We hold that covenants imposed by the Brown County Area Plan Commission as conditions for approval of a planned unit development are enforceable against a subsequent purchaser of property subject to the PUD.
Factual and Procedural Background
The property involved in this case originally consisted of approximately twenty-two acres containing a restaurant and mill in an area zoned for commercial use, and a number of houses used as rental and boarding units in areas zoned for residential use. In 1986, Story Group Inc. requested the Brown County Plan Commission and the County Commissioners to designate over seven acres as a Planned Unit Development (PUD) to permit operation of a "bed and breakfast" which would take guests by reservation only. 1 After a hearing, Story Group and the Plan Commission met in a "work session" in which they discussed sixteen proposed restrictions on the property. The Plan Commission's "Primary Approval" on June 24, 1986 recited that Story Group's proposed plat "is granted primary approval subject to the following conditions: See list of covenants attached ..." The attached "covenants" listed fourteen provisions from the work session, including "(8) No outside loud speakers or audio equipment will be used for any reason what so ever [sic]," "(4) No overnight camping will be allowed within the PUD or in any of it's [sic] parking areas," "(5) No excess noise or excess lighting shall be allowed and all exterior lighting will be ... turned off at 10:00 rax." and "(10) The owner agrees to obtain all necessary State and Local permits, inspections, approvals and license [sic]." On September 28, 1986, the Plan Commission recommended secondary approval "subject to covenants as approved in Primary hearing." Subsequently, the Brown County Board of Commissioners unanimously approved the PUD "as submitted with covenants."
The PUD was modified in 1992 to include the entire twenty-two acre tract of land, but retained essentially the same provisions. The Plan Commission unanimously gave "primary" and "secondary" approval of the 1992 application subject to four additional "conditions" and "[slubject to the previously approved covenants." The "covenants" from both the 1986 and 1992 approvals were retained in the Plan Commission's office and were available for *58 inspection, but were never recorded in the office of the county recorder.
Story Group Inc. went into receivership on December 6, 1998, and on that date Frank Mueller took possession of the Story Property. Mueller and Rick Hofstet-ter, two individuals who had no affiliation with Story Group, Inc., have been operating the property in one form or another ever since. The record does not make clear Mueller's and Hofstetter's initial arrangement, but it is clear that Dubois County Bank, a mortgagee of the Property, acquired title at a sheriff's sale on February 14, 1999 and deeded it to Mueller on May 18, 1999. On August 3, 1999, Mueller transferred the property to Story B & B, LLP ("B & B"), a partnership of Hofstetter and Mueller. Prior to the bank's transfer to Mueller, Mueller and Hofstetter were aware that the property was designated a PUD, but were apparently unaware of the specific requirements. 2 No one from B & B contacted the Plan Commission's office to inquire about the PUD or made any other effort to discover any possible conditions attached to the PUD approval.
Between December, 1998, and September, 1999, B & B expended more than $100,000 in improvements on the Story Property, including repairing leaking roofs, rotting floors, and electrical problems, removing lead based paint, increasing cooler space in the kitchen, conversion of the mill on the property to a bar and grill, and construction of a wooden deck designed for dining, an outdoor public restroom and a storage addition to the mill. In that process, beginning at least on May 3, 1999, B & B asked Doug Harden, then acting Director and Building Inspector for the Plan Commission, for assistance in securing permits from the State to construct a new septic field. On May 4, 1999, Mueller applied for a building permit from the Plan Commission. Joan Wright became director of the Plan Commission and of the Brown County Area Board of Zoning Appeals at some point between May and September 1999. According to her, although B & B received building and septic permits, it failed to obtain "improvement location permits or certificates of occupancy for the bar and grill or for the outdoor food preparation facility."
In September, 1999, Wright sent B & B a copy of the PUD restrictions under cover of a letter stating that the "PUD does not permit use of the Mill building as a bar and grill. It is designed as a shop/Office/B & B unit and any other use of the building violates the terms of the PUD. Further, any use of or on the property which is not specified in the PUD violates the conditions of approval." In May 2000, Wright advised B & B that the PUD also contained prohibitions against "primitive camping" and amplified music. At least since the spring of 2000, B & B has hosted a number of events on the property throughout the year including Story Fest in the spring and October Fest in the fall. In 2000, Story Fest drew 1,500-2,000 people and October Fest doubled that attendance. These festivals involved bringing in artists and musicians for a day of music, arts and crafts, food, and libations. After the 2000 Story Fest the Plan Commission *59 received complaints from B- & B's neighbors that the festival included amplified music audible from neighboring properties, used a portion of the grounds as an amphitheater, used a building designated as a picnic shelter as a stage, and allowed overnight camping.
In April 2001, B & B filed a Petition for Declaratory Judgment and sought a preliminary injunction against the Plan Commission's enforcement of the requirements of the PUD. After one half day the hearing was adjourned without resolution due to the court's other scheduled commitments. In May 2001, a neighbor of the property, Patricia March, was granted leave to intervene in the dormant lawsuit. The Plan Commission then counterclaimed for declaratory judgment and moved for summary judgment. B & B responded with its own motion for summary judgment. The parties' contentions focused on the terms "conditions" and "commitments" as they appear in the PUD statutes explained below. The Plan Commission argued that the Story Property was subject to the PUD, that the restrictions in the PUD constituted valid "conditions," and that B & B was in violation of these conditions. B & B asserted that the restrictions were "commitments," and under the applicable statute, were not enforceable against B & B because they were not recorded. In the alternative, B & B contended that the Plan Commission was estopped from enforcing the PUD by reason of its grant of the building permit.
In the meantime, in preparation for October Fest 2001, B & B spent an additional $250,000 on musicians, artists, and advertising. In an attempt to comply with the PUD covenants, B & B planned to end the music at October Fest 2001 at 9:50 p.m., place speakers inside the barn that housed the stage, provide shuttle service to alleviate traffic congestion, add security, and disallow overnight camping. October Fest 2001 then proceeded without interference.
After a December hearing on the cross motions for summary judgment, the trial court found that most of the PUD restrictions at issue were phrased as directives, but observed that some others were phrased as "agreements" by the developer. 3 The trial court ruled that at least the restrictions framed as directives were "conditions" and therefore did not need to be recorded. The trial court found that questions of fact remained as to what the Plan Commission discovered during the inspection of the property pursuant to the issuance of the improvement location permit, what B & B told the Plan Commission, and what representations, if any, were made by the Plan Commission at that time. Accordingly, the trial court left for trial whether the Plan Commission was equitably estopped from enforcing the restrictions against outdoor food preparation and use of the mill as a grill and tavern. The trial court left for trial whether the conditions were required to be recorded pursuant to the Brown County ordinance discussed below, whether this requirement prohibits enforcement of the restrictions, and whether B & B has violated the PUD. At B & B's request the trial court certified its order on summary judgment for interlocutory appeal.
The Court of Appeals concluded that it was impossible to draw a meaningful line
*60
between "conditions" and "commitments" and focused on whether B & B had reasonable notice of the land use restrictions. Story Bed & Breakfast, LLP v. Brown County Area Plan Comm'n,
I. Planned Unit Developments
Traditional or "Euclidean" zoning, named for Village of Euclid v. Ambler Realty Co.,
While this type of zoning has the advantage of predictability, that certainty comes at a price: "Traditional zoning has had the virtue of certainty and the handicap of rigidity." Town of Schererville v. Vavrus,
A. Indiana Statutes Governing PUDs
In the 1970s, local legislative bodies began including PUD regulations in local ordinances. See generally Vavrus,
(1) Impose reasonable conditions on a proposed planned unit development.
(2) Condition issuance of an improvement location permit on the furnishing of a bond or a satisfactorily written assurance guaranteeing the timely completion of a proposed public improvement in a planned unit development or serving a planned unit development.
(8) Allow or require- an owner of real property to make a written commitment in the manner authorized under section 614 or 615 of this chapter.
Subsection 1512(b) provides that legislative body, in recommending a PUD district ordinance, may:
(1) impose the conditions described in subsection (a)(1) and (a)(2); and
(2) allow or fequire a written commitment as authorized under section 614 or 615 of this chapter. 4
The parties do not base any contention on the fact that the 1500 series was enacted and section 6138 was repealed after the PUD approvals but before B & B acquired the property. .
The Plan Commission acknowledges that section 615(c) requires recording of commitments, but contends that unrecorded "conditions" may nonetheless be binding on subsequent purchasers because they are "other land use restrictions created in accordance with law" which by the express terms of section 613(c) were unaffected by section 613(b).© The Plan Commission also argues that section 1512 contemplates both "conditions" and "commitments" but only the latter are required to be done "as authorized under section 614 or 615," which requires recording to be effective against persons without actual knowledge.
Section 613(c), now amended, provided that "This section does not affect the validity of any covenant, easement, equitable servitude, or other land use restriction cere-ated in accordance with law." Section 921(e) of the local planning and zoning sections of the Code deals with variances. It provides that "[clonditions imposed on
*62
the granting of an exception, a use, or a variance are not subject to the rules applicable to commitments." IC. § 86-7-4-921(e). Both parties agree that if a legislative body imposes the restriction, it is a condition, but if it is submitted by the property owner to induce rezoning, it is a commitment. The Court of Appeals found no intelligible distinction between these terms and declined to attach any significance to them. Story,
B. The Story PUD
On May 1, 1989, the Brown County Board of Commissioners passed a zoning ordinance which included provisions governing PUDs. In 1996, Indiana Code seetion 36-7-4-1504 was enacted and expressly authorized local regulations for PUDs in general as long as they meet the requirements of the 1500 Series-Planned Unit Development. Under that statute, the Brown County PUD ordinance was the "exclusive means for exercising zoning control over [PUDs]". IC. § 36-7-4-1504(c). All parties agree that the 1992 Story PUD approval was governed by the Brown County PUD ordinance and the subsequently enacted 1500 Series. The Brown County Zoning Ordinance defines a Planned Unit Development as:
[A] tract of land proposed to be developed for five (5) or more residential, commercial, or industrial uses or structures, or combinations thereof, (which includes any multi-unit structure with five or more units the intended uses of which are identical), which are planned and developed as a whole under single or joint ownership for the purpose of selling, leasing, renting or conveying individual lots, units, or structures in the future.
The Story Group's 1986 request to rezone the Story Property as a PUD was resisted by Brown County residents who were concerned about noise, traffic, and change of the character of their community. Balane-ing against these concerns was the written description of the layout and concept of the proposed Story Property PUD submitted by the Story Group including that:
The principle [sic] focus in the past and for the future, is less people in Story not more. If the petitioners were limited to their present resources the emphasis would have to be to build a volume business in the restaurant thus increasing traffic. With the projected development the objectives will be to require reservations for dinner and overnight guests and constructing fewer yet more comfortable and exclusive lodging units. Fewer people are easier to control.
Similarly, in the course of a May 27, 1986 public hearing on Story Group's request for PUD designation, Story Group presented the Plan Commission with a second *63 written description of the layout and concept of the requested PUD, including the following passage: |
A principle [sic] objective in this development is to focus on more exclusive and sophisticated services for fewer people rather than, for example, opening the restaurant and gift shop to as many people as advertising can bring in. Current and projected policy, also, is "reservation only" for dinner and overnight guests, again reducing the number of people in Story at any given time.
To preserve this tranquil atmosphere, the Plan Commission chose to impose covenants documented in its "Primary Approval of Planned Unit Development," dat, ed June 24, 1986. The Plan Commission kept this document along with all others relating to the Story Property's PUD designation in its office. The Board of Commissioners kept its copy of the Story PUD documents in the County Auditor's office. In 1992, the Plan Commission recommended approval of a second PUD which retained most restrictions, eliminated a few not relevant here, and added some others, including that the deck would remain unroofed and have no food service. Again, the Plan Commission document referred to these as "conditions." These, like their 1986 predecessors, were unrecorded but were retained in the Plan Commission office.
C. The Legal Status of the Story Restrictions
All agree that the Story Property is a PUD, that its approval with covenants was designed to protect adjacent properties, and that these restrictions applied to the property in the hands of Story Group, its original developers. The issue is whether B & B is also bound by the same covenants. The trial court granted summary judgment to the Plan Commission and against B & B on the question whether these covenants applied to B & B as a successor of Story Group.
B & B argues that summary judgment is improper because the status of the restrictions turns on a disputed question of fact. Some of the restrictions use the term "agree," which B & B contends implies an agreement existed. B & B argues that this implies that all of the restrictions were part of a "commitment" made by Story Group and therefore were required to be recorded to be effective against subsequent purchasers. The trial court agreed as to some of the restrictions, but found as a matter of law that nine of them, including numbers 3, 4, and 5 were conditions. \
Neither case law nor the statute provides a definition of either "condition" or "commitment." The Plan Commission asserts that the trial court properly concluded that at least nine of the restrictions were "conditions" imposed by the county pursuant to Indiana Code section 36-7-4-1512(b)(1) rather than "commitments" tendered by the landowner pursuant to Indiana Code section 36-7-4-1512b)@Q). The approvals do not contain the term "commitments." Moreover, the 1986 Plan Commission approval itself states that the PUD is granted "subject to the following conditions," as do the minutes of the Plan Commission meeting in which the 1992 PUD was approved. The character of the restrictions does not turn solely on the label that the Plan Commission chooses to place on them. However, restrictions number 1, 8, 4, 5, 6, 8, 11 and 12 are phrased as directives not as agreements, and the Plan Commission treated them as conditions of approval that could be en-foreed against subsequent owners even if not recorded. The Plan Commission thus drew two legal conclusions: First, it was permissible to have enforceable conditions
*64
without recording them, and, second, that these restrictions were in that category. Two amici curiae, the Indiana Association of Cities and Towns and Indiana Municipal Lawyers Association, without supporting evidence, state that the practice of imposing conditions on PUD approvals is widespread. The administrative construction of the agency's own documents and statute is entitled to weight. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
D. Bona Fide Purchaser
Apart from whether unrecorded PUD conditions are enforceable against bona fide purchasers, B & B was not a bona fide purchaser without notice. In order to qualify as a bona fide purchaser, one must purchase in good faith, for valuable consideration, and without notice of the outstanding rights of others. John v. Hatfield,
In Bizby, a developer gained approval of a PUD which, among other things, provided guidelines for the use of a parking lot within a developed area.
The Plan Commission's and Brown County Commissioners' records relating to the Story PUD approval are public records open to public inspection. 1.0. §§ 5-14-3-2, 5-14-3-8 (1988). B & B never attempted to view these records, and B & B conceded in the trial court that it had no evidence that the Story PUD approval conditions were not available for inspection in the Plan Commission or Brown County Commissioner offices. B & B, with knowledge that the property was a PUD, and charged with knowledge that "conditions" had been or could have been imposed and might not be of record, failed to examine the publicly available records. B & B's actual knowledge of the PUD approval put B & B on inquiry notice of the use and development conditions.
II. Brown County Zoning Ordinance
B & B's primary contention is that the restrictions contained in the PUD are not "conditions" and therefore are not enforceable against it because it purchased the property without knowledge or notice of the restrictions. However, the trial court sua sponte raised the issue of whether the Brown County Zoning Ordinance required that the conditions be recorded and denied complete summary judgment because " ... sufficient ambiguities exist to require evidence at trial on the meaning of the zoning ordinance."
Interpretation of a zoning ordinance is a question of law. Metro. Dev. Comm'n v. Pinnacle Media, L.L.C,,
The second alleged source of ambiguity is that section 21(C)(2)(8) of the ordinance provides that the Plan Commission "may impose any reasonable conditions upon its approval, including the recording of covenants." The Plan Commission contends even if this provision imposes a recording requirement, it does not make the effectiveness of the condition contingent on recording. We agree with the trial court that the meaning of this ordinance is unclear. Specifically, it may be read to imply that "covenants" must be recorded. However, as the Plan Commission observes, it does not say that in so many words, and can be taken to mean only that the Commission may in its discretion require recording of covenants.
Last, section 21(C)(8)(1)(a) of the ordinance states that the requirement that "approval of a detailed site plan shall be obtained within one year after approval of the Primary Plat" applies only to the " 'Approved Detailed Planned Unit Development'" and "final platting for recording purposes of all or an appropriate part of the [PUD] may be undertaken in sections or phases at a later time." Whether seetion 21(C)@@8)(1) makes PUD approval and platting for recording purposes two different processes is also unclear. "When the legislature enacts a statute in derogation of the common law, this Court presumes that the legislature is aware of the common law, and does not intend to make any change therein beyond what it declares either in express terms or by unmistakable implication." Dunson v. Dunson,
We agree with the trial court that the ordinance is less than clear whether conditions, if imposed, are to be recorded. However, in view of the resolution of the notice issue in Part LD, that issue is not material in this case. At most the ordinance recording requirement is necessary to give notice of the conditions to third parties, and it is not necessary to make the condition effective as to the original applicant or those with notice. B & B had actual notice of the PUD designation, and therefore was on inquiry notice of the specific terms of the conditions. The County may wish to amend its ordinance, or routinely record PUD designations and conditions to avoid these issues in the future, but the ambiguity identified by the trial court and failure to meet a recording re *67 quirement under the ordinance is immaterial in this case.
IIL Equitable Estoppel
B & B argues that since it applied for and received permits for the development of the Story Property and has expended a large sum of money on improvements that the government is now estopped from enforcing the PUD conditions.
The party claiming equitable estoppel must show its "(1) lack of knowledge and of the means of knowledge as to the facts in question, (2) reliance upon the conduct of the party estopped, and (8) action based thereon of such a character as to change his position prejudicially." City of Crown Point v. Lake County,
The party claiming estoppel has the burden to show all facts necessary to establish it. Conard, 614 NE.2d at 921; Johnson v. Payne,
Conclusion
The PUD conditions are valid and enforceable against B & B because it had actual notice of the PUD designation and was on inquiry notice of the conditions. The Plan Commission is not estopped from enforcing the conditions. This case is remanded for further proceedings consistent with this opinion.
Notes
. Prior to the 1986 PUD application, according to the Plan Commission minutes, Story Group's use of the property was without licensing and in violation of the applicable zoning restrictions in several respects.
. In April, 1999, Doug Harden, the Director of the Plan Commission and building inspector, met with Hofstetier regarding septic system design for the Story Property and informed Hofstetter that the Story Property had been granted PUD approval by the Plan Commission and the County Commissioners. May 4, 1999, Mueller applied to the Plan Commission for an improvement location or building permit stating that B & B sought to build an addition to the mill to be used for storage and restrooms. The application states that the property is a PUD.
. Compare covenants number (3) "No outside loudspeakers or audio equipment will be used for any reason what so ever;" (4) "No overnight camping will be allowed within the PUD or in any of its parking areas;" and (5) "No excessive noise or excess lighting shall be allowed ... The outside lights to be turned off at 10 p.m.;" with (2) "The developers agree to follow through with the PUD site plan layout concepts and to complete all work in a professional manner."
. Prior to I.C. § 36-7-4-101 section 613 applied to "advisory planning," "area planning" and "metropolitan development." Currently, section 614 applies to "metropolitan" planning and 615 to "advisory area" planning. The Plan Commission is "advisory" pursuant to Indiana Code section 36-7-1-2.