspondence 

pertaining to a number of flaws in the Site Plan that needed to be addressed before 

17 See, e.g., JX 07, at 1–2; JX 04; JX 05. 18 See JX 09. 

19 JX 10. 

20 See Rehoboth Beach Code § 236-31(A) (2015). 21 JX 10.
8

the City’s Planning Commission could move forward.22 This correspondence does 

not indicate that the Site Plan was improper because subdivision was required.23 On 

November 20, 2015, however, the City Building Inspector provided notice (the 

“2015 Letter”) that the proposed Site Plan would need to be carried out as a 

subdivision rather than as a condominium.24

The Plaintiff appealed the 2015 Letter to the Board of Adjustment for the 

Defendant, arguing that the language of the City’s Table of Use Regulations was 

ambiguous.25 The Board of Adjustment agreed and overturned the decision of the 

City Building Inspector in May 2016.

26

On October 21, 2016, the Planning Commission unanimously voted that the

Site Plan should be assessed as a major subdivision.27 On the same day, the Planning 

Commission voted to adopt Ordinance 1016-02, which requires that the primary 

entrance to any one- or two-family dwelling be located within 100 feet of a public 

street.28

On November 18, 2016, the Planning Commission adopted Ordinance 

No. 1116-06, amending Chapter 270 of the Rehoboth Code to clarify that no more 

22 JX 12; JX 13; JX 14; JX 16; JX 17. 

23 See JX 16.

24 Transmittal Aff. of Max B. Walton, Esq., Ex. K, Dkt. No. 41 [hereinafter “Walton Aff.”]. 25 See JX 19, at 2. 

26 See id. at 3–4. 

27 See Walton Aff., Ex. B. 

28 See id. at Exs. B and D. 
9

than one single-family detached dwelling may be constructed on a lot in all zoning 

districts.29

The express language of each of the 2016 Ordinances states that “the City’s 

Building and Licensing Department shall thereafter reject any new application” not 

in compliance with the ordinance.30 Neither of the 2016 Ordinances provides any 

affirmative language “grandfathering in” applications already being processed.31

In December 2016, the Plaintiff informed the Planning Commission that it had 

no intention of filing as a major subdivision and would prefer to proceed with Site 

Plan review.32 In response, the Planning Commission adopted a motion to reject the 

Site Plan unless the Plaintiff submitted a subdivision plan by March 14, 2017.33 The 

Plaintiff appealed this decision to the City Commissioners, who upheld the Planning 

Commission in January 2018.34

The Plaintiff appealed to the Delaware Superior Court in February 2018.35

The Delaware Superior Court reversed the City Commissioners and remanded the 

matter to the City, holding that the court could not “now determine whether 

29 See id. at Exs. A and C. 

30 See id. at Exs. C and D (emphasis added).

31 Id. 

32 See id. at Ex. Y. 

33 See Pl.’s Opening Br. Supp. Mot. Summ. J., Ex. Q, Dkt. No. 36 [hereinafter “Pl.’s MSJ Br.”]. 34 See id. at Ex. R.

35 See Pet. Writ Cert., Ocean Bay Mart, Inc. v. City of Rehoboth Beach, 2019 WL 112635 (Del. 

Super. Mar. 12, 2019) (C.A. No. S18A-02-001 THG). 
10

Ordinance 1116-01 applies to ‘Beach Walk,’ reasoning that this issue should, in the 

first instance, be presented to and decided by the appropriate City officials.”36

In May 2019, the Planning Commission adopted Ordinance No. 0519-01, 

which expressly requires that any applications that were submitted and pending for 

major subdivisions, minor subdivisions, site plan approval, partitioning or any other 

division of land as of the time of adoption of the 2016 Ordinances that had not been 

finally approved as of April 1, 2019 must comply with all requirements of the 2016 

Ordinances prior to obtaining final approval.

37 Thus, for the Site Plan to be 

approved, the Site Plan must comply with the Ordinance Amendment. 

B. Procedural History

The Plaintiff filed a Complaint in this Court on June 18, 2019 containing three 

counts: a claim of vested rights, a claim for declaratory judgment permitting the 

Plaintiff to proceed with the Site Plan free of the effect of any ordinances adopted 

after June 18, 2015, and a claim of equitable estoppel.38 In September 2019, I denied 

a Motion to Intervene by certain third parties for failure to demonstrate a legally 

cognizable interest in the application of the 2016 Ordinances to the Plaintiff’s 

property.39 Discovery then proceeded. Both parties moved for summary 

36 Ocean Bay Mart, Inc. v. City of Rehoboth Beach, 2019 WL 1126351, at *2 (Del. Super. Mar. 

12, 2019). 

37 See Walton Aff., Ex. I.

38 Compl. Ocean Bay Mart, Inc. Equitable and Declaratory Relief, Dkt. No. 1. 

39 See, e.g., Letter Op. and Order, Dkt. No. 23. 
11

judgment.40 I denied each on the basis that the factual issue of good faith reliance 

was best resolved through development of a record at trial.41

I held trial in this matter on July 23, 2021, and counsel for the Plaintiff and 

the Defendant submitted post-trial closing statements to me on September 1, 2021.42

I considered the matter fully submitted at that time. 

II. THE EVOLUTION OF THE VESTED RIGHTS DOCTRINE IN 

DELAWARE 

A. The Permit-Plus Test

The history of the vested rights doctrine’s application in Delaware is tangled, 

due in part to modifications to the test used to assess a claim of vested rights.43 The 

Delaware Supreme Court adopted the “permit-plus” rule in Shellburne, Inc. v. 

Roberts, requiring that any claimant both hold a valid building permit issued prior 

to a zoning change as well as prove a “substantial change in position, expenditures, 

or incurrence of obligations, made lawfully and in good faith under the permit” in 

order to perfect vested rights.44

40 See Pl. Ocean Bay Mart’s Mot. Summ. J., Dkt. No. 36; Def. City of Rehoboth Beach’s Mot.

Summ. J., Dkt. No. 40. 

41 See Letter Op., Dkt. No. 56. 

42 See Tr. of 7.23.21 Trial, Dkt. No. 66 [hereinafter “Trial Tr.”]; Def.’s Post-Trial Br.; Pl.’s PostTrial Br.

43 See Acierno v. Cloutier, 40 F.3d 597, 619–20 (3d Cir. 1994) (“What the above discussion 

concerning the district court’s decision and the defendants’ arguments on appeal demonstrates to 

us is that the vested rights law of both New Castle County and the State of Delaware at the time 

the County Council enacted Ordinance 91-190 was subject to considerable uncertainty and 

differing interpretations.”). 

44 224 A.2d 250, 281–83 (Del. 1966).
12

The “permit-plus” view prevailed for a number of years;45 however, the factspecific nature of the doctrine eventually led to a modification of the bright-line test. 

In New Castle County v. Mitchell, this Court assessed a claim of vested rights, 

purportedly under the “permit-plus” rule.46 The analysis in Mitchell also included, 

among other things, three “considerations” the Court looked into when balancing the 

equities, each of which pertained to notice or the defendants’ ability to foresee the 

change in zoning.47 This emphasis on notice suggested a shift away from the pure 

permit-plus-substantial change position identified in Shellburne. 

The evolution continued in Wilmington Materials, Inc. v. Town of 

Middletown.48 The Court applied the “permit-plus” test to a claim of vested rights, 

but also indicated that it believed conduct of town officials induced substantial 

reliance (rather than merely a change in position, expenditures or incurrence of 

obligations).49 Additionally, Wilmington Materials discussed the town’s motivation 

for adopting the amendment at issue, questioning whether the changes were a valid

45 See, e.g., Raley v. Stango, 1988 WL 81162 (Del. Ch. Jul. 28, 1988); New Castle Cty. v. Mitchell, 

1981 WL 15144 (Del. Ch. Nov. 25, 1981); Wilmington Materials, Inc. v. Town of Middletown, 

1988 WL 135507 (Del. Ch. Dec. 16, 1988); E. Shore Envtl., Inc. v. Kent Cty. Dep’t of Planning, 

2002 WL 244960, at *3 n.4 (Del. Ch. Feb. 1, 2002); Miller v. Bd. of Adjustment, 521 A.2d 642 

(Del. Super. 1986). 46 Mitchell, 1981 WL 15144. 

47 Id. at *6 (“. . . (4) defendants had no knowledge or reason to know of the proposed zoning 

change, (5) there was no reason for defendants to suspect that the [permits] would not be 

granted . . . (7) there was no testimony of any substantial change . . . which would have put 

defendants on notice . . . .”).

48 Wilmington Materials, 1988 WL 135507. 

49 Id. at *8 (“Clearly the Town, acting through its officials, engaged in conduct that it knew or 

should have known would (and, in fact, did) induce substantial reliance by WMI.”). 
13

exercise of “police power” or whether the changes were targeted to prevent an 

otherwise lawful use of the land.50 Thus, the universe of applicable fact 

considerations when faced with a vested rights claim in equity expanded.

B. The Multi-Factor Good Faith Reliance Test

The Delaware Supreme Court brought clarity to the vested rights doctrine in 

the 2002 case In re 244.5 Acres of Land, in which the Court stated that it did not 

“read Shellburne as promulgating a ‘permit plus’ standard which controls the issue 

of good faith reliance in all situations, such as are present here, where the permitting 

process is complex and multi-leveled.”51 Instead, the Court put forth a new test, 

which weighs “‘such factors as the nature, extent and degree of the public interest to 

be served by the ordinance amendment on the one hand and, on the other hand, the 

nature, extent and degree of the developer’s reliance on the state of the ordinance 

under which he has proceeded . . . .’”52 “In the final analysis, good faith reliance on 

existing standards is the test.”53 Under this test, the issuance or non-issuance of a 

permit (as here) is a consideration, but is not case-dispositive.54

50 Id. at *9. 

51 808 A.2d 753, 757 (Del. 2002). 

52 Id. at 757–58 (quoting Urban Farms, Inc. v. Borough of Franklin Lanes, 431 A.2d 163,172 (N.J. 

1981)). 

53 Id. at 758. 

54 Id. 
14

In 2006, the defendants in Salem Church (Delaware) Associates v. New Castle 

County proposed adding a new element to the mix: timeliness.55 The Salem Church 

Court applied In re 244.5 Acres, assessing the public interest to be served by the 

ordinance amendment and the private interest of the plaintiff (as evidenced by 

expenditures and statements by county officials), finding that, on a motion to 

dismiss, the plaintiff’s vested rights claim did not fail as a matter of law.56 The 

defendants asserted that the plaintiff’s claim must fail due to delay.57 In considering

this argument, the Court of Chancery stated that delay could defeat a vested rights 

claim, relying on language from In re 244.5 Acres; however, this statement is dicta, 

as the Court determined that a more fact-intensive inquiry would be necessary to 

determine whether delay defeated any vested rights from attaching.58

In re Kent County Adequate Public Facilities Ordinances Litigation followed 

In re 244.5 Acres and ultimately denied vested rights to the claimant.59 To reach 

this conclusion, the Court of Chancery assessed the following: the developer’s 

progress in obtaining essential approvals; costs incurred;60 the public interest 

55 2006 WL 2873745 (Del. Ch. Oct. 6, 2006).

56 Id. at *11. 

57 Id. 

58 Id. at *12; see, e.g., In re MFW S’holders Litig., 67 A.3d 496, 521 (Del. Ch. 2013) (discussing 

judicial statements on issues that are not outcome-determinative as dicta). 59 2009 WL 445386 (Del. Ch. Feb. 11, 2009), rev’d sub nom. on other grounds, Chase Alexa, LLC 

v. Kent Cty. Levy Court, 992 A.2d 1148 (Del. 2010). 60 Although not expressly stated, the In re Kent County court appears to have considered obtaining 

approvals and expenditures as evidence of “nature, extent and degree of the developer’s reliance 

on the state of the ordinance under which he has proceeded.” In re 244.5 Acres, 808 2.Ad at 757–
15

advanced by the ordinance amendment; and good faith reliance.61 The good faith 

reliance analysis included both consideration of notice to the claimants as well as

statements made by government officials.62 Here, the good faith reliance analysis 

appears to have been carried out as its own separate prong, rather than as an 

overarching principle applied to the factors to be weighed. 

C. Town of Cheswold

Town of Cheswold v. Central Delaware Business Park is the latest word in 

Delaware vested rights jurisprudence, but again, expounds on the existing test via 

dicta.63 Town of Cheswold addressed the question of whether prior stipulated orders 

in litigation proceedings prohibited a town from rezoning property; the Court 

concluded that the town was permitted to carry out rezoning.64 In closing, the 

Delaware Supreme Court reiterated the In re 244.5 Acres balancing test should be 

applied if the business park raised a vested rights claim, but the Court’s description 

expands the precedent to include delay as a third, formal factor: 

The court should consider, among other factors it sees as important, 

“the nature, extent and degree of the public interest to be served by 

the ordinance amendment,” “the nature, extent and degree of the 

developer’s reliance on the state of the ordinance under which he 

has proceeded”—i.e., the developer’s “good faith reliance on 

58; see In re Kent Cty., 2009 WL 445386 at *3 (discussing the consideration of expenditures and 

building permits in In re 244.5 Acres). 

61 In re Kent Cty., 2009 WL 445386 at *3–8. 

62 Id. at *5–8.

63 Town of Cheswold v. Cent. Del. Bus. Park, 188 A.3d 810 (Del. 2018). 

64 See generally id. 
16

existing standards,”—and “the effect of the pace of the development 

effort” because “delay may defeat a vested rights claim.”65

The Delaware Supreme Court also, in a footnote, identified additional factors that 

might be assessed: 

Other factors a court may consider include: the ordinance’s effects 

on public health and welfare—including safety, education, 

transportation, medical services, utilities, and environmental 

concerns; whether the developer incurred major expense or made 

material progress toward obtaining approval before the ordinance’s 

enactment; any actions or statements made by municipality officials 

that the developer reasonably and substantially relied on; and 

whether the developer was on notice or had reason to anticipate the 

ordinance’s enactment prior to incurring expenses on the project.66

While these factors are consistent with the factual scenarios explored in the caselaw 

above, this is the first formal recognition of these fact patterns as express factors to 

be considered.

In the final analysis, I conclude, where a municipal ordinance has changed 

while a property-use application is pending, the law simply requires an equitable 

balancing. The primary focus is the reason the ordinance has been amended, 

balanced against the reasonable reliance costs to the property owner. Without 

fetishizing the factors referred to in the case law as a “test,” the various factors laid 

65 Id. at 821–22 (first quoting In re 244.5 Acres, 808 A.2d at 757–58; then quoting Salem Church, 

2006 WL 2873745, at *12).

66 Town of Cheswold, 188 A.3d at 822 n.62 (first citing In re Kent Cty., 2009 WL 445386, at *4; 

then citing Salem Church, 2006 WL 2873745, at *10; then citing Lynch v. City of Rehoboth Beach, 

2005 WL 1074341, at *2 (Del. Ch. Apr. 21, 2005); and then citing 4 Rathkopf’s The Law of Zoning 

and Planning § 70:26 (4th ed. 2018)).
17

out above, culminating in Town of Cheswold, identify matters helpful to that 

balancing analysis.

III. ANALYSIS

In order to determine whether the Plaintiff has obtained vested rights in his 

condominium plans, I apply the two-part test from In re 244.5 Acres, which inquires 

as to (1) the nature, extent, and degree of the public interest to be served by the 

ordinance amendment and (2) the nature, extent, and degree of the developer’s 

reliance on the state of the ordinance under which he has proceeded, and assesses 

the developer’s good faith reliance on existing standards as the final analysis.

67 In 

conducting this analysis, I consider certain of the factors the Delaware Supreme 

Court identified as applicable to the balancing analysis in Town of Cheswold, to the 

extent I find them applicable.

68 I note that the record does not demonstrate delay on 

the part of the Plaintiff such that a vested rights claim, otherwise viable, would be 

defeated.

After addressing vested rights, I also briefly address the Plaintiff’s claim of

equitable estoppel. 

67 In re 244.5 Acres, 808 A.2d, at 757–58. 

68 Town of Cheswold, 188 A.3d at 822 n.62 (first citing In re Kent Cty., 2009 WL 445386, at *4; 

then citing Salem Church, 2006 WL 2873745, at *10; then citing Lynch, 2005 WL 1074341, at *2; 

and then citing 4 Rathkopf’s The Law of Zoning and Planning § 70:26 (4th ed. 2018)).
18

A. The Plaintiff has not secured vested rights.

As this Court has noted previously, there is no bright line test or objective 

formula for determining whether vested rights have attached.69 Thus, the question 

is not merely whether more factors militate for the Plaintiff over the Defendant; 

rather, I must conduct an equitable balancing under the record before me.

70

1. Public Interest in the Ordinance Amendment

The first prong of the In re 244.5 Acres test directs me to inquire into the 

public interest behind enacting the Ordinance Amendment.71

There are two 2016 Ordinances.72 The first, Ordinance 1016-02, requires that 

the primary entrance to any one- or two-family dwelling be located within 100 feet 

of a public street.73 The notice adopting Ordinance 1016-02 discusses the State of 

Delaware’s Fire Prevention Regulations and their identified standards for access to 

all types of buildings, including residential buildings, and indicates that this 

ordinance is the best way to ensure emergency services can adequately access all 

residential dwelling units. 74

69 See In re Kent Cty., 2009 WL 445386, at *4. 

70 See, e.g., id. at *8 (discussing the “required balancing” and “greater emphasis” to be placed upon 

certain factors in assessing good faith reliance). 

71 In re 244.5 Acres, 808 A.2d at 757. 

72 The 2019 Ordinance clarifies that the 2016 Ordinances apply to Beachwalk. I need not decide 

whether those Ordinances, as enacted, so applied, since I find no reasonable reliance on the pre2016 Code by the Plaintiff, in any event. 

73 See Walton Aff., at Ex. D.

74 See id.
19

Ordinance 1116-01 adds a new section to the Rehoboth Code to prevent more 

than one single-family detached dwelling from being constructed upon any 

commercially zoned lot.75 Ordinance 1116-01 specifically states that its intent is “to 

affirm the Building Official’s interpretation of the referenced code provision” (that 

is, that erection of multiple detached homes on a single lot requires sub-division)

and to remove any uncertainty in the Code’s application.76

The public interest behind Ordinance 1116-01 is an administrative interest in 

clarity in the Rehoboth Code. A further interest, I presume, is strengthening the 

City’s control over use of property in the C-1 zone, including regarding residential 

density.

77 The public interest driving Ordinance 1016-02 is more compelling. It 

requires proximity to public streets to provide access for fire and emergency 

vehicles, and is thus predicated on public health and safety. Both of the 2016 

Ordinances represent an exercise of the City’s police powers, in the public interest.78 

Therefore, I find that this factor weighs in favor of the Defendant. 

2. Developer’s Reliance on the Prior Ordinance

The real gravamen of the issue here is the extent of the Plaintiff’s reliance on 

existing law, and the reasonableness of that reliance under the circumstances. 

75 See id. at Ex. C.

76 See id.

77 It appears that if the Ocean Bay Mart property is subdivided, fewer detached homes will be 

permitted than called for in the Site Plan. See JX 19.

78 See Wilmington Materials, Inc., 1988 WL 135507. 
20

Assessing the nature, extent, and degree of the developer’s reliance on the prior 

ordinance is critical to resolving the question of whether vested rights exist, as the 

In re 244.5 Acres Court identified when it stated that good faith reliance on the 

existing standards was the “final analysis.”79

A close reading of a recent Delaware vested rights case, In re Kent County,

illuminates the proper way to evaluate this factor.80 In that case, a developer had 

purchased land to construct a residential community, engaging engineers, pursuing 

preliminary land use approvals with the government, and incurring material 

expenses.81 Approximately six months into this planning process, the developer 

discovered that the applicable ordinance permitting the development might be 

amended.82 Despite this, the developer continued to pursue its project; during this 

time, certain government officials made statements indicating that the developer’s 

project, along with others in the application “pipeline,” would be grandfathered.83

After the adoption of the new ordinance, the project was in fact not grandfathered, 

and the developer asserted a claim of vested rights, which the Kent County Court

denied.84 In making this determination, the Court applied the In re 244.5 Acres test, 

79 In re 244.5 Acres, 808 A.2d at 758.

80 See generally In re Kent Cty., 2009 WL 445386.

81 Id. at *1.

82 Id. 

83 Id. 

84 Id. at *7–8. 
21

evaluating good faith reliance by the developer by questioning first whether there 

was in fact reliance and then whether such reliance was reasonable.

85

A number of circumstances must be considered to determine whether the 

Plaintiff reasonably relied on existing Rehoboth Code standards in 2015. 

a. The Plaintiff’s Knowledge of the Rehoboth Code

The Plaintiff purports to have relied on the Rehoboth Code as it existed at the 

time it submitted its Site Plan, together with statements made by City officials.86 It 

cites, however, to no section of the Rehoboth Code explicitly permitting a 

condominium development in contradiction to the permitted uses of property 

otherwise provided in the Rehoboth Code. Unlike more typical vested rights cases, 

this is not situation where the law ante clearly permitted a use, later prohibited by 

new legislation. Here, the applicable provision is the Defendant’s Table of Use 

Regulations as of 2015, and the underlying sections of the Rehoboth Code providing 

“uses of right” for zone C-1, which state that single-family detached dwellings were 

a permitted use of a commercially zoned lot “[p]rovided that no more than one main 

building may be erected on a single lot.”87 This language does not support the view 

85 Id. at *5–8 (“[The developer] identifies four discrete events which, in its view, demonstrate both 

its reliance on the pre-APFO standards of subdivision regulation and the reasonableness of that 

reliance.”). 

86 “[A]t the time Ocean Bay Mart filed its Site Plan, it had not only read the City Code, but it had 

confirmed with the City Building Inspector and the City Solicitor that its reading of the Code was 

correct.” Pl.’s Post-Trial Br. 3.

87 Rehoboth Beach Code § 270-10(C) (2015).
22

that no subdivision was required. Mr. Monigle testified at trial that he had never 

read this language prior to 2015, and thus had no reason to rely on any particular 

interpretation of the Code at the time the Site Plan was submitted, outside of the 

statements of City personnel.

88

b. Research into the Rehoboth Code by the Plaintiff’s 

Associates

The Plaintiff, who did not have experience in real estate development, and 

who faced a sizable investment in redeveloping the Ocean Bay Mart property, turned 

to others to assist.

89 Among these were Mr. Schrader, the Plaintiff’s attorney, and 

Ms. Newcomb, a friend who is also a real estate broker.90 As outlined above, both 

Mr. Schrader and Ms. Newcomb engaged in conversations with City officials 

regarding Beachwalk. 

Mr. Schrader confirmed with the City Solicitor that a condominium is not a 

subdivision, and is assessed under different standards for purposes of Planning 

Commission review.

91 This general confirmation was surely of interest and 

encouragement to the Plaintiff, but it is insufficient, in my view, to provide a basis 

for reasonable reliance that the Site Plan, in particular, would constitute a 

88 See Trial Tr., 39–44.

89 See, e.g., id. at 54:20–22 (discussing hiring Mr. Schrader); id. at 11 (discussing the help of 

Ms. Newcomb, the realtor, who appears to have assisted as a personal friend of Mr. Monigle’s).

90 Id. 

91 See JX 22.
23

condominium rather than a subdivision.92 The Plaintiff notes that other 

condominium developments had been permitted in the City apparently without 

requiring a subdivision even where the condominium developments led to a higher 

density than that proposed by the Beachwalk Site Plan.

93 The Plaintiff did not offer 

evidence regarding the state of the Rehoboth Code when these condominiums were 

developed, however, nor explain why deviation from the “one main building” per 

lot standard was permitted.

94

Likewise, Ms. Newcomb’s discussion with the then-acting City Building 

Inspector, Ms. Sullivan, and Ms. Sullivan’s August 26 email in response, support 

the Plaintiff’s position that it understood no subdivision would be required. Neither 

discussion nor email referenced the Beachwalk project at all, however, and the 

project they did concern was of a different scale and planning zone.95 Like the 

conversation between Plaintiff’s counsel and the City Solicitor, the August 26 email 

can be rightfully seen as encouraging to Plaintiff’s hopes to avoid subdivision, but 

does not in itself justify a finding of reasonable reliance. This is particularly so in 

92 In the course of researching and planning the Beachwalk redevelopment, one of the Plaintiff’s 

own attorneys, Michael Smith, indicated that he believed Beachwalk would require the submission 

of a subdivision plan. See JX 03. In conjunction with the Plaintiff’s admitted lack of knowledge 

of the Rehoboth Code, this belief by one of its agents weakens any reliance value that the Plaintiff 

attributed to Mr. Schrader’s conversation with the City Solicitor. Mr. Monigle testified at trial that 

Mr. Smith later changed his mind regarding whether a subdivision would be required, but did not 

proffer further evidence on this point. See Trial Tr. 51:21–22. 

93 Pl.’s Post-Trial Br., 4 n.5.

94 Def.’s Post-Trial Br., 5 n.6.

95 JX 02.
24

light of the Rehoboth Code language allowing no more than one detached residence 

“main building” on a single lot; Beachwalk, as conceived in the Site Plan, called for 

more than sixty such homes. Again, Mr. Monigle had not read the Code, but he is 

charged with knowledge of it for purpose of determining reasonable reliance. Ms. 

Sullivan’s email was not an official, or even an unofficial, approval of Beachwalk

itself; in fact, Sullivan never purported to approve the Site Plan, although she also 

did not suggest that it required subdivision.

96 The August 26 email might have been 

of some preliminary reliance value to the Plaintiff, but in context of the further 

Beachwalk-specific review to come, the Plaintiff could not reasonably rely on the 

August 26 email as a full and final statement of the law. Indeed, as discussed below, 

the new City Building Inspector, upon review of the actual Site Plan, opined in 

November 2015 that Beachwalk required a subdivision under existing law.

c. The Plaintiff’s Later Arguments That the Rehoboth Code Is 

Ambiguous

The Plaintiff promptly appealed the City Building Inspector’s adverse 

ruling—that subdivision was required under the Code and its Table of Use 

Regulations—to the City Board of Adjustment. The nature of the appeal I find

pertinent to the reasonable reliance analysis. The City Building Inspector had 

rejected the Site Plan on the ground that it provided for “more than” one main 

96 See JX 11. 
25

building on the Plaintiff’s lot—in fact, there were dozens—and thus was inconsistent 

with the Code, absent subdivision.97 In the appeal, the Plaintiff’s attorney argued 

that the Table of Use Regulations was ambiguous, and could be read to support 

condominium development without subdivision.

98 That argument was successful, 

and the Board of Adjustment overturned the City Building Inspector’s determination

on grounds of ambiguity.

99

I note that zoning restrictions limit full use of real property, in derogation of 

the common law, and that as a result ambiguity is resolved in favor of the property 

owner.100 The Plaintiff argued successfully before the Board of Adjustment that the 

Table of Use Regulations was ambiguous, and thus established that the Site Plan was 

in compliance with the then-ordinances, once the ambiguity was resolved in its 

favor. The issue here, however, is quite different. Having made the ambiguity 

argument, the Plaintiff was on notice that the City may have intended the more 

restrictive interpretation, and thus might clarify the law to accomplish that intent (as, 

in fact, it did). In other words, the Plaintiff is in the uncomfortable position of asking 

this Court to find that it reasonably relied on the fixed nature of an ordinance that it 

97 See Walton Aff., Ex. K. 

98 See JX 20, at 27:5–20. 

99 See generally JX 20.

100 See Carl M. Freeman Assocs., Inc. v. Green, 447 A.2d 1179, 1182 (Del. 1982) (citation omitted) 

(“Because zoning ordinances are in derogation of common law property rights, [there must be] 

strict compliance with the [legislated] procedures.”); Dewey Beach Enters., Inc. v. Bd. of 

Adjustment, 1 A.3d 305, 310 (Del. 2010). 
26

has acknowledged was ambiguous, and which it knew the City construed as 

requiring subdivision.

The Board of Adjustment appeal was important for another reason. It 

commenced a season of litigation in which the City made clear its intention that 

subdivision would be required for the Plaintiff’s redevelopment.101

d. Statements Made by Municipal Officers 

The Plaintiff puts forth as further support for his position a number of 

statements made by municipal officers indicating that the Ordinance Amendment 

would not apply to the Site Plan. 

First, the Plaintiff points to a local newspaper story that included comments 

from the City Mayor indicating that the 2016 Ordinances would not apply to the 

Beachwalk project.102 Additionally, the Plaintiff refers to certain comments made 

during a public workshop for the 2016 Ordinances, wherein one of the City 

Commissioners and the Mayor engaged in commentary as to whether the 2016 

Ordinances would apply to Beachwalk, ultimately suggesting that because the Site 

Plan application was already before the City Building Inspector that the 2016 

101 For instance, the City has at various times relied, unsuccessfully, on a State statute, the 

Delaware Uniform Common Interest Ownership Act, to argue that detached houses as part of a 

condominium development constitute separate parcels of real estate. See 25 Del. C. § 81-105(b)(1)

(2009). 102 Pl.’s MSJ Br., Ex. X, at 2 (“[Mayor] Cooper said the proposed changes will not apply to the 

Beach Walk project because it would be considered grandfathered.”).
27

Ordinances would not apply.103 The City Solicitor at the same workshop indicated 

that the 2016 Ordinances were to be prospective in nature.104

In a further City Commissioners’ meeting on September 16, 2016, the City 

Solicitor made a number of related statements while discussing whether the 2016 

Ordinances would apply to Beachwalk, explaining that Beachwalk could proceed on 

theories of vested rights or equitable estoppel to attempt to avoid the effect of the 

2016 Ordinances.105 He stated that, while he had not yet considered whether either 

doctrine could apply in full, “because [the Plaintiff is] already in the pipeline, this 

ordinance would probably not be applicable to them. Again, I haven’t done the full 

analysis.”106 The City Solicitor went on to say that he didn’t “think [the 2016 

Ordinances did] anything to the [Beachwalk] application that’s pending, unless 

there’s a reason to hold that application.”107

Despite these statements, in May 2019 the Defendant adopted an ordinance 

that directly applied the 2016 Ordinances to any pending applications, including 

Beachwalk.108

103 See Pl.’s MSJ Br., Ex. Y. 

104 I note that the evidence supporting these statements is excerpted in nature, meaning that I am 

without the benefit of context to review these statements. See id.

105 See generally Walton Aff., Ex. T.

106 See id. at 44:22–23. 

107 Id. at 45:22–23. 

108 See id. at Ex. I. 
28

In these circumstances, could the Plaintiff reasonably rely upon these 

municipal officers’ statements to perfect a claim of vested rights? I find that it could 

not. In In re Kent County, the Court of Chancery indicated that a statement by the 

President of the Levy Court could not bind “his fellow members,” as he is but a 

single member.109 This Court indicated that “[the Plaintiff], understandably, may 

have taken heart from the President’s comments; substantial reliance was not, 

however, justified.”110 Similarly, a single Commissioner’s statements at a public 

workshop cannot bind the City’s Planning Commission in its entirety, nor can the 

commentary of the Mayor or the City Solicitor. Additionally, the City Solicitor was 

careful to qualify his statements at the September 2016 workshop, noting that he had 

not performed the full analysis to conclude as to whether the 2016 Ordinances would 

have retroactive effect.111 It would therefore not be reasonable for the Plaintiff to 

substantially rely upon these statements. Statements of the Mayor, reproduced in a 

city newspaper, likewise cannot bind the City’s Planning Commission and are not a 

suitable basis for substantial reliance. 

e. The Plaintiff’s Election to Forego Project Concept Review

The Plaintiff chose not to participate in the Project Concept Review process 

offered by the Defendant, which would have afforded an opportunity to discuss and 

109 In re Kent Cty., 2009 WL 445386.

110 Id. 

111 See Walton Aff., Ex. T, 44:22–23, 45:22–23.
29

design the Site Plan in close contact with the City.112 Project Concept Review is 

voluntary, not mandatory,113 and the Plaintiff was not required to participate. Had 

the Plaintiff done so, and had the City agreed to the Site Plan under the process, that 

would support the Plaintiffs reasonable reliance argument.

114 Conversely, since the 

Plaintiff chose not to undertake Project Concept Review, this cannot bolster its 

reliance argument. In fact, the Plaintiff’s reason for eschewing review is telling; 

Mr. Monigle wished to avoid bringing attention to the subdivision issue out of fear 

that the City might amend its law in a way adverse to his interest.

115 The Plaintiff 

wrote in a 2015 email that he had received an inquiry as to why Ocean Bay Mart 

hadn’t taken advantage of the Project Concept Review, and described his wish to 

avoid a process which might cause the City to “adjust the [Rehoboth] Code!”116 This 

may (or may not) reflect prudence, but is incompatible with reasonable reliance on

the pre-2016 Code. 

* * *

112 See Pl.’s MSJ Br., Ex. H (“[Y]ou decided to waive your rights to a Planning Commission 

concept review as permitted under city code Section 236-31 Project concept review. This would 

have been an opportunity to review the potential development before committing substantial time 

and expense in the preparation of the site plan . . . .”).

113 See id. (referring to the Plaintiff’s “right[]” to engage with the project concept review process).

114 In re Kent Cty., 2009 WL 445386, at *4 (mentioning concept plan approval as part of the 

developer’s progress along the “regulatory pathway”).

115 See supra notes 19–21 and accompanying text. 

116 See JX 10. 
30

In sum, I cannot find that the Plaintiff reasonably relied upon the language of 

the Rehoboth Code as it existed in 2015. It is true that the Plaintiff here has hired 

engineers and consultants117 and has expended a substantial sum of money pursuing 

this development, hoping to proceed without subdivision. Prior to the 2016 

Ordinances, the Plaintiff avers it had invested over $576,000 in costs, expenses, and 

lost rent in pursuing Beachwalk.118 Of course, this does not demonstrate a loss to 

the Plaintiff of that amount. Assuming that the Plaintiff goes forward with a 

subdivision, the record is barren of what amount of the sums already expended will 

be applicable to the project. Nonetheless, the Plaintiff has made a significant and 

material investment here. Because I find that Mr. Monigle cannot reasonably have 

relied on the continued applicability of the ambiguous language of the Rehoboth

Code to his project, the out-of-pocket costs and forgone rent hold little equitable 

suasion. 

The Plaintiff’s lack of knowledge regarding the Rehoboth Code and later 

arguments that the Rehoboth Code itself is ambiguous regarding its project preclude 

me from finding that the Plaintiff’s reliance was reasonable. The fact that the 

Plaintiff’s associates engaged in nonspecific research with various city officials and 

117 See supra note 9 and accompanying text. 

118 See Pl.’s Post-Trial Br., at 15 n.12. With respect to lost rent, Mr. Monigle testified that he lost 

tenants as a result of his decision to offer only short-term leases, to facilitate redevelopment. See 

Trial Tr., 27:3–24, 28:1–13. 
31

that certain municipal officers made nonbinding statements indicating that no 

subdivision would be required, or that the 2016 Ordinances would not apply, I find 

insufficient in equity to support a finding of vested rights. The record reflects that 

the Plaintiff was well aware, by the time of the City Building Inspector’s decision in 

November 2015, that the City understood the Rehoboth Code to require subdivision. 

Having successfully argued that the Rehoboth Code was ambiguous in appeal of that 

decision, it was aware of the potential that the City would look to eliminate that

ambiguity.

119 As early as July 7, 2015, Mr. Monigle had written in an email that he 

had received an inquiry as to why Ocean Bay Mart had not taken advantage of the 

optional Project Concept Review, and described the process as giving the City the 

chance to “adjust the [Rehoboth] Code!”120 Acknowledgement that the City might 

have a motive to change the Rehoboth Code constitutes reason to anticipate the 2016 

Ordinances and their eventual application to Beachwalk. 

Under all these circumstances, the Plaintiff’s reliance on the legal status 

quo was not reasonable, and equity will not impose relief under the doctrine of vested 

rights.

119 See Trial Tr., 39–44. 

120 See JX 10. 
32

B. The Defendant is not equitably estopped from requiring a major 

subdivision plan. 

The doctrine of equitable estoppel can be used to prevent a municipal 

government from exercising its zoning powers where “‘a landowner [is] induced to 

expend substantial sums in reasonable, good faith reliance upon governmental 

assurances (or equivalent conduct) that the landowner’s intended use of the property 

is permitted under the zoning code.’”121

Equitable estoppel and vested rights doctrines are “theoretically distinct,” but 

generally “reach the same results in similar factual situations.”122 So it is here. As 

delineated above, the Plaintiff has not made a showing of reasonable, good faith 

reliance upon governmental assurances, as it was not reasonable for the Plaintiff to 

rely upon the Mayor’s and the Commissioners’ informal statements as to whether 

Beachwalk would be grandfathered and thus exempt from the application of the 2016 

Ordinances. By contrast, the Plaintiff should have been (and was) on notice that the 

City might seek to change the Table of Regulations via the Ordinance Amendment—

even if the applicable law in 2015 did include an ambiguity he might exploit.

123

121 See DiSabatino v. New Castle Cty., 781 A.2d 698, 702 (Del. Ch. 2000) (quoting Wilmington 

Materials, 1988 WL 135507 at *5). 

122 Miller v. Bd. of Adjustment, 521 A.2d 642, 645 (Del. Super. 1986).

123 See, e.g., supra notes 19–21 and accompanying text. 
33

IV. CONCLUSION

The Plaintiff has not secured vested rights, and the Defendant is not equitably 

estopped from requiring a major subdivision plan. Therefore the 2016 Ordinances

shall apply to Ocean Bay Mart, Inc. in full. The parties should submit a form of 

order consistent with this Memorandum Opinion.