Also known as:vested right theory · vested rights · vested right · doctrine of vested rights
Written by attorneys — see sources below.
2 senses
1
in property law
A doctrine protecting a landowner's right to continue a nonconforming use of land that was lawful when begun or to complete a development begun in good-faith reliance on a permit or prior zoning. The right arises when the owner has made substantial expenditures or changed position such that revocation would be inequitable. Protection of these pre-existing rights limits a municipality's power to eliminate the use immediately upon rezoning.
2
Sense 1
1
in property law
A doctrine protecting a landowner's right to continue a nonconforming use of land that was lawful when begun or to complete a development begun in good-faith reliance on a permit or prior zoning. The right arises when the owner has made substantial expenditures or changed position such that revocation would be inequitable. Protection of these pre-existing rights limits a municipality's power to eliminate the use immediately upon rezoning.
Examples2
Nonconforming Mobile Home Park
Viola Volkov has operated a mobile home park for forty years on land later rezoned for luxury condominiums. After the rezoning she obtained a valid building permit and spent over eight hundred thousand dollars installing plumbing risers and framing new units. The city then enacted an amortization ordinance requiring all nonconforming parks to close within ten years. Volkov's long-standing use and substantial expenditures give her a vested right to continue operations and complete the permitted work despite the new zoning.
Sense 2
2
in conflict of laws
A choice-of-law theory holding that rights and obligations vest under the law of the place where the relevant act or event occurred and must be recognized by other jurisdictions. The theory selects the law of a single contact, such as the place of injury in torts, and applies it to the entire case. It has been criticized for ignoring the policy interests of other states that may have stronger connections to the dispute.
Examples4
Out-of-State Auto Accident
Vera Vargas, a New York resident, was injured in an automobile accident while riding as a passenger in a car driven by a New York friend in Ontario. Ontario law would bar her recovery, but New York law would permit it. Under the vested rights theory the law of the place of injury would govern the entire case, yet a court applying modern interest analysis may instead apply New York law because New York has the stronger policy interest in compensating its resident.
A choice-of-law theory holding that rights and obligations vest under the law of the place where the relevant act or event occurred and must be recognized by other jurisdictions. The theory selects the law of a single contact, such as the place of injury in torts, and applies it to the entire case. It has been criticized for ignoring the policy interests of other states that may have stronger connections to the dispute.
Each sense below has its own examples, sources, and questions.
Permit Reliance on Rezoned Land
Violet Vang obtained a building permit under existing zoning and spent substantial sums constructing the foundation and utilities for a commercial building. The city later rezoned the area residential and attempted to revoke the permit. Because Vang acted in good faith on the permit and made concrete expenditures that would be inequitable to nullify, she holds a vested right to finish the project under the prior zoning.
2 common questions
Students Frequently Ask...
How does a landowner acquire a vested right to finish a project after rezoning?
A landowner acquires a vested right when, in good-faith reliance on a valid permit or existing zoning, the owner makes substantial expenditures or otherwise changes position such that depriving the right would be inequitable. Some jurisdictions require a permit plus substantial construction. Others apply a balancing test. The doctrine prevents a municipality from applying new zoning to defeat reasonable expectations formed under prior law.
When may a municipality still terminate a nonconforming use despite vested rights?
A municipality may terminate a nonconforming use through abandonment, discontinuance for the statutory period, or in some jurisdictions through a reasonable amortization ordinance that gives the owner time to phase out the use. The amortization period must be reasonable in light of the nature of the use, the owner's investment, and the time allowed.
Babcock v. Jackson12 N.Y.2d p. 482, 240 N.Y.S.2d p. 750, 191 N.E.2d p. 284
On September 16, 1960, Georgia Babcock, a resident of Rochester, New York, along with her friends Mr. and Mrs. William Jackson, also Rochester residents, departed from Rochester in William Jackson's automobile for a weekend trip to Canada, with Babcock traveling as a guest passenger. Several hours later, while driving in the Province of Ontario, Jackson lost control of the vehicle, which left the highway and struck an adjacent stone wall, resulting in serious injuries to Babcock.
After returning to New York, Babcock commenced an action against Jackson alleging negligence in the operation of the automobile. Following Jackson's death, his executrix was substituted as the defendant. At the time of the accident, Ontario law included a statute providing that the owner or driver of a motor vehicle is not liable for loss or damage resulting from bodily injury to a passenger being carried in the vehicle, except for vehicles operated in the business of carrying passengers for compensation.
The defendant moved to dismiss the complaint on the ground that Ontario law governed and barred recovery. The Special Term granted the motion, and the Appellate Division affirmed the dismissal without opinion.
Vanessa Vinson was injured in an accident while riding with her husband in Wisconsin. Wisconsin law at the time barred interspousal suits, but the couple later moved to a state that permitted them. The vested rights theory would fix the governing law at the place of the tort, yet a court may instead consider the current domicile's interest in allowing the suit between its residents.
The plaintiff, Mrs. Haumschild, and her husband were domiciled in Wisconsin at all relevant times. Wisconsin is both the state of the forum and of the domicile while California is the state where the alleged wrong was committed. While the couple was traveling in California, Mrs. Haumschild sustained personal injuries in an automobile accident that was allegedly caused by her husband's negligence.
She subsequently commenced an action in Wisconsin circuit court against her husband and Continental Casualty Company, his insurer, seeking damages for those injuries. The defendants asserted that California law barred a wife from suing her husband in tort and therefore precluded recovery. The circuit court rendered judgment against the plaintiff on that ground.
The plaintiff appealed to the Supreme Court of Wisconsin. The appeal was argued before the Supreme Court of Wisconsin on March 2, 1959. On April 10, 1959, the court reversed the judgment in an opinion authored by Justice Currie, with Justice Fairchild filing a separate concurrence joined by Justice Brown.
Vaughn Valentine died in an accident in a state whose wrongful death statute limited damages. His family sued in New York, which had no such limit. The vested rights theory would apply the law of the place of death to the entire claim, but a court may reject that mechanical rule when the forum state has a stronger interest in full compensation for its residents.
Loucks v. Standard Oil Co. of New York224 N.Y. 99, 111, 120 N.E. 198 (1918)
The plaintiffs, administrators of the estate of Everett A. Loucks, brought suit in New York courts seeking damages for his death. Loucks was traveling on a highway in Massachusetts when he was run down and killed by the negligence of servants of the defendant Standard Oil Co. of New York who were then engaged in the defendant's business. Loucks left a wife and two children, all residents of New York.
A Massachusetts statute, Public Laws chapter 171 section 2 as amended by Laws of 1907 chapter 375, states that if a person or corporation by negligence causes the death of a person who is in the exercise of due care and not in the defendant's employment or service, the defendant shall be liable in damages in a sum of not less than five hundred dollars nor more than ten thousand dollars, to be assessed with reference to the degree of culpability, to be recovered in an action of tort commenced within two years after the injury by the executor or administrator of the deceased, one-half to the use of the widow and one-half to the use of the children.
The action was brought under that Massachusetts statute. The case reached the Court of Appeals of New York after proceedings in the lower courts, including an order by the Special Term and a judgment by the Appellate Division.
All parties to the action are residents of New York. The death occurred on a Massachusetts highway during the course of the defendant's business operations there.
Valerie Voss held water rights under a compact between two states. When one state sought to apply its own law to alter those rights, the vested rights theory would require recognition of the rights as fixed by the law of the place they first arose. A court may nevertheless examine the equitable apportionment interests of both states rather than mechanically applying the original situs law.
Hinderlider v. La Plata River & Cherry Creek Ditch Co.304 U.S. 92, 110 (1938)
In 1928, the La Plata River and Cherry Creek Ditch Company, a Colorado corporation, owned a ditch diverting water from the La Plata River in Colorado for irrigation purposes. On July 5, 1928, the company filed suit in the District Court for La Plata County against Hinderlider, the State Engineer of Colorado, and his subordinates. The complaint alleged that since June 24, 1928, the defendants had administered the river's water in a manner that deprived the company of water it claimed the right to divert, and it sought a mandatory injunction.
The defendants admitted shutting the company's head-gate but maintained that their actions complied with the La Plata River Compact, an agreement between Colorado and New Mexico approved by Congress. The compact allocated shares of the river's flow between the states, including provisions for unrestricted use when flow was high and rotation of the entire flow during low-flow periods in summer months. In 1928, the state engineers of both states implemented a rotation schedule of ten-day alternating periods to maximize beneficial use when the river was low.
The La Plata River originates in Colorado's mountains, flows into New Mexico, and joins the San Juan River. Both states had long used its waters for irrigation under the appropriation doctrine, where priority of beneficial use determines rights. A 1898 Colorado decree had adjudicated the Ditch Company's rights to 39.5 cubic feet per second, subject to five senior priorities totaling 19 second feet. On June 24, 1928, the stream flow at the Colorado gauging station measured 57 second feet.
The District Court dismissed the suit after the first trial in 1930, finding the compact justified the defendants' actions. The Colorado Supreme Court reversed that judgment. After remand and a second trial on the same evidence, the trial court again entered a decree favorable to the Ditch Company in 1936, which the state supreme court affirmed in 1937. The United States Supreme Court granted review following an appeal.
The compact had been negotiated after authorization by the legislatures of both states in 1921, ratified by them in 1923, and approved by Congress in 1925.
Why have courts largely rejected the vested rights theory in choice of law?
Courts have rejected the theory because it mechanically selects the law of a single contact, such as the place of injury, without considering the policy interests of other states that may have stronger connections to the parties or the dispute. The approach produces arbitrary results and ignores the practical considerations that should guide choice-of-law decisions.
rights
and liabilities which arise out of that act. "The vice of the
vested rights theory
", it has been aptly stated, "is that it affects to decide concrete cases upon generalities which do not state the practical considerations involved". (Yntema, The Hornbook Method and the…