Dover Historical v. Dover Planning Com'n
| Decision Date | 10 July 2006 |
| Docket Number | No. 112, 2006.,No. 111, 2006.,111, 2006.,112, 2006. |
| Citation | 902 A.2d 1084 |
| Parties | DOVER HISTORICAL SOCIETY, INC., Henry R. Horsey, Holly Johnson and Charles Johnson, Petitioners-Below, Appellants, v. CITY OF DOVER PLANNING COMMISSION, Young & Malmberg, P.A., a Delaware professional association, and Yozima, L.L.C., a Delaware limited liability company, Respondents-Below, Appellees. The Friends of Old Dover, Inc., Henry R. Horsey, Holly Johnson and Charles Johnson, Petitioners-Below, Appellants, v. City of Dover Planning Commission, Young & Malmberg, P.A., a Delaware professional association, and Yozima, L.L.C., a Delaware limited liability company, Respondents-Below, Appellees. |
| Court | Supreme Court of Delaware |
Court Below: Superior Court of the State of Delaware in and for Kent County, C.A. No. 05A-07-001.
Upon Appeal from the Superior Court. AFFIRMED IN PART; REVERSED IN PART and REMANDED.
Grover C. Brown, Esquire, of Gordon, Fournaris & Mammarella, P.A., Wilmington, Delaware, and Michael J. Maimone, Esquire, of Edwards Angell Palmer & Dodge, LLP; for Appellants.
Nicholas H. Rodriguez and William W. Pepper, Sr., Esquires, of Schmittinger & Rodriguez, P.A., Dover, Delaware; for Appellee City of Dover Planning Commission.
William E. Manning and Richard A. Forsten, Esquires, of Klett Rooney Lieber & Schorling, Wilmington, Delaware; for Appellees Young & Malmberg, P.A. and Yozima, L.L.C.
Before HOLLAND, BERGER and JACOBS, Justices.
The petitioners below-appellants,1 appeal from the denial of two applications for attorneys' fees and expenses incurred in litigation over the preservation of four historic buildings that were located in the Dover Historic Green District. The appellants claim that in denying their fee applications the Superior Court abused its discretion because: (1) their first application was meritorious under the "common benefit" exception to the "American Rule" under which each side normally bears its own costs; (2) res judicata was improperly applied to bar the second fee application; and (3) the second application was meritorious, and should have been granted, under the "bad faith" and "mootness" exceptions. We conclude that Superior Court committed no error in denying the appellants' first application for fees and costs, but the Court did err by not granting the second application under the "bad faith" exception to the American Rule. We therefore affirm the Superior Court Order dated June 20, 2005, and reverse its Order dated January 31, 2006.
This case arises out of the proposed construction of a new three-story office building in the Dover Green Historic District. As the City of Dover Code required, the developers sought from the Dover Planning Commission ("DPC") an architectural review certificate that would grant the developers permission to construct the building. Under the Dover Code, an application for an architectural review certificate must be referred initially to the Historic District Commission ("HDC") for deliberation and a recommendation. That was done here.
On January 16, 2003, the HDC recommended that the certificate be awarded to the developers for the new construction. Following the HDC's recommendation, the DPC approved the issuance of the certificate. On June 18, 2003, the appellants, who are concerned residents and/or owners of property located on the Green, and various similarly concerned organizations, applied for a writ of certiorari to obtain Superior Court review of the DPC's decision. Seeking to prevent the issuance of the certificate, the appellants claimed that: (i) the proposed building did not conform to the standards governing construction within the Dover Historic Green District; and (ii) the proposal would place the new building within two feet of four existing historic buildings (two of which dated to the 18th century, the other two dating to the 17th century), and would require their partial demolition.
On August 25, 2003, the Superior Court granted the appellees' motion to dismiss the appellants' petition for lack of standing. This Court reversed that dismissal on December 2, 2003 and remanded the case to the Superior Court.2 On remand, the Superior Court overturned the decision of the DPC, and remanded the case to that body for further factual findings. The Superior Court held that the DPC had exceeded its jurisdiction by approving a nonconforming structure without adhering to the Design Guidelines and Standards, which are provisions of the Dover Code that govern new construction within the Dover Historic District.
The DPC again considered the proposed plan, this time within the framework of the criteria articulated in the Guidelines. In a four-page letter decision, the DPC re-approved the plan on January 27, 2005. Thereafter, the appellants applied to the Superior Court for an award of attorneys' fees. In that fee application, appellants also challenged the DPC's re-approval (on remand) of the proposed plan. On June 20, 2005, the Superior Court denied the appellants' application for fees, and ordered appellants to file a new petition if they sought to challenge the second DPC approval. The Superior Court's Order denying fees is one of the two orders presently being appealed.
On July 7, 2005, the appellants filed a second petition in the Superior Court seeking review of the DPC's issuance of the architectural review certificate. For Michael Zimmerman, a principal of appellee, Yozima, L.L.C., that second petition was the proverbial straw that broke the camel's back. On the morning of July 16—the day after the appellees were served with the second petition—an angry Zimmerman climbed into a trac hoe (a piece of construction equipment) and demolished three of the four historic structures in the Historic District that were the subject of the first and second Superior Court petitions. In response, the City of Dover revoked the architectural review certificate that the DPC had previously granted to the appellees Young & Malmberg, P.A. ("Y & M"), and Yozima, L.L.C. ("Yozima").
The appellants then filed a second application for attorneys' fees claiming that Zimmerman's conduct, which also was attributable to Y & M and Yozima, constituted "bad faith" that justified a fee-shifting award. The Superior Court denied that second application by Order dated January 31, 2006. That Order is the basis for the appellants' second appeal. The two appeals were consolidated on April 13, 2006.
At issue on this appeal is the Superior Court's denial of the appellants' two applications for attorneys' fees and expenses. We review a denial of an application for counsel fees and costs for abuse of discretion.3 "When an act of judicial discretion is under review, the reviewing court may not substitute its own notions of what is right for those of the trial judge, if his judgment was based upon conscience and reason, as opposed to capriciousness or arbitrariness."4 Where it is in issue, we review the Superior Court's formulation of the appropriate legal standard de novo.5
The appellants claim that the Superior Court erred by denying their first application for attorneys' fees, because that application was meritorious under the "common benefit" exception to the American Rule. As earlier noted, the American Rule requires that "a litigant must, himself, defray the cost of being represented by counsel."6 Under the "common benefit" exception, a litigant may, nonetheless, receive an award of attorneys' fees if: (a) the action was meritorious at the time it was filed, (b) an ascertainable group received a substantial benefit, and (c) a causal connection existed between the litigation and the benefit.7
The appellants contend that they qualify under the common benefit exception because their petition was meritorious when filed. Moreover, they claim, it conferred an aesthetic benefit upon the City of Dover and its citizens, by causing the issuance of the certificate to be reversed, thereby preventing the construction of the nonconforming new building. The appellants acknowledge that this exception usually arises in the context of corporate litigation, but they emphasize that "[t]he form of the suit is not a deciding factor; rather, the question to be determined is whether a plaintiff, in bringing a suit either individually or representatively, has conferred a benefit on others."8
The appellees respond that the common benefit exception applies only in the context of corporate litigation or, at a minimum, only in cases brought in equity. Neither condition being present here, the appellees contend that the Superior Court correctly denied the appellants' fee application.
Under Delaware law, litigants are ordinarily responsible to pay the costs of their own representation in litigation.9 Express statutory authorization and certain equitable doctrines provide limited exceptions to that rule. The "common fund" exception enables a litigant who succeeds in conferring a monetary benefit upon an ascertainable class of individuals to recover costs from the fund that he or she has created.10 A somewhat related exception, the "corporate benefit" doctrine, allows a litigant to recover fees and expenses from a corporation where the litigation has conferred some other (non-monetary) valuable benefit upon the corporate enterprise or its shareholders.11 The purpose underlying these fee-shifting doctrines is to balance the equities to prevent "persons who obtain the benefit of a lawsuit without contributing to its cost [from being] unjustly enriched at the successful litigant's expense."12
A threshold issue that should be addressed (but which was not briefed by the parties) stems from the fact that this action was filed in the Superior Court, not the Court of Chancery. A court of equity has jurisdiction to award counsel fees as part of costs in a proper case, but in an action at law, absent a statutory...
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