Posted by: Patricia Salkin | June 15, 2009

No Vested Rights in Electronic Sign Where Stipulated Judgment Prohibited Construction Eight Years Earlier

In 1994, the Hallas constructed a retail sales building on their property without first obtaining a permit.  Upon inspection, the City determined the building did not comply with building code requirements, and thereafter sought to enjoin the Hallas from operating their business in the new building.  The City and the Hallas then entered into a stipulation for entry of judgment regarding signage, and the Hallas were then issued a permit for a sign. The agreement provided for the existing sign on top of the roof of their Garden Center, the existing sign at the entrance to their property off of the highway (or an updated pylon sign of the same height and square footage), and one off-premise directional sign not to be illuminated and subject to a permit from the City.

The Hallas did not construct this last sign until 2006. At that time, the City planner posted a stop-work order since the sign footings did not meet setback requirements.  New footings were then approved, and construction continued.  When construction was nearly completed, another stop-work order because a conditional use permit was required for an electronic-reader board.  Furthermore, the City determined that the new sign was too large.

The Hallas sued the City seeking injunctive relief, declaratory judgment and a writ of mandamus to prohibit the city from interfering with the use of the sign.  The City filed a counterclaim alleging the sign violated both the stipulated judgment and the city zoning ordinances.  The City claimed the sign was too large, impermissibly contained an electronic-message center, and violated the judgment’s prohibition of illumination.  The Hallas argued that they had been using an illuminated sign for the past eight years, and that they therefore had acquired vested rights to this type of sign. The district court entered judgment in favor of the Hallas, finding they acquired vested rights in the sign after it was substantially completed.  The city appealed, and the appeals court reversed.

The Appeals Court determined that since the Hallas were aware that the sign they sought to build and maintain violated the stipulated judgment, therefore they could not acquire vested rights in a sign that was illegal. Even though the Hallas got a permit to erect the sign, they knew at the time that they were requesting a permit for something that the stipulated judgment did not allow.  The eight year old judgment was valid and enforceable, as no waiver had been issued, and therefore the court below erred in finding that the Hallas had acquired vested rights.  Furthermore, the Court pointed out that the City Code prohibits the use of  “moving and flashing” signs, and that the permit was erroneously issued on this ground as well since it was clear that the message on the illuminated sign was to change every six seconds.   

Halla Nursery Inc. v. City of Chanhassen, 763 N.W.2d 42 (Minn. Ct. App. 3/24/2009).

The opinion can be accessed at:

http://caselaw.lp.findlaw.com/data2/minnesotastatecases/apppub/0903/opa080233-0324.pdf


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