Pike Creek Recreational Servs., LLC v. New Castle Cnty.

• Decision Date: 18 August 2020
• Docket Number: C.A. No. N19C-05-238 PRW
• Citation: 238 A.3d 208
• Parties: PIKE CREEK RECREATIONAL SERVICES, LLC, a Delaware limited liability company, Plaintiff, v. NEW CASTLE COUNTY, a Political Subdivision of the State of Delaware, Defendant.
• Court: Delaware Superior Court

238 A.3d 208

PIKE CREEK RECREATIONAL SERVICES, LLC, a Delaware limited liability company, Plaintiff,

v.NEW CASTLE COUNTY, a Political Subdivision of the State of Delaware, Defendant.

C.A. No. N19C-05-238 PRW

Superior Court of Delaware.

Submitted: August 3, 2020

Decided: August 18, 2020

David A. White, Esquire, and Matthew J. Rifino, Esquire, MCCARTER & ENGLISH, LLP, Wilmington, Delaware, Attorneys for Plaintiff Pike Creek Recreational Services, LLC.

Max B. Walton, Esquire, and Lauren P. Deluca, Esquire, CONNOLLY GALLAGHER, LLP, Newark, Delaware, Attorneys for Defendant New Castle County.

OPINION

WALLACE, J.

For the last six decades, a large swathe of land in New Castle County ("the County"), originally called the Mill Creek Hundred, has been under development as the Pike Creek Valley. Pike Creek Recreational Services, LLC ("PCRS") is the owner of the last remaining significant patch of undeveloped land in the Pike Creek Valley, consisting of 179.28 acres.¹

The parties are currently involved in other litigation before the undersigned—a consolidated action containing the County's suit in the Court of Chancery and PCRS's mandamus action filed here ("Prior Action").² In the course of that case, the Court found that the applicable deed restrictions require setting aside at least 130 acres of PCRS's land designated for a golf course, though did not mandate PCRS actually operate such a course.³

Following that ruling, the parties agreed to stay the Prior Action to permit PCRS to develop a mutually acceptable plan for the development of its land.⁴ Their attempts foundered, after more than two years, on their irreconcilable interpretations of the obligations created by the interaction between a restrictive covenant operating on the land (the "Covenant") and the Uniform Development Code (the "UDC") regulating land use and zoning throughout the County.⁵ Their ongoing negotiations to resolve the Prior Action have in turn halted while they await a binding ruling resolving that dispute through this lawsuit.⁶

I. PARTIES' POSITIONS

The parties each ask the Court to issue a declaratory judgment determining how a current UDC provision addressing prior restrictive covenants ("Section 1.150")⁷ operates on the overlap of the Covenant's housing cap and the UDC's density limitations. PCRS believes that under Section 1.150, the Covenant's housing cap displaces the UDC's density limitations. The County believes development in the Pike Creek Valley must satisfy both simultaneously.

II. PRIOR RULINGS ON THESE MOTIONS

The parties raised two other arguments in their cross-motions. PCRS claimed that it possessed a vested development right⁸ in accordance with the standard the Delaware Supreme Court promulgated in In re 244.5 Acres of Land .⁹ The County countered that because PCRS had never raised the Section 1.150 issue in the Prior Action or elsewhere, laches barred enforcement of PCRS's interpretation of the UDC even if it is correct.¹⁰ The Court separately considered these arguments, and rejected both in an earlier bench ruling.¹¹

As the Court explained, a developer who takes actions reliant on then-existing zoning rules to advance a particular development can, if the circumstances warrant under a balancing test,¹² accrue a vested right to have the development evaluated under those rules notwithstanding an intervening change in law.¹³ But PCRS is not seeking exemption from some change in law that arose since its development efforts began in 2010.¹⁴ Rather, PCRS seeks to avoid application of UDC density restrictions enacted years before it took ownership or began development efforts.¹⁵ The vested rights doctrine is inapplicable here.

The County's reliance on laches is likewise misplaced. "The equitable doctrine of laches prevents a plaintiff from exercising unreasonable delay in bringing an action when that delay prejudices a defendant's rights."¹⁶ But as this Court has frequently observed, the Superior Court is "a court of law—not equity"¹⁷ and therefore "lacks jurisdiction to consider the laches and unclean hands defenses."¹⁸ A judge of this Court can consider laches only in narrow contexts, such as when conducting appellate review of the decision of an administrative agency that can itself consider laches,¹⁹ or when cross-designated with the Court of Chancery.²⁰

"Delaware proudly guards the historic and important distinction between legal and equitable jurisdiction," and cross-designation to sit as both a court of law and equity is a "very rare departure" through which a judge of this Court occasionally derives "fleeting equitable powers."²¹ But even then, there remains a firm divide.

When a judge of this Court is cross-designated, he or she exercises the powers of a judge at law on the legal (Superior Court) claims and the powers of a judge in equity on the equitable (Court of Chancery) claims. And while the County suggested otherwise, that "fleeting power" does not extend from the Prior Action—where this judge is cross-designated—to the present case, a separate and distinct suit at law for declaratory judgment. So the Court is without jurisdiction to consider laches here.

III. APPLICABLE LEGAL STANDARDS

The parties have stipulated that this particular foray in their legal battle presents solely issues of law and that they could, therefore, engage immediately via cross-motions for summary judgment without discovery.²² That means the parties have agreed they have no dispute as to any material fact here. With that agreement, the only remaining questions are those of statutory and contract interpretation.²³ Both topics are solely questions of law for the Court to decide.²⁴

"Where cross-motions for summary judgment are filed and neither party argues the existence of a genuine issue of material fact, ‘the Court shall deem the motions to be the equivalent of a stipulation for decision on the merits based on the record submitted with the motions.’ "²⁵ And a matter should be disposed of by summary judgment whenever only a question or questions of law remain and a trial is unnecessary.²⁶ The matter is therefore ripe for judgment as a matter of law.

The standards for interpreting statutes and contracts are similar. "Clear and unambiguous language in [a contract] should be given its ordinary and usual meaning."²⁷ Likewise, "[t]hat clear and unambiguous language in a statute is ordinarily the conclusive evidence of legislative intent is an elementary rule."²⁸ Delaware applies equivalent interpretive rules in the statutory and contractual contexts, refusing to enforce highly literal readings that lead to absurd results²⁹ and ending their inquiry to the exclusion of extrinsic evidence when unambiguous language makes the meaning of the contract or statute plain.³⁰

IV. FACTUAL BACKGROUND

Delaware courts have addressed various aspects of Pike Creek Valley's development on any number of occasions.³¹ So the Court provides only an updated Reader's Digest version of that history here.

In 1964 four large landowners resolved to develop the Pike Creek Valley "pursuant to a comprehensive master plan, applying the principles of a planned unit development."³² To further this goal, they then entered in to a deed restriction ("1964 Agreement") imposing restrictions on the subject acreage in concert with the County's zoning authority making certain changes to the applicable zoning laws to enable development in accordance with that master plan.³³ In 1969, those landowners—with the County's approval granted the following year—added amendments ("1969 Agreement"), which together comprise the Covenant.³⁴ The 1969 Agreement expanded the land covenanted to 1,363.58 acres.³⁵

PCRS later acquired a portion of the land, and the Prior Action relates to permissible development activities on that land. For the parties' negotiations during the stay in the Prior Action, PCRS assembled a working group involving some local residents.³⁶ With the input of that working group, PCRS drafted and submitted a proposed development plan and deed restriction change to the County's Land Use and Planning Board ("Board").³⁷ The deed restriction change envisions replacing the golf course set-aside with a semi-private open space, while the development plan contemplates building slightly more than 220 housing units on the remaining land.³⁸

The Board recommended denial, stating in relevant part that, less the set-aide, PCRS's property contains "approximately 47 developable acres, upon which approximately sixty (60) housing units could be built" consistent with the UDC.³⁹ The Board also recommended rejecting a deed restriction change, citing a number of problems with the semi-private open space plan not implicated in this suit.⁴⁰

The original landowners created the Covenant to "develop the aforesaid acreage under and pursuant to a comprehensive master plan."⁴¹ The County is the beneficiary through its predecessor, the Levy Court.⁴² The Covenant lasts "until the last dwelling unit is constructed on the SUBJECT ACREAGE within the permissible limits."⁴³

The 1964 Agreement includes the pledge that "not more than 4,500 family dwelling units will be constructed or erected on the SUBJECT ACREAGE,"⁴⁴ a total raised in the 1969 Agreement to 5,454.⁴⁵

The Covenant ends by stating that "in the event that provision shall be made in the applicable zoning law for planned unit development districts or similar types of zoning law the SUBJECT ACREAGE may be appropriately zoned thereunder, provided that such rezoning would permit DEVELOPERS to accomplish all of the aspects of the preliminary, tentative comprehensive plan and of the updated master plan and would not be more restrictive than the limitations imposed upon DEVELOPER by the terms of this agreement."⁴⁶

V. DISCUSSION

This case is unusual in that the matter at issue is not whether the Covenant prohibits or permits a particular land use. The barrier to the contemplated development lies in the UDC, not the Covenant. Instead, PCRS seeks to supplant certain UDC...