Plaintiff, owner of approximately 216 acres of land in the Town of Yorkshire, commenced a proceeding seeking a declaration that its mining of sand and gravel aggregate on the property was a lawful nonconforming use and that it had therefore acquired a vested right to mine the property. Although a jury found for the Plaintiff awarding it $190,000 plus interest in damages, the Appellate Court reversed, concluding that the trial court erred in failing to grant the Town’s motion for a directed verdict at the close of the Plaintiff’s evidence.
The Appellate Court explained that the Plaintiffs did not establish that they had a legally existing nonconforming use prior to the adoption of the Town’s zoning law in 2001 because the activities that it claimed to have done on the land did not constitute mining, but merely were performed in contemplation of mining. Specifically, the Plaintiff applied for, received and renewed a mining permit from the state Department of Environmental Conservation. The Plaintiff also: allowed two sand and gravel companies to remove a total of 40 truckloads (400 tons) of materials for testing; removed timber from the property; surveyed and staked out locations of the mining area and haul road; drilled test holes; designed and obtained steel for a bridge; and dug and monitored wells. The Court noted that the Plaintiff’s general manager stated that they “did not commercially mine the property” during the 15-month period when the Town moratorium on mining was lifted and when the new zoning law was enacted. In addition, it was acknowledged that even under the permit from DEC, no commercial mining activities were permitted until the bridge was constructed and the haul road was paved, neither of which had occurred.
With respect to the vested rights claim, the Appellate Court also agreed with the Town that the Plaintiff did not acquire a vested right to mine the property. In order for vested rights be acquired in New York, the Court explained that a landowner must demonstrate a commitment to the purpose for which a legally issued permit was granted by “effecting substantial changes and incurring substantial expenses to further the development.” Citing to Town of Orangetown v. Magee, 88 N.Y.2d 41, the Court noted that “[n]either the issuance of a permit…nor the landowner’s substantial improvements and expenditures, standing alone, will establish the right. The landowner’s actions relying on a valid permit must be so substantial that the municipal action results in serious loss rendering the improvements essentially valueless.” The Court further explained, that vested rights do no accrue “[w]here substantial construction has been commenced, but expenditures thereon are unsubstantial…[or] where substantial expenditures have been made but substantial construction has not commenced.” Citing to Matter of Putnam Armonk v. Town of Southeast, 52 A.D.2d 10. Although $800,000 was spent on the project, $750,000 of this amount was spent on acquiring the land and obtaining the permit from DEC, and since these expenditures were incurred by the Plaintiff before obtaining the permit and not in reliance on the permit, the Court said that “they do not constitute the type of substantial expenditures that would entitle plaintiff to a vested right to mine its property.” Citing to Preble Aggregate v. Town of Preble, 263 A.D.2d 849, lv. denied, 94 N.Y.2d 760.
The New York Court of Appeals reversed, noting that the Town had no zoning laws when the Company purchased the property in 1996 or when DEC issued the mining permit in 1999. Although the Town argued that the Company could not sue them unless the Town action definitively caused an injury to the Company, the court cites to the fact that the letter to the Company indicating that mining operations needed to cease caused a definitive injury by effectively disabling the company from obtaining financing for the operation. Lastly, the town argued that the Company ceased mining operations as evidence that they abandoned the nonconforming use of the property and were therefore no longer legally allowed to continue operations because of it. However, the Court agreed that the Company never completely abandoned operations of the mine. The Court noted that the Company spent $500,000 in reliance on the Town’s initial unqualified permission to mine the property and that the property was used as a nonconforming use, as opposed to a contemplated use, at the time the zoning ordinance became effective. Therefore, the Court of Appeals held that the Company established a legal nonconforming use.
Glacial Aggregates, LLC v Town of Yorkshire, 14 N.Y. 3d 127, 9897 N.Y.S. 2d 677 (NY 2/18/2010).
The opinion can be accessed here.
