Wild Quail Golf & Country Club Homeowners' Association, Inc. v. Mark Gary Babbitt and Lucienne Carter Babbitt

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
PATRICIA W. GRIFFIN CHANCERY COURTHOUSE
MASTER IN CHANCERY 34 The Circle
GEORGETOWN, DELAWARE 19947
Date Submitted: April 7, 2021
Draft Report: May 19, 2021
Final Report: June 3, 2021
Gary R. Dodge, Esquire
Curley, Dodge, Fitzgerald & Funk, LLC
250 Beiser Boulevard, Suite 202
Dover, Delaware 19901
Peter K. Schaeffer, Jr., Esquire
Avenue Law
1073 South Governors Avenue
Dover, Delaware 19904
RE: Wild Quail Golf & Country Club Homeowners’ Association, Inc. v. Mark
Gary Babbitt and Lucienne Carter Babbitt
C.A. No. 2019-0768-PWG
Dear Counsel:
Pending before me is an action by a homeowners’ association to enforce
deed restrictions under 10 Del. C. §348. The homeowners constructed an addition
to their house, which the association alleges violates the deed restrictions because
the color of the addition’s roof did not conform to the plans submitted to the
association, or to the conditional approval granted by the association. I
recommend the Court deny the homeowners’ motion for summary judgment
because there are material facts in dispute concerning whether the association
applied the deed restrictions’ standard reasonably in imposing its conditional
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approval, and it is desirable to inquire more thoroughly into the facts to clarify the
application of the law to the circumstances. This is a final report. 1
I. Background
On September 23, 2019, Plaintiff Wild Quail Golf & Country Club
Homeowners’ Association, Inc. (“the Association”) filed a complaint against
Defendants Mark and Lucienne Babbitt (“the Babbitts”) asserting that the Babbitts
violated the Wild Quail Golf & Country Club development (“Wild Quail”)’s
Declaration of Restrictions (“Restrictions”) related to the addition (“Addition”)
they built on their property (“Property”) located at 57 Teal Lane, Camden-
Wyoming, Delaware. 2 Prior to building the Addition, the Babbitts submitted plans
for the Addition to the Association’s Architectural Committee (“AC”) as required
by the Restrictions, including drawings dated March 7, 2018.3 On March 10, 2018,
the AC sent an email to the Babbitts and their contractor entitled “Final approval,”
which imposed a number of conditions as a part of its approval, including the
condition at issue here – that “[t]he roof color must match as closely as possible to
the existing metal roof on the residence” (“Roof Condition”).4 The Association
1
This report makes the same substantive findings and recommendations as my May 19,
2021 draft report, to which no exceptions were filed.
2
Docket Item (“D.I.”) 1.
3
Id., ¶ 12; Ex. E.
4
Id., Ex. F.
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argues that the roof on the Addition, as constructed, fails to conform to its
conditional approval or to the Addition’s plans, which depicted a dark color roof.5
The Association asks that the Court direct the Babbitts to modify the addition to
conform to the conditional approval, and award attorneys’ fees under 10 Del. C.
§348.
On October 22, 2019, the Babbitts filed an answer denying the Association’s
claims and seeking judgment in their favor and attorneys’ fees. 6 The case was
dismissed on December 21, 2020 for lack of prosecution.7 The Association’s
January 20, 2021 motion to reopen the case was granted on January 27, 2021. 8
On March 2, 2021, the Babbitts filed a motion for summary judgment
contending that the Association has not met its burden of proof regarding the
applicable Restrictions’ enforceability and the reasonableness of the AC’s actions. 9
The Association’s April 1, 2021 response claims that color is an essential aspect of
5
Id., ¶¶ 12, 13, 15.
6
D.I. 5.
7
D.I. 9.
8
D.I. 14.
9
D.I. 17, Resp’ts’ Opening Br. in Supp. of its Mot. for Summ. J. (“Resp’ts’ Opening
Br.”), at 11; D.I. 20, Resp’ts’ Reply Br. in Supp. of its Mot. for Summ. J., at 2-3.
3
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architectural review, and that the Babbitts defied the Restrictions by failing to
abide by the architectural review process. 10
II. Standard for Review
Under Court of Chancery Rule 56, the court grants a motion for summary
judgment when “the moving party demonstrates the absence of issues of material
fact and that it is entitled to a judgment as a matter of law.”11 The moving party
bears the burden of demonstrating that no material issues of fact are in dispute and
that it is entitled to judgment as a matter of law. 12 Once the moving party has
satisfied that burden, it falls on the non-moving party to show that there are factual
disputes. Evidence must be viewed “in the light most favorable to the non-moving
party.”13 Summary judgment may not be granted when material issues of fact exist
10
D.I. 19, Pet’r’s Answering Br. in Opp’n to Resp’ts’ Mot. for Summ. J. (“Pet’r’s
Answering Br.”), at 3-4, 29-31.
11
Wagamon v. Dolan, 2012 WL 1388847, at *2 (Del. Ch. Apr. 20, 2012); see also Pine
River Master Fund Ltd. v. Amur Fin. Co., Inc., 2017 WL 4023099, at *6 (Del. Ch. Sept.
13, 2017) (citation omitted); Cincinnati Bell Cellular Sys. Co. v. Ameritech Mobile Phone
Serv. of Cincinnati, Inc., 1996 WL 506906, at *2 (Del. Ch. Sept. 3, 1996), aff’d, 692 A.2d
411 (Del. 1997).
12
Cain v. Sussex Cty. Council, 2020 WL 2122775, at *6 (Del. Ch. May 4, 2020);
Dieckman v. Regency GP LP, 2019 WL 5576886, at *11 (Del. Ch. Oct. 29, 2019)
(citation omitted); Wagamon, 2012 WL 1388847, at *2.
13
Williams v. Geier, 671 A.2d 1368, 1389 (Del. 1996) (citing Merrill v. Crothall-
American, Inc., 606 A.2d 96, 99 (Del. 1992)); see also Pine River Master Fund Ltd.,
2017 WL 4023099, at *6 (citation omitted).
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or if the Court determines that it “seems desirable to inquire more thoroughly into
the facts in order to clarify the application of law to the circumstances.”14
III. Analysis
Deed restrictions requiring approval of an association, or its architectural
committee, before a homeowner can erect a structure on her property, are
enforceable if they articulate “a clear, precise and fixed standard the reviewing
body must apply.”15 However, such restrictions “are viewed with suspicion due to
the tendency of such review to be arbitrary, capricious and therefore
unreasonable,” and are strictly construed.16 If a restriction is “vague, imprecise, or
unclear, the grant of authority normally is not enforceable.” 17 And, in reviewing
requests under the restrictions, an association or its architectural committee cannot
unreasonably withhold approval, and “any doubts as to [the architectural review
14
Williams, 671 A.2d at 1388-89; see also Ebersole v. Lowengrub, 180 A.2d 467, 470
(Del. 1962); In re Estate of Turner, 2004 WL 74473, at *4 (Del. Ch. Jan. 9, 2004)
(citation omitted).
15
Benner v. Council of Narrows Ass’n of Owners, 2014 WL 7269740, at *1 (Del. Ch.
Dec. 22, 2014), adopted, (Del. Ch. Mar. 16, 2015); see also Lawhon v. Winding Ridge
Homeowners Ass’n, Inc. [hereinafter “Lawhon”], 2008 WL 5459246, at *5 (Del. Ch. Dec.
31, 2008); Seabreak Homeowners Ass’n, Inc. v. Gresser , 517 A.2d 263, 269 (Del. Ch.
1986), aff’d, 538 A.2d 1113 (Del. 1988).
16
Benner, 2014 WL 7269740, at *7; see also Tusi v. Mruz, 2002 WL 31499312, at *3
(Del. Ch. Oct. 31, 2002) (“because [architectural review restrictions] restrict the ‘free use
of property,’ restrictive covenants must be strictly construed”).
17
Benner, 2014 WL 7269740, at *7; Seabreak, 517 A.2d at 269.
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function’s] reasonableness must be resolved in favor of the landowners.”18
Although restrictions “based on abstract aesthetic desirability are impermissible,”19
deed restrictions allowing for denial based on lack of visual harmony “can be
upheld if there is a reasoned, non-arbitrary basis for the reviewing authority to
assess whether a proposal would disrupt the visual harmony of the affected
community.” 20
Here, the Babbitts contend that the Restrictions require only that exterior
colors be “soft tones” and that the Roof Condition is arbitrary enforcement. 21 The
Association asserts that the Roof Condition was “clear, objective and consistent
with the AC’s commitment to have the exterior of additions match the original
structure.”22 It further asserts that “[c]onsideration of color is essential in
architectural review,” and this dispute is “only peripherally about color,” because
the Babbitts acted in defiance of the Restrictions by failing to abide by the
architectural review process (by ordering materials before submitting the
18
Seabreak, 517 A.2d at 268; see also Dolan v. Villages of Clearwater Homeowner’s
Ass’n, Inc., 2005 WL 2810724, at *4 (Del. Ch. Oct. 21, 2005) (“Under Delaware law, a
deed that conditions the right to make improvements on the permission of a developer or
Review Board is enforceable but permission must not be withheld unreasonably and the
burden is on the Review Board to show its actions are reasonable.”).
19
Lawhon, 2008 WL 5459246, at *5.
20
Dolan, 2005 WL 2810724, at *4.
21
Resp’ts’ Opening Br., at 11.
22
Pet’r’s Answering Br., at 26.
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Addition’s plans, which depicted a darker roof color than as completed, and by
rushing the process).23
The central issues here are whether the Restrictions provide clear, precise
and fixed standards for the AC to apply, and whether the AC acted reasonably in
imposing the Roof Condition.24
Section 2 of Article II of the Restrictions requires submission of plans for
additions on properties in Wild Quail that describe “exterior materials and their
color,” and receipt of AC approval prior to construction of an addition. 25 The third
paragraph in Section 2 (“Third Paragraph”) states:
In passing upon such plans and specifications the Committee may take
into consideration the suitability of the proposed building or other
structure and of the materials of which it is to be built, to the site upon
which it is proposed to erect same, the harmony thereof with the
23
Id., 3-4, 29-31.
24
The Association argues that the Babbitts’ alleged lack of candor and failure to comply
with the review process is an important issue in this case. Id., at 3. Because caselaw
establishes the approach by which the Court determines whether deed restrictions, and
the architectural review committee’s decisions, are enforceable, the Babbitt’s actions are
only relevant if they affected the reasonableness of the AC’s review process. And, since
there are material issues of fact in dispute whether the AC’s conditional approval was
reasonably imposed, this claim remains in dispute.
25
D.I. 1, Ex. A., Art. II, §2. The first paragraph in §2 is inartfully drafted (“No . . .
addition shall hereafter be erected, altered or placed on any Lot unless the plans have
been approved by the construction or alteration of a building or structure or addition shall
submit two (2) sets of plans . . . The Architectural Committee shall approve or disapprove
said plans within thirty (30) days of receipt of same”). Reading §2 as a whole, it is
evident that the AC is responsible for approving submitted plans.
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surroundings and the effect of the buildings or other structure as
planned on the outlook from the adjacent or neighboring properties.26
“The proper construction of [the operation of] a contract . . . is purely a
question of law, as is the proper interpretation of specific contractual language.”27
Interpreting deed restrictions is a matter of contract interpretation and provisions
are construed by determining original intent from the plain and ordinary meaning
of the words.28 Under Delaware caselaw, contracts are read “as a whole,” “so as
not to render any part of the contract mere surplusage,” or to “render a provision or
term ‘meaningless or illusory.’”29 The Court “ascribes to the words their common
or ordinary meaning, and interprets them as would an objectively reasonable third-
party observer.” 30 It is well-established that Delaware courts can look to
dictionaries for assistance in determining the intended meaning of contract terms.31
26
Id.
27
Wenske v. Blue Bell Creameries, Inc., 2018 WL 3337531, at *10 (Del. Ch. July 6,
2018), reargument denied, 2018 WL 5994971 (Del. Ch. Nov. 13, 2018) (internal
quotation marks and citations omitted).
28
See New Castle Cty. v. Pike Creek Recreational Servs., LLC, 82 A.3d 731, 747 (Del.
Ch. 2013), aff’d, 105 A.3d 990 (Del. 2014); Benner v. Council of Narrows Ass’n of
Owners, 2014 WL 7269740, at *8 (Del. Ch. Dec. 22, 2014), adopted, (Del. Ch. Mar. 16,
2015); Pues v. Simpson, 2009 WL 1451853, at *2 (Del. Ch. May 26, 2009).
29
Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010) (citations omitted);
see also Ray Beyond Corp. v. Trimaran Fund Mgmt., LLC, 2019 WL 366614, at *5 (Del.
Ch. Jan. 29, 2019).
30
Lawhon, 2008 WL 5459246, at *6 (Del. Ch. Dec. 31, 2008) (citations omitted).
31
Cf. Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 738 (Del. 2006)
(“dictionaries are the customary reference source that a reasonable person in the position
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Deed restrictions are “construed in accordance with their plain meaning in favor of
a grantee [such as a homeowner] and against a grantor [such as a homeowners’
association].” 32
Looking at the plain language of the Restrictions, the Third Paragraph
specifies that the AC can consider the “suitability of the proposed building or other
structure and of the materials” to the site [“Suitability Standard”] and whether the
structure will be harmonious with its surroundings and adjacent or neighboring
properties [“Harmony Standard”].33 The Harmony Standard is similar to standards
in other deed restrictions that have been upheld by courts so long as the community
possesses a “sufficiently coherent visual style” and the standard is fairly applied
based upon that style.34
of a party to a contract would use to ascertain the ordinary meaning of words not defined
in the contract”).
32
Cf. Serv. Corp. of Westover Hills v. Guzzetta, 2009 WL 5214876, at *3 (Del. Ch. Dec.
22, 2009) (internal quotation marks and citations omitted).
33
The Suitability Standard is not at issue here since the AC’s approval was conditioned
on the Addition’s roof color and not on the suitability of the Addition and its materials to
the site, or its spatial location.
34
Cf. Lawhon, 2008 WL 5459246, at *5 (Del. Ch. Dec. 31, 2008) (citations omitted)
(“[C]ourts regularly enforce architectural review provisions designed to ensure the
overall harmony of appearance within a community, when that community
possesses a ‘sufficiently coherent visual style’ enabling fair and even-handed
application.”); Dolan v. Villages of Clearwater Homeowner’s Ass’n, Inc., 2005 WL
1252351, at *6 (Del. Ch. May 12, 2005) (holding that actions by an architectural review
board “based on purely objective criteria are permissible, actions based on purely
subjective criteria (aesthetics) are not”); Welshire Civic Ass’n, Inc. v. Stiles, 1993 WL
488244, at *3 (Del. Ch. Nov. 19, 1993); Point Farm Homeowner’s Ass’n, Inc. v. Evans,
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Therefore, AC actions taken under the Harmony Standard may be
enforceable if the required conditions are met. The Roof Condition, however,
focuses on the color of the Addition’s roof and the Harmony Standard does not
mention color. Exterior color is addressed in the fifth paragraph of Section 2 of
Article II of the Restrictions (“Color Standard”), which provides: “The exterior
colors shall be within the group of colors knows[sic] as soft tones. Any other
colors must be approved by the Architectural Committee.”35 In other words, the
use of soft tones for exterior colors is allowed without the approval of the AC, and
AC approval of exterior colors is required only if soft tones are not used.
To be upheld, the Color Standard must present clear, precise and fixed
standards of application. I consider the plain and ordinary meaning of “the group
of colors know[n] as soft tones.”36 Since soft tones are not defined in the
Restrictions, I look to dictionaries for assistance in determining the meaning of soft
tones. “Soft” means “not bright or glaring: subdued,” 37 while “tone” is defined as
1993 WL 257404, at *3 (Del. Ch. June 28, 1993) (holding that the association acted
unreasonably based upon a purely aesthetic judgment, when it rejected the use of vinyl
siding by a homeowner as disharmonious with the “predominantly forested”
neighborhood).
35
D.I. 1, Ex. A., Art. II, §2.
36
Id.
37
Soft, Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/soft
(last visited June 1, 2021).
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“a tint or shade of color.” 38 Considering those together, soft tones mean subdued
tints or shades of colors. Therefore, the Color Standard does not restrict the
color itself but requires that the color not be bright or glaring. This standard can
be applied objectively and is reasonably ascertainable. 39
However, the Color Standard does not denote a specific standard for the AC
to apply if the exterior color is not a soft tone. Reading Section 2 as a whole, it is
reasonable to conclude that the Restrictions intend that the AC apply the Harmony
Standard when it reviews exterior colors that are not soft tones since, consistent
with other language in Section 2, the AC would be “passing on plans and
specifications” that address color. 40 So, when colors in soft tones are not used, the
AC may evaluate exterior colors based upon whether the colors will harmonize
with surroundings and adjacent or neighboring properties. This interpretation
gives effect to all of the Color Standard’s language. In contrast, if the AC
38
Tone, Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/tone
(last visited June 1, 2021).
39
The Babbitts argue that the use of “tone” with “soft” as a modifier “appears to be
determined on aesthetic perception.” Resp’ts’ Opening Br., at 4. I decline to conclude
that an AC decision on soft tone colors is, per se, based upon purely aesthetical
considerations. “An individual’s, or a committee’s, opinion of what is tasteful does not
constitute an objectively fair and reasonably ascertainable standard. Nevertheless,
decisions may be influenced by aesthetic considerations while still subject to objective
standards.” Lawhon, 2008 WL 5459246, at *5 (Del. Ch. Dec. 31, 2008). Whether a color
is subdued and a soft tone does not need to be based on personal taste and may be
decided objectively.
40
D.I. 1, Ex. A., Art. II, §2.
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considers exterior colors in every instance, the Color Standard is rendered
meaningless because its automatic approval of soft tones is lost. Therefore, when
colors in soft tones are used, exterior colors are not considered as a part of the
AC’s harmony of appearance analysis. When soft tone colors are not used,
exterior colors may be considered under the Harmony Standard. Although
complicated, this approach offers clear, precise and fixed standards for the AC to
apply.
Next, I consider whether the AC reasonably applied these standards, and
whether it concluded that the roof color was not a soft tone as specified in the
Color Standard, and applied the Harmony Standard fairly in imposing the Roof
Condition. The determination whether the AC’s “exercise of [its approval]
authority [is] reasonable . . . necessarily turns on the facts of the situation at hand.41
At this stage, I find the evidence is insufficient for me to determine whether the
AC’s actions were reasonable.
The AC’s final approval provides only the statement that the “roof color
must match as closely as possible to the existing metal roof on the residence,” and
41
Dolan v. Villages of Clearwater Homeowner’s Ass’n, Inc., 2005 WL 1252351, *7 (Del.
Ch. May 12, 2005); Benner v. Council of Narrows Ass’n of Owners, 2014 WL 7269740,
at *10 (Del. Ch. Dec. 22, 2014), adopted, (Del. Ch. Mar. 16, 2015) (“Typically, the
reasonableness of a decision of this nature would appear to be a disputed issue of fact
requiring the Court to hear testimony from the witnesses.”).
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does not address whether the Addition’s roof color is a soft tone.42 In its
answering brief, the Association contends that, in approving the Addition, the AC
believed that the Addition’s roof color “would appear as though the roof was a part
of the original structure,” and would match “the pre-existing section of the metal
roof on the rear of the home.” 43
Since the AC imposed the Roof Condition as a part of its approval, it either
concluded that the roof color was not a soft tone, without indicating that in the
approval, or it did not consider the Addition’s plans under the Color Standard and
reviewed them only under the Harmony Standard. To be enforceable, the
Association must show the AC applied the relevant standards on a reasoned and
nonarbitrary basis (not on subjective aesthetics) when it imposed the Roof
Condition. The AC’s approval, itself, does not provide definite reasons for the
imposition of the Roof Condition. And, the communications between the parties
42
D.I. 1, Ex. F.
43
Pet’r’s Answering Br., at 25. The Association’s answering brief details
communications between the AC and the Babbitts and their contractor concerning the
Addition’s plans, which were submitted to the AC by the contractor on March 2, 2018.
Id., at 8. Specifically, on March 4, 2018, the AC indicated to the contractor that “it is
always the intent of the AC to have these garages look as much as possible as an
extension of the house.” Id., at 10-11. The contractor responded to the AC that the
exterior “will be a perfect match to the existing home. . .[with the] only difference in
material [being] the metal roof, but the color will complement the home beautifully.” Id.,
at 11. After a period of time following the Addition’s completion, the AC sent an email
on May 6, 2019 advising the Babbitts that the Addition “looks great, with the only
exception being the roof color,” which does not match the existing metal roof. Id., at 16.
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did not focus on whether the Addition’s roof color would be visually
disharmonious with its surroundings and the adjacent/neighboring properties but,
instead, concentrated on whether the Addition’s roof color would be substantially
similar to that of other structures on the Property.44 Further, the Association argues
that the AC “has historically been more demanding in its review of additions than
the review of plans for a new home,” in order to “create as much as possible an
impression that it was not an addition but instead part of the original structure.”45
At this stage, there is not sufficient evidence to determine whether the AC
concluded the color was not a soft tone (since soft tones are automatically
acceptable under the Color Standard), and whether the AC reasonably applied the
Harmony Standard (if applicable), including whether the neighboring properties in
Wild Quail have sufficient visual coherence in their color schemes to support the
imposition of the Roof Condition.46 Accordingly, viewing evidence in the light
The Babbitts responded that the color of the metal roof matches the “color of the shingle
roof.” Id., at 17.
44
See generally Benner, 2014 WL 7269740, at *7-10. In Benner, the Court held the
applicable deed restrictions unenforceable, and also found the association’s rejection of
the homeowner’s request unreasonable since the applicable standard argued by the
association (whether the improvement at issue was “substantially similar to original
construction” on the property) differed from the standard applied by the architectural
review committee members (whether the improvement was similar to improvements
constructed by other owners in the community). Id., at *10.
45
Pet’r’s Answering Br., at 22.
46
The Babbitts entered one photograph of the Addition’s metal roof into evidence, which
shows portions of the three different roofs on the Babbitts’ home. Resp’ts’ Opening Br.,
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most favorable to the non-moving party, I find material disputed facts remain
concerning the reasonableness of the AC’s application of the standards and desire
to inquire more thoroughly into the facts to clarify the application of the law to the
circumstances.
IV. Conclusion
For the reasons set forth above, I recommend the Court deny the Babbitts’
motion for summary judgment. This is a final report and exceptions may be taken
pursuant to Court of Chancery Rule 144.
Sincerely,
/s/ Patricia W. Griffin
Patricia W. Griffin,
Master in Chancery
Ex. A. Color differentials between the roofs are not clearly shown in the photograph.
And, the Association discussed the limited number of metal roofs in Wild Quail, noting
that the Property is the only one with both asphalt shingle and metal roofs and with three
different roof colors. Pet’r’s Answering Br., at 24, n. 6. I consider Lawhon, which is
cited by the Association. 2008 WL 5459246 (Del. Ch. Dec. 31, 2008). In Lawhon, the
Court upheld, after trial, the architectural review committee’s disapproval of the color
and orientation of the Lawhon’s newly built home based upon the visual harmony
standard. Id., at *8. The Court concluded that “[t]he home’s color is disharmonious with
a presently well-developed common scheme, and its proposed perpendicular orientation
would create an incongruous appearance.” Id. It noted the color of the Lawhon home
“would be a color unlike the rest – a deep red instead of the earth tones of yellow, clay,
white and beige [of the other homes in the community].” Id., at *4. At this juncture, I do
not find the evidence sufficient to determine whether the Addition’s roof color is
disharmonious with its surroundings and adjacent/neighboring properties.
15