Ocean Bay Mart, Inc. v. The City of Rehoboth Beach, Delaware, C.A. No. 2019-0467-SG

Ocean Bay Mart (owned by Keith Monigle) sought to redevelop a 7.71-acre C-1 zoned shopping center into a 63-unit condominium development called "Beachwalk," mostly detached homes.
Rehoboth Beach Code’s Table of Use Regulations permitted single-family detached dwellings in C-1 "provided that no more than one main building may be erected on a single lot," creating ambiguity for a multi-unit detached condominium on one lot.
Plaintiff consulted city officials informally (including an August 2013 email from the acting Building Inspector and a 2014 conversation between Plaintiff’s counsel and the City Solicitor) and declined the City’s optional Project Concept Review to avoid public attention to the project.
Plaintiff submitted a Site Plan in June 2015; the Building Inspector issued a November 2015 letter treating the plan as a subdivision. Plaintiff appealed; the Board of Adjustment found the Code ambiguous and overturned the Inspector.
In 2016 the City adopted two ordinances clarifying one-detached-house-per-lot and requiring front-door proximity to public streets (public-safety rationale). In 2019 the City adopted an ordinance making the 2016 changes apply to pending applications, including Beachwalk.
Plaintiff sued for declaratory relief and equitable estoppel, claiming vested rights and arguing the City should not apply the 2016/2019 ordinances to Beachwalk; the Court of Chancery denied relief.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiff obtained vested rights to proceed under pre-2016 law	Monigle relied in good faith on the Code as interpreted/assurances and expended substantial sums and forgone rent	City argued the Code was ambiguous, plaintiff was on notice city might change it, and reliance was not reasonable	No vested rights: plaintiff’s reliance was not reasonable given Code language, ambiguity, Inspector’s 2015 determination, and plaintiff’s choice to avoid Project Concept Review
Whether equitable estoppel prevents City from enforcing the ordinances	City officials’ statements (Mayor, some Commissioners, Solicitor) and past conduct induced reliance so City should be estopped	City said those statements were nonbinding, qualified, and could not bind the municipal body; no reasonable, substantial reliance	No estoppel: informal/qualified statements were insufficient to justify reasonable, substantial reliance
Whether the 2016 ordinances serve a public interest that weighs against vested-rights relief	(Plaintiff) public interest is outweighed by plaintiff’s expenditures and reliance	(City) ordinances protect public safety (emergency access) and clarify zoning/density—valid exercise of police power	Ordinances advance legitimate public interests (health, safety, administrative clarity) and weigh against granting equitable relief

Shellburne, Inc. v. Roberts, 224 A.2d 250 (Del. 1966) (articulated the historical "permit-plus" vested-rights approach)
In re 244.5 Acres of Land, 808 A.2d 753 (Del. 2002) (rejected a rigid permit-plus test and adopted a balancing test focused on good-faith reliance)
Town of Cheswold v. Central Delaware Business Park, 188 A.3d 810 (Del. 2018) (reinforced In re 244.5 Acres balancing approach and noted delay/pace of development as a relevant factor)
DiSabatino v. New Castle County, 781 A.2d 698 (Del. 2000) (described equitable estoppel where governmental assurances induce substantial, reasonable reliance)
Carl M. Freeman Assocs., Inc. v. Green, 447 A.2d 1179 (Del. 1982) (zoning ambiguities are construed in favor of property owners)