G-Wilmington Assocs. v. Riverside Hosp. Redevelopment

• Court: Court of Chancery of Delaware
• Writing for the Court: Mitchell, M.
• Docket Number: C. A. 2024-0090-LM
• Decision Date: 01 November 2025
• Citation: G-Wilmington Assocs. v. Riverside Hosp. Redevelopment, C. A. 2024-0090-LM (Del. Ch. Nov 01, 2025)
• Parties: G-WILMINGTON ASSOCIATES, Plaintiff, v. RIVERSIDE HOSPITAL REDEVELOPMENT, LLC, LANDON CONSTRUCTION, LC, CONSTRUCTION DELAWARE, INC., and the CITY OF WILMINGTON, Defendants.

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G-WILMINGTON ASSOCIATES, Plaintiff, v. RIVERSIDE HOSPITAL REDEVELOPMENT, LLC, LANDON CONSTRUCTION, LC, CONSTRUCTION DELAWARE, INC., and the CITY OF WILMINGTON, Defendants.

C. A. No. 2024-0090-LM

Court of Chancery of Delaware

November 1, 2025

Date Submitted: June 9, 2025

Christopher P. Simon, David G. Holmes, CROSS & SIMON LLC, Wilmington, DE; Counsel for Plaintiff G-Wilmington Associates.

Stephen A. Spence, Sean A. Meluney, MELUNEY ALLEMAN &SPENCE, LLC, Wilmington, DE; Counsel for Defendant Riverside Hospital Redevelopment, LLC and LC Construction Delaware, Inc.

William E. Gamgort and Carmella Cinaglia, YOUNG CONAWAY STARGATT &TAYLOR, LLP, Wilmington, DE; Counsel for Defendant City of Wilmington.

POST-TRIAL FINAL REPORT

Mitchell, M.

This matter comes before the Court on a dispute arising out of an easement agreement that allowed a right of access on property owned by the plaintiff, the owner of a shopping center. The plaintiff brings this action against three defendants, a neighboring housing developer, a construction company, and the City of Wilmington, alleging a breach of agreement, trespass, and related claims stemming from the alleged unauthorized extension of an easement across the plaintiffs property. The plaintiff contends that the defendants exceeded the scope of the easement as agreed and thereby encroached upon and trespassed onto the plaintiffs property. For reasons explained in greater detail below, I find there is a breach of the easement agreement and trespass onto the Plaintiffs property, however I do not find it appropriate to terminate the agreement and order the removal of the sidewalk.

I. BACKGROUND^[1]

Plaintiff, G-Wilmington Associates (hereinafter, "GWA") is the owner of the Miller Road Commons shopping center (hereinafter, the "GWA Property").^[2] LC Construction (hereinafter, "LCC") and Riverside Housing Redevelopment (collectively, "Defendants") are companies with their principal place of business in Delaware.^[3] In May 2019, Defendant, Riverside Housing Redevelopment (hereinafter, "RHR") purchased a 4.6-acre parcel adjacent to the GWA Property (hereinafter, the "RHR Property").^[4] The City of Wilmington (hereinafter, the "City") assisted in orchestrating the purchase of the RHR Property and is the third defendant here.^[5]

A. The Properties

The 17.5-acre GWA Property, located at 3600 Miller Road in New Castle County, Wilmington, Delaware, contains approximately eight or nine stores comprised of about 165,000 square feet of rentable space.^[6] GWA asserts they acquired this Property in 1980.^[7] The shopping center, as it stands today, is located between Miller Road to the north, Franklin Place to the south, and West 37^th Street to the east side of the property, outside the boundaries of the City.^[8]

The RHR Property is located at 710 Lea Boulevard, Wilmington, Delaware.^[9] Unlike the GWA Property, the RHR Property is within the boundaries of the City of Wilmington, located to the east of both the GWA Property and West 37^th Street.^[10] RHR acquired the RHR Property in May 2019 with the intention of building multifamily apartments.^[11]

West 37^th Street (hereinafter, "W. 37^th St."), is a finished roadway on the GWA Property, connecting Franklin Place with Miller Road.^[12] It is a twenty-six foot wide road that runs the length of the parcel owned by GWA, and it is identified as a public right of way dedicated by GWA in a subdivision plan recorded in 1989.^[13]Along W. 37^th St. sits a 10-foot construction easement on either side, that was expressly dedicated in the GWA recorded subdivision plan and appears on subsequent plans of the property.^[14] There is conflicting testimony on the purpose of the construction easement with the GWA stating and providing support that it is to provide the State space for storage of materials and access to W. 37^th St. when it is providing maintenance to the road,^[15] and the Defendants offering supporting evidence and testimony that it is a permanent construction easement that gives the State the right to construct a sidewalk.^[16]

GWA claims to own this right-of-way and exhibits its ownership of the street through maintenance.^[17] Yet GWA cannot recall specific instances of maintaining, paving, or fixing potholes, and a contract for plowing and shoveling displays that such services do not extend to this roadway.^[18] DelDOT does not claim to have maintenance rights over W. 37^th St..^[19] The street is a private road that has been dedicated to public use, meaning it can be used by the public and cannot be closed off to the public.^[20]

B. The Declaration of Voluntary Assurances

In January 2019, before RHR purchased the RHR Property, the former Mayor of the City of Wilmington, Michael Purzycki contacted Mr. David Rosen, the executive vice president of Rosen Associate Management Corp, and agent for GWA.^[21] In doing so, the mayor discussed the possibility of RHR's planned 165-unit, three-building, upscale market-rate housing project, scheduled to begin within the next six months.^[22] The mayor also specifically mentioned that he wanted to explore the possibility of an easement over a portion of the GWA Property to have a secondary entrance to the proposed development site.^[23] Mr. Rosen believed that this would benefit the shopping center and tenants by increasing the flow of potential customers.^[24] On January 15, 2019, Mr. Rosen received a subsequent letter from the mayor, with the City of Wilmington letterhead, memorializing the verbal discussions and urging the importance of the easement over GWA's property to the City.^[25] The mayor emailed GWA on February 19, 2019, which included renderings of RHR's proposed housing project.^[26] The renderings consisted of a schematic showing three buildings with two entrances, a parking lot, and a swimming pool.^[27]

During this time, the mayor also facilitated a negotiation with RHR and Brandywine Hills Community Association (hereinafter, "BHCA"), a neighborhood within the City boundaries and next door to the two properties, who expressed concern with the proposed new construction of multi-family apartments on the RHR Property.^[28] When RHR purchased its property in 2019, it was not zoned for multifamily housing but zoned as R-2 residential, for single-family housing.^[29] To obtain the necessary rezoning for the construction of the multi-family housing on RHR's Property, on May 3, 2019, RHR entered into the Declaration of Voluntary Assurances (hereinafter, the "DVA") with the City and BHCA.^[30] The DVA was signed by Louis J. Capano III, CEO of Capano the parent company of RHR and recorded on May 6, 2019.^[31] The BHCA required, through the execution of the DVA, the construction of new sidewalk on the GWA Property along W. 37^th St. and the construction of a secondary access point to the RHR Property onto W. 37^th St..^[32]

GWA is not a party to the DVA.^[33] Nonetheless, the mayor's assistant emailed Mr. Rosen a draft of the DVA before its execution on March 25, 2019.^[34] The draft sent to Mr. Rosen is identical to the final executed DVA with the only difference being the dates at the top of the document.^[35]

C. The Easement Agreement

On April 22, 2020, GWA and RHR entered into the Easement Agreement.^[36] The City is not a signatory to the Easement Agreement.^[37] The easement is approximately ten feet wide and one hundred and ten feet long running along the east side of W. 37^th St..^[38] The easement, like the GWA Property, lies within unincorporated New Castle County and outside the boundaries of the City.^[39]

GWA and RHR agreed that RHR would pay $25,000 as partial consideration for the granting of the easement and then thereafter the RHR parcel owner would pay $2,000 per month, increasing on a compounding basis by 12% every five years, for as long as the Easement Agreement remained in place.^[40] RHR has made all required payments under the Easement Agreement, even those required of it throughout the span of this litigation.^[41] GWA believes the agreement was only for building the secondary vehicular access between the two properties, while RHR entered the agreement to facilitate the construction projects described in the DVA, which include a sidewalk running along W. 37^th St..^[42]

The Easement Agreement permits RHR to use GWA's Property as a means of secondary vehicular access to the RHR Property.^[43] The Easement Agreement, in Section 2.1, provides for an easement "for the purpose of facilitating pedestrian and vehicular access, ingress, egress, and regress in, on, to, from, upon, under, across, over, and through that portion of [the Easement Area.]"^[44] Section 2.2 of the Easement Agreement states that "[t]he RHR Parcel Owner shall have the right, at its sole cost and expense, to install, construct, use, connect, maintain, repair, and replace such improvements on the Easement Area ... as are necessary to connect the RHR Parcel to the public right of way identified as 37^th Street on the RHR Plan, and/ or as desirable to the RHR Parcel Owner for the use of the Permanent Easement; provided" they abide by further requirements therein.^[45]

RHR under the agreement, is to obtain "all certificates, approvals, permits, licenses and other consents respecting the Easement Area that are required by any local, county, state or federal agencies or other authorities having jurisdiction over the Easement Area and/or [the GWA Property,]" and must also procure and maintain insurance for the duration of the agreement "in amounts and coverages reasonably required by [GWA.]"^[46] RHR agreed to provide all plans and specifications for the installation and maintenance of the easement to GWA for its approval before the start of construction.^[47] The Easement Agreement requires that construction is to be...