Heathergreen Commons Condominium Ass'n v. Paul

• Decision Date: 13 November 1985
• Citation: 503 A.2d 636
• Parties: HEATHERGREEN COMMONS CONDOMINIUM ASSOCIATION, Jonathan Church, Frank T. & Catherine Wharton and L & N Consultants, Inc., Plaintiffs, v. Ralph PAUL, Rosalind Paul, Robert Smagala and Rosalind Investments, L.P., Defendants. . Submitted:
• Court: Court of Chancery of Delaware

Page 636

503 A.2d 636

HEATHERGREEN COMMONS CONDOMINIUM ASSOCIATION, Jonathan Church, Frank T. & Catherine Wharton and L & N Consultants, Inc., Plaintiffs, v. Ralph PAUL, Rosalind Paul, Robert Smagala and Rosalind Investments, L.P., Defendants.

Court of Chancery of Delaware,

New Castle County.

Submitted: Nov. 13, 1985.

Decided: Dec. 4, 1985.

On Motions To Dismiss Complaint And Counterclaims: Motions Denied.

Rodman Ward, Jr., and David J. Margules of Skadden, Arps, Slate, Meagher & Flom, Wilmington, and Howard A. Handelman and Peter J. Walsh, of Bayard, Handelman & Murdoch, P.A., Wilmington, for plaintiffs.

Paul P. Welsh of Morris, Nichols, Arsht & Tunnell, Wilmington, for defendants.

OPINION

JACOBS, Vice-Chancellor.

This action for injunctive relief grows out of a dispute over whether a certain tract of land, owned by the defendants ¹ (Parcel A) is burdened by certain deed restrictions and negative easements running in favor of the plaintiffs, who are owners of condominium units located on the adjoining tract ("Parcel B"). ² Such restrictions and easements, if applicable to the defendants, would prohibit their use of Parcel A for various specified purposes, including the development of a hotel, motel, or restaurant.

In their complaint, filed on July 24, 1985, the plaintiffs alleged that the defendants had announced plans to build a motel and restaurant on Parcel A and in furtherance of that intent, had applied for a zoning variance and a modification of the applicable subdivision plan. Claiming that the defendants' actions imminently threatened to violate the restrictions and negative easements, the plaintiffs sought an injunction prohibiting the defendants from violating such restrictions and easements. Believing that the zoning variance applications would be heard and granted possibly by the end of that month, the plaintiffs applied for, and were granted, leave to take expedited discovery.

On July 17, 1985, one week after they filed their original answer and counterclaim, the defendants withdrew their applications for a zoning variance and to amend the subdivision plan. Defendants' stated reason for so doing was that any further action on their part should be deferred so long as the underlying legality of such actions was under challenge.

On August 13, 1985 the defendants filed an amended answer and counterclaim, in which they alleged that in 1984 Rosalind bought (and therefore now owns) Parcel A free and clear of the easements and restrictions alleged in the plaintiffs' complaint. In their second counterclaim, ³ the defendants affirmatively sought a declaratory judgment to the effect that they own Parcel A free and clear of all such easements and restrictions.

The defendants' self-imposed moratorium upon their plans to build a motel-restaurant set in motion as between the parties a somewhat remarkable about-face of litigating positions. Initially the plaintiffs sought an injunction. At present the plaintiffs no longer seek relief of any kind, and indeed would have the entire lawsuit dismissed. They claim that the defendants' moratorium has removed any threat of imminent harm, and with it, any need for injunctive relief. The defendants, on the other hand, claim that the plaintiffs have unjustifiably cast a cloud upon defendants' title to Parcel A. The defendants insist that unless the Court grants them prompt declaratory relief, they will be unable to exercise their ownership rights--for which they claim to have bargained and paid--to use their land free and clear of any restrictions and property interests running in favor of the plaintiffs. The defendants now want to prosecute their case vigorously; the plaintiffs insist that there is no longer any case to be prosecuted.

What brings this matter to a head procedurally is that the plaintiffs have moved to dismiss the defendants' counterclaim. The defendants resist the plaintiffs' motion, but they, in turn, have moved to dismiss the complaint. This is the decision on both dismissal motions.

I. The Plaintiffs' Contentions

The plaintiffs' basic proposition is that this Court lacks subject matter jurisidiction to entertain the counterclaim, and that alternatively, as a matter of discretion, the Court should decline to exercise such jurisdiction as it may have. In specific terms, the plaintiffs argue that the counterclaim does not present a controversy that is "justiciable" or "ripe" for adjudication. They contend that any declaratory relief would be hypothetical and advisory, and would not terminate the controversy. Plaintiffs also argue that in any event, even if the controversy were ripe for adjudication, it should not be heard in this court, but rather in the Superior Court where defendants have an adequate legal remedy. ⁴

By structuring their argument in this fashion, what the plaintiffs have done is blend together under a single heading ("jurisdiction") two separate concepts--subject matter jurisdiction and "ripeness"--which analytically are quite distinct and which, because of their distinctness, require separate treatment. "Subject matter jurisdiction" speaks to the power of a court to adjudicate a particular kind of controversy. In the case of the Court of Chancery, that power is limited to matters and causes in equity where there is no sufficient remedy by common law or statute, and to all other matters where jurisdiction is specifically conferred by statute. See 10 Del. C. §§ 341, 342. "Ripeness" or "justiciability," on the other hand, speaks to whether a given dispute lends itself to adjudication by any court. "Ripeness" is a shorthand reference to the concept that a controversy will not be adjudicated unless it involves truly adverse interests and actual rights. Controversies that are hypothetical and would result in only an advisory opinion, are not justiciable. Ackerman v. Stemerman, Del.Supr., 201 A.2d 173 (1964); Schneider v. Wilmington Trust Co., Del.Ch., 310 A.2d 897, 902, rev'd on other grounds, Del.Supr., 320 A.2d 709 (1973); Stabler v. Ramsay, Del.Ch., 88 A.2d 546, aff'd, Del.Supr., 89 A.2d 544 (1952); see also, FMC Corporation v. R.P. Scherer Corporation, Del.Ch., 545 F.Supp. 318 (1982).

Viewed from that perspective, the plaintiffs' argument is, in reality, two pronged: (1) the controversy is not ripe for adjudication by any court, but (2) even if it were ripe, this Court does not have subject matter jurisdiction. Those contentions are now addressed.

II. Ripeness

The plaintiffs argue that this controversy is not ripe, because any declaratory judgment rendered at this stage would be speculative, hypothetical, and advisory, since no matter how this Court might rule, it could not resolve the real dispute between the parties, and therefore, could not give effective relief. Plaintiffs reason thusly: even if the defendants were declared to own Parcel A free and clear of the disputed restrictions, they would still remain unable to build a motel-restaurant, unless they first obtained a zoning variance from the New Castle County Board of Adjustment and a modification of the subdivision plan from the County Planning Board. Both procedures would involve significant administrative hurdles, and would be accomplished, if at all, over the plaintiffs' vigorous opposition. Should one or both of the County administrative proceedings be resolved against the defendants, the counterclaim would be rendered moot and no decision by this Court would be necessary. That being the case, a decision by this Court on the counterclaim would be "hypothetical" and "advisory," unless the defendants would have first obtained the requisite zoning variance and subdivision plan modification. In this case those preconditions might never occur, because the defendants voluntarily withdrew their application for those administrative approvals. It therefore follows, plaintiffs argue, that the counterclaim must be dismissed either as a matter of law ⁵ or, at the very least, in the sound exercise of discretion under 10 Del. C. § 6506. ⁶

The difficulty with plaintiffs' argument is that it rests upon a contrived definition of the "controversy." Plaintiffs have chosen to define the controversy as being whether or not the defendants should be permitted to build a motel-restaurant on Parcel A. If that, in fact, were the issue, plaintiffs' position might stand on a sounder footing. Compare Wardrop Co. v. Fairfield Gardens, Inc., 237 App.Div. 605, 606, 262 N.Y.S. 95, 97 (N.Y.1933). However, that is not the controversy framed either by the complaint or by the counterclaim. Rather, the controversy, as defendants correctly point out, is whether they own Parcel A free and clear of the restrictions and negative easements under which the plaintiffs claim enforceable rights. The plaintiffs allege in their complaint that Parcel A is burdened by such restrictions. The defendants respond in their counterclaim that in 1984 they bought and paid for Parcel A as a fee simple purchase, free and clear of any such restrictions and without any notice thereof.

As thus viewed, the controversy between the parties is direct, clear and adverse, and a judicial resolution of that issue at this stage would be neither hypothetical nor advisory. The issue, simply put, is whether the defendants received the title they claim to have paid for when Rosalind purchased Parcel A from plaintiff L & N in 1984. That issue is clearly justiciable. To illustrate by way of a hypothetical, suppose that in 1984, after signing a contract to sell Parcel A in fee simple, L & N had tendered not the deed actually delivered to Rosalind in this case, but rather a deed that contained all of the restrictions alleged in the complaint and disputed in the counterclaim. The resulting controversy would have been justiciable at that point, because the defendants would have been entitled immediately to commence an action for specific performance, to compel L & N to deliver a deed containing none of the disputed restrictions.

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