Vivian v. Town of Dewey Beach, C.A. No. 1083-S (Del. Ch. 6/8/2006)

• Decision Date: 08 June 2006
• Docket Number: C.A. No. 1083-S.
• Parties: VIVIAN AND ROBERT C. BARRY, JOSEPH W. AND MARY NELSON, and ROBERT M. FITZGERALD, Plaintiffs, v. THE TOWN OF DEWEY BEACH, AND COMMISSIONERS OF THE TOWN OF DEWEY BEACH, PATRICIA F. WRIGHT, ELLEN MAYHEW, ALICE WALSH, and DALE H. COOKE, Defendants, and DEWEY BEACH SUITES, LLC, Intervenor-Defendant.
• Court: Court of Chancery of Delaware

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VIVIAN AND ROBERT C. BARRY, JOSEPH W. AND MARY NELSON, and ROBERT M. FITZGERALD, Plaintiffs, v. THE TOWN OF DEWEY BEACH, AND COMMISSIONERS OF THE TOWN OF DEWEY BEACH, PATRICIA F. WRIGHT, ELLEN MAYHEW, ALICE WALSH, and DALE H. COOKE, Defendants, and DEWEY BEACH SUITES, LLC, Intervenor-Defendant.

C.A. No. 1083-S.

Court of Chancery of Delaware, Sussex County.

Date Submitted: January 11, 2006.

Date Decided: June 8, 2006.

Courtney Riordan, Esquire of Dewey Beach, Delaware, Attorney for Plaintiffs.

Robert V. Witsil, Jr., Esquire of Robert A. Witsil, Jr., P.A., Georgetown, Delaware, Attorney for Defendants.

Stephen W. Spence, Esquire and Melissa E. Cargnino, Esquire of Phillips Goldman & Spence, P.A., Dewey Beach, Delaware, Attorneys for Intervenor-Defendant Dewey Beach Suites, LLC.

MEMORANDUM OPINION

NOBLE, Vice Chancellor

Plaintiffs Vivian Barry, Robert C. Barry, Joseph W. Nelson, Mary Nelson, and Robert M. Fitzgerald seek a declaratory judgment ruling invalid a conditional use ordinance enacted by Defendant Town of Dewey Beach (the "Town"). The Plaintiffs additionally seek injunctive relief prohibiting the approval of permits pursuant to the challenged ordinance. Also named as defendants in this action are Town Commissioners Patricia Wright, Dale H. Cooke, Ellen Mayhew, and Alice Walsh.¹ Intervenor-Defendant Dewey Beach Suites, LLC ("DBS"), a motel owner expecting to benefit because of the ordinance, was granted leave to intervene under Court of Chancery Rule 24(a)(2).

Before the Court are cross-motions for summary judgment. Because the Plaintiffs have not demonstrated that they have standing to pursue their claims, their action must be dismissed.

I. FACTS

On December 28, 2004, the Town Commissioners adopted Ordinance No. 523 (the "Ordinance"),² creating a conditional use classification to allow for the conversion of existing hotels and motels to condominiums within the Town's Resort Residential ("RR") and Resort Business ("RB") zoning districts. Hotels and motels are no longer deemed permitted uses in the Town; thus, any hotel or motel is a non-conforming use.³

Condominiums are a permitted use under the Town Code. Section 2-202 of the Town Code includes condominiums in its definition of "multi-family dwellings."⁴ Sections 14-502.2⁵ and 14-503.2⁶ provide that "multi-family dwellings" are among the "permitted uses" for the RR- and RB-zoning districts, respectively. Multi-family dwellings are required to comply with certain zoning requirements, including those for area, bulk, density, and parking.⁷ In order to convert hotels and motels to condominiums under the Town's permitted-use zoning regime (i.e., to multi-family dwellings), the properties must conform to the restrictions placed on such uses by the Town Code (i.e., the relevant area, bulk, density, and parking requirements).⁸

The Town Code also sets forth the Town's conditional use authority. Section 14-801 explains the purpose of conditional uses:

The purpose of this Subchapter [authorizing conditional uses] is to provide for certain uses which cannot be well adjusted to their environment in particular locations with full protection offered to surrounding properties by rigid application of the district regulations. These uses are generally of a public or semi-public character and are essential and desirable for the general convenience and welfare, but because of the nature of the use, the importance of relationship [sic] to the Comprehensive Plan, and possible impact, not only on neighboring properties, but on a large section of the Town, require the exercise of planning judgment on location and site plan.

Although the Ordinance sets forth certain minimal requirements for hotels and motels converting under a conditional use permit,⁹ it expressly exempts conversions proceeding under the Ordinance from most, if not all, of the restrictions otherwise applicable to multi-family dwellings under the Town Code (including those requirements imposed on new or existing condominiums built as permitted uses).¹⁰ From among the requirements for conversion made less restrictive under the conditional use scheme, the Plaintiffs point to significant changes in applicable density requirements. Their Verified Complaint (the "Complaint") alleges:

The most notable departure . . . from the current requirements of the Code is the recommendation for a minimum square footage of 750 square feet per condominium unit. This square footage allows for a dwelling unit density that is more than four times higher that [sic] the Code allows for permitted use condominium/multi-family dwellings.¹¹

The significant effect of the Ordinance is that it purports to authorize the conversion of motels and hotels to condominiums, a conversion that in many — if not all — instances could not be accomplished if hotels and motels were to convert to condominiums as permitted uses instead of conditional uses under the Ordinance, because they would be unable feasibly to comply with the area, bulk, density, and parking requirements otherwise required of multi-family dwellings.¹²

* * *

Before the Town Commissioners approved the Ordinance which facilitated the conversion of hotels and motels to condominiums, the question was referred to the Town's Planning and Zoning Commission. The Planning and Zoning Commission held public hearings on August 18, October 12, and November 10, 2004, at which the initial draft ordinance was reviewed.¹³ An opportunity for public comment was provided at the August 18 and October 12 meetings. Plaintiffs' counsel was among those who offered comments at the October 12 meeting. Only the initial draft of the ordinance was available for review at those meetings.

The Planning and Zoning Commission revised the initial draft of the ordinance to incorporate its recommendations. The commission voted, at the conclusion of November 10, 2004 meeting, unanimously in favor of recommending approval of the ordinance, as modified.

Next, the Town Commissioners held a special meeting on December 28, 2004, to consider the proposed ordinance.¹⁴ The public had the opportunity to comment at this meeting. Several comments were made and letters from the public were entered into the record. The Town Commissioners made minor changes to the Planning and Zoning Commission's draft of the Ordinance, and then voted four to one to adopt the amended draft as Ordinance No. 523. Plaintiffs' attorney, who also served as a Commissioner (and now is the Town's Mayor), cast the lone dissenting vote. Following adoption of the Ordinance, notice was published in the Cape Gazette and the Delaware Coast Press on January 14, 2005.

DBS has proceeded with conversion of a motel to condominiums pursuant to the Ordinance.

II. CONTENTIONS

In the Complaint, the Plaintiffs set forth what amounts to a claim that enactment of the Ordinance was an improper exercise of the Town's conditional use authority under its enabling ordinance for conditional use zoning.¹⁵ Specifically, the Plaintiffs contend that the Ordinance is not consistent with the purposes for which the Town may employ its conditional use authority and that it establishes as a conditional use a use that is not a "type of use eligible for classification as a conditional use" since that use is already a permitted use.¹⁶ The Plaintiffs' challenge centers around two aspects: (1) the Ordinance allows as a conditional use a use (condominiums) that is a permitted use in the district, and (2) the Ordinance reduces, instead of enhancing, the "conditions" with which hotel and motel owners must comply in order to convert their properties to condominiums.¹⁷ It is without doubt that these facts present, at the very least, an unusual exercise of a municipality's conditional use power. It appears from the Complaint that the Plaintiffs also argue that the Town had a duty to create a record setting forth its reasons for adopting the Ordinance, including the reasons for why the Ordinance satisfied the purposes for adoption of such ordinances enumerated in the Town Code.¹⁸ The Plaintiffs evidently argue that the Town failed to create the necessary record supporting its legislative act.¹⁹

The Plaintiffs' Opening Brief purports to assert a number of additional grounds for relief that the Plaintiffs "realized as a result of preparation for [their Opening Brief]. . . ."²⁰ It appears that the Plaintiffs seek to present three principal, additional claims.²¹ First, the Plaintiffs claim that the Ordinance "violates the delegation requirements of" 22 Del.C. § 302, which provides, inter alia, that a municipality's zoning regulations "shall be uniform for each class or kind of buildings throughout each [zoning] district but the regulations in 1 district may differ from those in other districts."²² It has been said that this category of claim amounts to a type of statutory equal protection challenge.²³ Second, the Plaintiffs assert that the Ordinance improperly conflicts with the Town's Comprehensive Plan. Third, they argue that the Planning and Zoning Commission failed to have present a final draft of the Ordinance at its second meeting and thereby violated the requirement that it hold public hearings with an opportunity for public comment with respect to the proposal. This claim is separately addressed in some detail, below. Defendants, the Town and Commissioners, resist the Plaintiffs' claims on their merits. DBS contends that the Plaintiffs lack standing to bring this action.

III. ANALYSIS

A. The Standard for Summary Judgment

The parties have filed cross-motions for summary judgment. "Under Court of Chancery Rule 56, summary judgment may be granted only when there are no issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. When deciding a motion for summary judgment, the Court must view the facts in the light most favorable to the nonmoving party and the moving party has the burden of demonstrating that no material question of...