Dale Yeilding v. Council of Assn. of Unit Owners of Pelican Cove Condominium

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
DALE YEILDING and SANDRA )
YEILDING, husband and wife, )
)
Plaintiffs, )
)
v. ) C.A. No.: 2019-0826-SG
)
COUNCIL OF ASSOCIATION OF )
UNIT OWNERS OF PELICAN )
COVE CONDOMINIUM, )
and )
CATHERINE ROBINSON, )
)
Defendants. )
MEMORANDUM OPINION
Date Submitted: January 21, 2022
Date Decided: April 20, 2022
Dean A. Campbell, of LAW OFFICE OF DEAN A. CAMPBELL, P.A., Milton,
Delaware, Attorney for Plaintiffs Dale Yeilding and Sandra Yeilding.
Richard E. Berl, Jr., of HUDSON, JONES, JAYWORK & FISHER, LLC, Lewes,
Delaware, Attorney for Defendants Council of Association of Unit Owners of
Pelican Cove Condominium and Catherine Robinson.
GLASSCOCK, Vice Chancellor
This Court developed as a tool with which to administer equity—fairness—in
cases where courts of law were unable to act. 1 To that end, it may employ injunctive
relief, but only where justice so requires. The equities in this case, I find after trial,
are insufficient to such relief.
The Plaintiffs here are unit owners in a condominium in Dewey Beach, a
former bayfront hotel with a marina known as Pelican Cove. Dale and Sandra
Yeilding, the Plaintiffs, 2 are a married couple who rent out their unit in the
condominium as a vacation unit, and make personal use of it, as well. The Yeildings
previously were defendants in a matter brought by the unit holder association (the
“HOA”), which successfully advocated that the Yeildings were bound to a maximum
number of rental tenants—six—as provided in the Pelican Cove Condominium
Declaration (the “Declaration”) despite having the largest unit in the condominium.3
After that suit was resolved in favor of the Pelican Cove HOA, the Plaintiffs brought
this action against the HOA and one other unit holder, Catherine Robinson,
individually (the HOA and Robinson together, the “Defendants”). The Plaintiffs
posit a flurry of causes, all generally based on the allegation that various actions of
1
See, e.g., William T. Quillen & Michael Hanrahan, A Short History of the Delaware Court of
Chancery, 18 Del. J. Corp. L. 819 (1993).
2
I alternate between references to “the Plaintiffs” and “Yeilding” in this Memorandum Opinion
as, although Sandra Yeilding is named as a plaintiff, only Dale Yeilding testified at trial, and the
Plaintiffs’ briefing also refers to Mr. Yeilding in the singular in many instances.
3
Council of Ass’n of Unit Owners of Pelican Cove Condo. v. Yeilding, 2020 WL 2465725 (Del.
Ch. May 13, 2020).
1
the HOA were ultra vires and incompatible with the Declaration, or with positive
law. The action was expedited and the Plaintiffs sought relief via a temporary
restraining order; nonetheless, the pace of the litigation has been desultory.
Eventually, a trial seeking various applications of injunctive relief was held on
November 16, 2021, and post-trial briefing followed. This is my post-trial
Memorandum Opinion. I find that equity was not sufficiently invoked so that any
injunctive relief is appropriate. I also find that the Plaintiffs’ allegations wander the
borderlands that separate merely weak claims from the country of the frivolous. My
reasoning follows.
I. BACKGROUND 4
At bottom, this case revolves around the Plaintiffs’ disagreement with various
recent decisions of the HOA. As identified above, the Plaintiffs, the Yeildings, are
owners of Unit #7 at Pelican Cove. They bring this action against the HOA as well
as individually against the owner of Unit #2, Catherine Robinson.
The Complaint outlines four disparate bases for receipt of injunctive relief. In
brief, those bases are as follows: first, Unit #2 has been altered impermissibly under
the Plaintiffs’ reading of the Declaration; second, various unit owners have failed to
4
The facts in this section are drawn primarily from the parties’ pre-trial stipulation, joint exhibits
or testimony given at trial, though it has occasionally been necessary to reference other papers
such as the complaint in order to properly outline the lawsuit. Where the facts are drawn from
exhibits jointly submitted at trial, they are referred to according to the numbers provided on the
parties’ joint exhibit list and with page numbers derived from the stamp on each JX page (“JX
__, at ___”).
2
comply at all times with the Declaration and a second governing document, the
Pelican Cove Code of Regulations (the “Code of Regulations”), which (per the
Plaintiffs) prohibit obstruction of the decks and/or balconies at Pelican Cove; third,
the depth of the marina adjoining the property is insufficient under the latest
amendment to the Declaration; and fourth, the HOA has drafted common area rules
purporting to regulate renters’ guests, which, per the Plaintiffs, violate the
Declaration. 5 I consider the governing documents in more detail below, along with
a brief background of the facts alleged with respect to each particular count of the
second amended complaint (the “Complaint”).6
1. The Pertinent Documents
The Declaration “create[s] a plan of condominium ownership” in the subject
property, and was originally recorded in 1978.7 Since that time, the Declaration has
undergone three amendments, with the latest occurring in 2008. 8 The amendment
process requires a two-thirds vote of the membership.9 Property owners at Pelican
Cove are entitled to a voting percentage equal to the proportion of their unit’s
5
Fifth and sixth causes of action (regarding attorneys’ fees) were originally pled. Second Am.
Compl. for Injunctive Relief ¶¶ 73–83, Dkt. No. 25 [hereinafter “Compl.”]. Count six, relating to
special assessments, was withdrawn without prejudice at trial. See Tr. of 11.16.21 Trial, 87:21–
23, Dkt. No. 40 [hereinafter “Trial Tr.”]; see also Compl. ¶¶ 76–83. Count five, relating to
“shifting of attorneys fees,” has not been prosecuted and will not be considered here. See Compl.
¶¶ 73–75.
6
See Compl.
7
JX 1, at Yeilding/Myers000352.
8
JX 2, JX 3, JX 4.
9
JX 1, at Yeilding/Myers000364.
3
footprint to that of the entire property. 10 On that basis, the Plaintiffs are entitled to
a vote, individually, greater than one-third; thirty-four percent.11 I refer to the
Declaration and/or any of its amendments throughout this Memorandum Opinion as
“the Declaration.”
The Declaration, in accordance with Delaware statute, includes a “declaration
plan” “show[ing]” the units and common elements on the property (the “Declaration
Plan”).12 The Declaration Plan is recorded.13
Pelican Cove unit owners adopted a Code of Regulations in 1978. 14 A recent
HOA meeting in 2020 purported to amend the Code of Regulations, though the
Plaintiffs dispute whether this amendment was valid. 15 A recorded copy of the
amendment was provided as joint exhibit 23. 16 The Code of Regulations, by its
terms, can be amended by “vote of majority of the owners at any regular or special
meeting.”17 I refer to the Code of Regulations and any of its amendments throughout
this Memorandum Opinion as the “Code of Regulations.”
10
See Pre-Trial Stipulation and Order, II ¶ 4, Dkt. No. 36 [hereinafter “Stip.”]; see also JX 1, at
Yeilding/Myers000369.
11
See Stip. at II ¶ 2.
12
See 25 Del. C. § 2219(4); see also JX 6.
13
See JX 6.
14
JX 5.
15
See JX 21; Stip. at I ¶ 3 (“The modification placed the Code of Regulations in conflict with the
Declaration, where when such conflict exists, the Declaration governs.”).
16
JX 23.
17
JX 5, at Yeilding/Myers000382.
4
Where any conflict exists between the Declaration and the Code of
Regulations, the conflict shall, “if not otherwise reconciliable [sic], be resolved in
favor of the Declaration.”18
The Pelican Cove Beach House Rental Rules (the “Rental Rules”) are a third
pertinent document. 19 These rules do not appear to be formally recorded and are
aimed at regulating the behavior of rental guests.20 The document lays out eight
Rental Rules, which appear to be primarily focused on regulating behavior affecting
common areas or common elements of the condominium, such as parking and
plumbing. 21 A somewhat abbreviated version of these rules is posted at the entrance
to the common areas of Pelican Cove. 22
The Plaintiffs particularly take issue with rule number three (“Rule 3”), which
states: “No parties or large social gatherings. People other than those in the rental
party are not allowed on the property. No visitors are allowed.” 23
18
JX 1, at Yeilding/Myers000365.
19
JX 22.
20
Id.
21
Id.
22
Trial Tr. 45:12–22.
23
See JX 22; see also Trial Tr. 45:8–47:15.
5
The Plaintiffs allege that these rules were passed in violation of the
Declaration. 24 They also allege that the Rental Rules violate the Delaware Unit
Property Act (the “Unit Property Act”). 25
2. The Allegations
a. Unit Alterations
In 2019, Robinson, the owner of Unit #2, sought to make certain renovations
to her unit.26
The Declaration Plan shows the layout of Unit #2 (and all other units) in a
considerable amount of detail, including the dimensions of the “LR” (which I
assume means living room), the “BR” (which I assume means bedroom), and
identifying kitchen and bathroom elements via symbols. 27 The Declaration Plan
only shows one bedroom in connection with Unit #2.28
The Declaration includes a description of the Pelican Cove building, noting:
“Unit Number 2 is located on the first floor and consists of the following: a kitchen
and dining area, a living room, a bedroom, a bathroom, a closet containing a laundry
and three other closets.”29 The Plaintiffs assert that this subsection of the
24
Stip. at I ¶ 4.
25
Pls. Opening Br. for Post-Trial Closing Args. 11, Dkt. No. 41 [hereinafter “Post-Tr. OB”]; see
also, e.g., 25 Del. C. § 2205.
26
Trial Tr. 111:11–112:9; see also Compl. ¶ 19 (identifying the pertinent timeframe).
27
See JX 6.
28
Id.
29
JX 4, at Yeilding/Myers000410.
6
Declaration, entitled “Description of Building,” is a “required and mandated section
of the Declaration pursuant to” Delaware statute.30 The referenced statutory
provision provides that a unit property’s declaration must contain “[a] description of
the land and building.” 31
The Declaration includes a broad definition of common elements, including,
but not limited to,
[t]he foundation, the pilings, all supporting posts and
beams, and the crossbeams located under the building.
The electrical wiring system, including transformers and
all other equipment used to distribute the electricity, but
not including any fixture inside or on the exterior of any
wall within any of the individual units . . . . The outside
exterior walls of the building except for the windowglass
and screens. The plumbing facilities installed for use
outside the various individual units . . . . [and t]he party
walls located between the various units.32
Per Robinson’s testimony at trial, which I found to be credible, she hired an
architectural firm and a local contractor to accomplish interior-only changes to her
unit.33 Robinson testified that she “at one point had thought about” changing
windows, which would have constituted an exterior renovation; as such, she brought
her renovation plans to the HOA for approval.34 Ultimately, however, Robinson
testified that her changes did not affect the building’s foundation; that each unit is
30
See JX 1, at Yeilding/Myers000356; see also Compl. ¶ 14.
31
See 25 Del. C. § 2219(2).
32
JX 1, at Yeilding/Myers000357.
33
Trial Tr. 112:24–114:1; 115:8–20.
34
Id. at 115:11–20.
7
separately wired and each unit is separately metered with respect to water and
sewage, and neither of these common elements were affected; that no exterior walls
or windows were altered; that no party walls were altered; that no walls inside the
unit were moved; and that she “only added” a wall.35
Robinson testified that once her daughter arrived, she and her partner “wanted
to have an additional place where we could have another bed.” 36 But, she noted, the
original plans changed. 37 On cross-examination, Robinson clarified that, despite her
desire to have room for an additional bed, post-renovations Unit #2 contains “an
enlarged bedroom that has an adjoining office, but . . . they’re not separate rooms.”38
She also noted that the bathroom was moved in connection with the remodel, and
responded affirmatively when asked whether “the kitchen was relocated to some
degree,” including the kitchen sink.39
As noted, Robinson had taken her renovation plans to the HOA for approval.40
The only evidence I have on the pertinent deliberations is Dale Yeilding’s trial
testimony, wherein he noted that the HOA allowed Robinson to proceed over his
35
Id. at 116:7–118:14.
36
Id. at 112:7–9.
37
Id. at 112:21–113:10.
38
Id. at 123:24–124:4.
39
See id. at 124:13–125:4.
40
See id. at 115:14–17.
8
objections.41 Exactly what the HOA considered itself to have approved, or
permitted, is therefore not known to me.
Of note, Yeilding testified that failures in prior changes or repairs at Pelican
Cove had previously required him to pay 34% of the ultimate fix (based on the size
of his unit in proportion to the whole).42 He cited this as a reason that he objected
to the renovations in Unit #2. 43
b. Balcony Obstructions
The Plaintiffs’ second concern stems from what they view as inappropriate
use of a common element of Pelican Cove: the decks or balconies. 44 Section 14 of
the Declaration discusses restrictions on use of common elements, clarifying that
[u]se of all common elements shall in general be subject
to such reasonable rules and regulations as may be from
time to time adopted and amended . . . . Without the prior
written authorization of the council, no common element
shall be obstructed . . . . Furthermore, no towels, blankets,
clothing, or other material of any kind shall be hung or
draped or allowed to remain at or on any of the balconies,
railings, porches, patios, docks, or catwalks of the
property. 45
41
See id. at 22:3–18. Yeilding declined to state that the HOA “approved” the renovation, because
amendments to the Declaration require a two-thirds vote, and his abstention counts for 34% of the
vote. See id.; see also JX 1, at Yeilding/Myers000369.
42
Trial Tr. 26:23–27:10.
43
Id. at 26:6–27:19.
44
See JX 1, at Yeilding/Myers000358 (identifying the “outside steps and decking and any handrail
leading to the entrance ways” as a common element).
45
See id. at Yeilding/Myers000360–61.
9
The Code of Regulations also addresses use of common elements, specifying
that a unit owner “shall not place . . . in any common element area any furniture,
packages, or objects of any kind unless prior written consent from the Council is
provided to the unit owner. Such areas shall be used for no other purpose than for
normal transit unless otherwise approved by the Council.”46
The President of the HOA signed a writing dated May 2020 and addressed to
“Pelican Cove Owners” that permits the owners of units #4, #5, and #6 to locate
chairs, tables, and other small objects on the balcony “in a manner that does not
unreasonably restrict” passage.47
The Plaintiffs alleged in their Complaint that certain furniture and personal
articles placed upon the deck are in violation of “Fire Safety Codes.”48 They also
point to a purported conflict between the Declaration and the Code of Regulations,49
questioning whether the “prior written” authorization or consent of the HOA
requires a majority vote or a two-thirds vote. 50
46
JX 23.
47
JX 21.
48
Compl. ¶ 59.
49
Post-Tr. OB 6.
50
Id. at 7.
10
The Plaintiffs submitted joint exhibit 14, photographs of the deck in question,
including the challenged deck chairs and the space remaining for ingress and
egress.51 The third photograph also shows the deck chairs in use.52
c. The Pelican Cove Marina
Pelican Cove is situated next to a marina and provides its unit owners with
access to the marina.53 The Declaration identifies that the pier “has 7 boat slips that
make up the marina . . . . Each unit is entitled to one navigable boat slip,” and
specifies that “[t]he right of each unit to a navigable boat slip is guaranteed by this
agreement.”54
51
JX 14.
52
That is, a photograph of residents sitting outside their units, presumably enjoying the bay views.
Id. The Plaintiffs submitted a “Supplement to Closing Argument” shortly following their opening
post-trial brief. Pls. Suppl. to Closing Arg., Dkt. No. 42. The supplement identifies the town of
Dewey Beach (where Pelican Cove is located) as having adopted the “International Building
Code” to regulate condominiums. Id. at 1. The post-trial reply brief specifies that the town of
Dewey Beach adopted the International Building Code (the Dewey Beach Code also adopts future
editions as promulgated) in its code of ordinances. Dewey Beach, Del., Code of Ordinances,
ch. 71, § 1(A)(1) (2005); see also Pl.’s Reply Br. 12, Dkt. No. 48 [hereinafter “Post-Tr. RB”]. The
supplement cites in particular a subsection on “Exit Passageways,” identifying a minimum width
of 36 inches for an exit passageway in certain circumstances and noting that “[t]he minimum width
or required capacity of exit passageways shall be unobstructed.” Id. at 2; see 2021 International
Building Code, ch. 10, § 1024.2 (2021). Despite this, the Plaintiffs have not submitted any
evidence that the exit passageways (the decks) are obstructed to a width of less than 36 inches.
The only evidence that could demonstrate the width is JX 14, which I find insufficient to
demonstrate clearance on the decks, as it does not attempt to show a violation of the 36-inch
requirement. See JX 14. As the Defendants well note in their post-trial answering brief, the
“Dewey Beach Code” issue was not included in the pre-trial stipulation, nor in the Complaint, and
was only briefly raised without citation in Yeilding’s testimony at trial. See Defs.’ Post-Trial
Answering Br. 24–25, Dkt. No. 43 [hereinafter “Post-Tr. AB”]; Stip.; Compl.; Trial Tr. 64:4–65:6.
For these reasons, the supplement does not figure prominently in my treatment of the balcony
obstructions.
53
See, e.g., JX 4, at Yeilding/Myers000411.
54
Id. (emphasis added).
11
In order to provide the marina and navigable boat slips to its unit owners, the
HOA entered into a subaqueous land lease with the Delaware Department of Natural
Resources (“DNREC”) in 2000.55 That lease, which had a twenty-year term, has
since expired.56
The Plaintiffs’ complaints about the marina are twofold in nature. First, they
argue that the lease renewal process, which is pending, was undertaken improperly.57
Second, they argue that the boat slips available are not “navigable” as defined in the
Declaration. 58
The Plaintiffs assert that the HOA Treasurer submitted an incomplete
subaqueous lease application to DNREC without obtaining a “required two thirds
(2/3) vote to renew the lease.”59 The application is purportedly incomplete because
no depth survey was submitted and because the marina, per the Plaintiffs, does not
comply with the depth identified in the governing documents. 60
For a slip to be “navigable” as defined in the Declaration, it must contain “18
inches of water at mean low tide.”61 In the event a slip becomes non-navigable, the
Declaration provides that the pertinent unit can notify the HOA in writing, and that
55
Stip. at II ¶ 5.
56
See id. at II ¶¶ 5–6.
57
See Post-Tr. OB 8; see also Stip. at I ¶ 2a.
58
See Post-Tr. OB 8, Stip. at I ¶ 2b.
59
Stip. at I ¶ 2a.
60
Compl. ¶ 47.
61
JX 4, at Yeilding/Myers000411.
12
the HOA will then verify the condition of the slip and (presumably) take corrective
action. 62
The slips were not fully assigned when Yeilding first purchased Unit #7, and
at that time another individual had been using slip 7. 63 As such, Yeilding agreed to
use slip 5.64 After this verbal agreement, Yeilding inquired about installing a boat
lift on slip 5—a right not guaranteed in the pertinent documents 65—but was
purportedly unable to do so. 66 He has also used slips 1, 2, and 3 from time to time.67
Yeilding first notified the HOA on November 28, 2017 68 that he believed slip
1 was no longer navigable per the Declaration. 69 Per Yeilding’s testimony, he
measured the water depth in slip 1 himself and became concerned that the marina
was insufficiently deep. 70 Once he informed the HOA of the non-navigability of
slip 1, the HOA formally assigned him slip 5, and assigned slips 1, 2, and 3 to unit
62
Id.
63
See, e.g., Trial Tr. 94:20–95:3 (the HOA President testifying as to the slips that were taken at
the time Yeilding purchased Unit #7).
64
Id. at 34:3–8.
65
JX 4, Yeilding/Myers000411 (noting that a unit may make modifications to a slip, such as adding
a boat lift, upon written approval of the Condominium).
66
See Trial Tr. 33:10–35:24.
67
Id. at 35:18–24.
68
The joint exhibit, JX 9, is dated as of 2017. JX 9. I do note that the Plaintiffs’ post-trial reply
briefing indicates the letter was sent in 2019. See Post-Tr. RB 4. I have considered the exhibit the
controlling authority as to the date, but note the discrepancy in case of any confusion.
69
JX 9.
70
Trial Tr. 36:6–22.
13
owners who did not own a boat. 71 Yeilding asserts he is unable to construct a boat
lift in slip 5 due to a lack of available pylons and due to boat lift motors in slips 4
and 6 that extend “well into” slip 5,72 but has not sought relief based on this
contention, which, accordingly, I do not consider further.
Both the HOA and Yeilding proffered expert witnesses on the issue of marina
depth. 73 Mr. Rob Plitko, Jr., a professional civil engineer, was the expert for the
Plaintiffs.74 Plitko specializes in hydrographic surveying, and has been working in
this field since 2001. 75 Plitko measured the mean low water depth of the marina
using a combination of GPS technology and data from the National Oceanic and
Atmospheric Administration.76 Following his measurements, Plitko produced a
survey.77 Plitko’s survey was consistent with Yeilding’s suspicions, showing that
slips 1 and 2 had a depth of less than 18 inches at mean low tide. 78 Plitko’s survey
showed that slip 5 had sufficient depth. 79 Plitko also testified that it would be
71
Id. at 37:9–38:2; JX 20 (“unit 2 requested slip 3[;] unit 5 requested 1[;] unit 4 requested 2”; the
motion to grant the slips in question passed by a majority of owners, though Yeilding voted
against).
72
Trial Tr. 34:15–35:3.
73
See generally Trial Tr.
74
See, e.g., Post-Tr. OB 9; JX 8.
75
Post-Tr. OB 9; Trial Tr. 71:5–72:19.
76
See Trial Tr. 73:9–75:21.
77
JX 8.
78
Id.
79
Id.
14
possible to obtain different readings at different times of the year in the same places
in the marina.80
The HOA’s expert witness was Ms. Evelyn Maurmeyer. 81 Maurmeyer has
worked with Delaware marina requirements for 40 years.82 Maurmeyer was
originally retained to prepare for a public hearing regarding Pelican Cove’s renewal
application. 83 Maurmeyer prepared a report in connection with that hearing using a
“calibrated rod,” which does not make use of GPS technology. 84 Per her report,
which was adjusted to mean low water, each of the slips (including slips 1, 2, 3, and
5) had at least 2.3 feet of marina depth, with the outermost slips being about 3 feet
deep. 85
Despite the non-technological approach to measuring marina depths,
Maurmeyer’s report was adjusted for the mean low water level based on the “USGS
Rehoboth Bay tide gage,” which is made available online. 86 Maurmeyer testified
that she had no way of confirming the USGS readings, but that she found it “highly
unlikely that an agency like the USGS would have malfunctioning equipment.”87
Plitko testified that he did not agree with the tidal gage the USGS publicizes, stating
80
Trial Tr. 83:15–19.
81
See generally Trial Tr.
82
Id. at 127:19–128:12.
83
Id. at 129:1–11.
84
See JX 18; see also Trial Tr. 137:21–138:11, 132:11–133:9.
85
Trial Tr. 132:8–134:19; see also JX 18.
86
Trial Tr. 138:12–22.
87
Id. at 139:2–12.
15
that it reads “about six inches higher” than what his GPS provides.88 Plitko has
emailed and called the USGS to report this discrepancy, but he noted that it does not
appear to have been corrected as of trial.89
Maurmeyer acknowledged that the figures she and Plitko had reached were
different, and testified that she believed the figures differed due to the time of year
in which their measurements occurred.90 In support, she discussed the movement of
the sand beneath the water, and the seasonality of sediment in a coastal
environment.91
Maurmeyer was asked during her testimony to review the renewal application
the HOA had submitted. 92 She looked at the exhibit in question, and testified that it
“looked complete, and evidently DNREC deemed it complete. Otherwise, it would
not have gone on public notice.”93 She also testified that the renewal process does
not require a depth survey. 94
88
Id. at 141:14–24.
89
Id. at 143:3–18. I note that this testimony was objected to after the line of questioning had
already begun and after answers had been provided. Id. at 143:19–144:3. Once objected to, the
line of questioning ceased. I consider the testimony prior to the objection in reviewing the totality
of the facts.
90
Id. at 135:1–5. Maurmeyer’s survey occurred in August 2020. See JX 18. Plitko’s survey
occurred in March 2020. See JX 8.
91
Trial Tr. 135:8–136:1.
92
Id. at 131:5–24.
93
Id.
94
Id. at 132:1–4.
16
d. Common Area Rental Rules
Finally, the Plaintiffs challenge the Rental Rules adopted by the HOA to
control the Pelican Cove common areas. Particularly, they challenge Rule 3, which
states: “No parties or large social gatherings. People other than those in the rental
party are not allowed on the property. No visitors are allowed.” 95 Their primary
theory is that the Unit Property Act disallows this rule. 96 The Declaration also
contains language very similar to that in the Unit Property Act regarding common
elements, and the Plaintiffs say the Declaration has been violated as well. 97 The
pertinent section of the Unit Property Act reads: “Each unit owner or lessee . . . may
use the common elements in accordance with the purpose for which they are
intended without hindering or encroaching upon the lawful rights of the other unit
owners.”98
The Plaintiffs point out that the rules in question are labeled “Rental Rules,”
meaning that owners can have parties or large social gatherings on the property, or
guests on the property, but that renters cannot. 99 Their contention is that the quoted
95
JX 22.
96
Post-Tr. OB 11.
97
Id. at 12; JX 1, at Yeilding/Myers000359. The Declaration, sensibly, notes that the HOA may
adopt rules and regulations “provided they are not in conflict with the Unit Property Act,” among
other things. See JX 1, at Yeilding/Myers000355.
98
25 Del. C. § 2205.
99
Post-Tr. OB 11.
17
language “[e]ach unit owner or lessee” from the Unit Property Act 100 prohibits
discrimination between renters and owners. 101
Robinson testified that the Rental Rules were enacted in response to certain
disruptions that were preventing unit owners from enjoyment of the Pelican Cove
property and common elements. 102 Particularly, she testified, the parking lot was
being overrun with visitors, preventing unit owners from being able to park their
cars, and “large, loud parties” were being held.103 Additionally, rental guests went
so far as to damage the neighboring property, the owner of which then filed
complaints with the Pelican Cove HOA.104 The Defendants’ post-trial briefing
clarifies that the issues with large visiting groups began “on the heels of the
Yeildings’ purchase of Unit 7.” 105
B. Procedural History
This case proceeded mostly straightforwardly, if slowly. The original
complaint was filed in October 2019 along with a motion for Temporary Restraining
Order. 106 The motion for Temporary Restraining Order was opposed in November
2019, 107 and the Temporary Restraining Order request was later withdrawn, with a
100
25 Del. C. § 2205.
101
Post-Tr. OB 11.
102
Trial Tr. 119:17–120:1.
103
Id. at 120:19–121:3.
104
Id. at 121:4–9.
105
Post-Tr. AB 21.
106
Compl. for Injunctive Relief, Dkt. No. 1; Mot. for TRO, Dkt. No. 1.
107
Defs.’ Resp. to Mot. for TRO, Dkt. No. 5.
18
new amended complaint filed. 108 The complaint was subsequently amended a
second time. 109 The case then proceeded directly to trial without dispositive motion
practice. 110 Post-trial briefing followed, and I considered the matter submitted for
decision as of the receipt of the post-trial reply brief in January 2022. 111
II. ANALYSIS
The Plaintiffs have alleged four different claims, and seek individual
injunctive relief with respect to each. Notably, the relief requested for each discrete
allegation of wrongdoing differs significantly among the Plaintiffs’ various papers.
The Pre-Trial Stipulation requests considerably more relief in connection with
certain counts than was pled in the Complaint.112 The Complaint’s pleading for
relief also differs from that sought in the post-trial briefing, though not as
significantly. 113 To allow the pleadings to conform to the current state of affairs, so
that the Plaintiffs have the benefit of the development of a full record at trial, I will
treat the post-trial briefing as the operative requested relief.
108
Letter to Sam Glasscock III from Dean A. Campbell, Esq. in Regards to the Motion for TRO
and Motion to Amend Teleconference, Dkt. No. 8; Pls.’ Mot. to Amend Compl., Dkt. No. 10; Am.
Compl. for Injunctive Relief, Dkt. No. 13.
109
Compl.
110
See Trial Tr. Certain motions in limine were filed prior to the trial; these were later withdrawn.
See Defs.’ Mot. in Lim. to Preclude Expert Test., Dkt. No. 28; Mot. in Lim. to Exclude the Test.
of Defs. Proposed Expert Witness, Evelyn Maurmeyer, Dkt. No. 31.
111
Post-Tr. OB; Post-Tr. AB; Post-Tr. RB.
112
See Compl. ¶¶ 1–7; Stip. at IV ¶¶ 1–6.
113
See Compl. ¶¶ 1–7; Post-Tr. OB 12–14.
19
The permanent injunction standard requires the plaintiff to demonstrate that:
(1) it has proven actual success on the merits of the claims; (2) irreparable harm will
be suffered if injunctive relief is not granted; and (3) the harm that will result if an
injunction is not entered outweighs the harm that would result if an injunction is
granted.114 The equities must ultimately support the relief sought.115
Accordingly, I will assess the legal viability of each claim before turning to
an analysis of whether injunctive relief should issue. I have treated each of the four
complaints separately below. Before that, however, it is useful to address the
allegations by the Plaintiffs that the Defendants have violated a dog’s breakfast of
statutes and regulations—including contentions raised at various stages of the
litigation 116 that the Defendants have violated the Unit Property Act, the Dewey
Beach Occupancy Code, Fire Safety Codes, and DNREC regulations. Further, per
the Plaintiffs, these violations support declaratory judgment and equitable relief.
Even assuming the predicate violations, this conclusion is unsupported. The
Plaintiffs have failed even to attempt to show that they have a private right of action
based on statutory or regulatory violations.
114
Christiana Town Ctr., LLC, v. New Castle Cty., 2003 WL 21314499, at *2 (Del. Ch. June 6,
2003), aff’d, 841 A.2d 307 (Del. 2004).
115
Cf. DeMarco v. Christina Care Health Servs., Inc., 263 A.3d 423, 434 (Del. Ch. 2021)
(assessing as a final matter whether “the balance of the equities” tips for or against the requested
injunction).
116
See, e.g., supra note 52; infra note 143.
20
I first note that the Plaintiffs have failed to cite any provision in any of these
statutes and regulations providing explicitly that the General Assembly (or the
entities to which it conferred regulatory authority) intended to provide a private right
of action for any violation. The absence of an express statutory right of action does
not necessarily bar any related cause of action, however. 117 Delaware caselaw has
applied a three-prong test to assess whether a private right of action is available
under a statute: asking first whether the plaintiff is a member of a class for whose
“special benefit” the statute was enacted, then, if so, whether there is any indication
of legislative intent to create or to deny a private remedy for violation of the act, and,
if there is no indicia of legislative intent, whether the recognition of an implied right
of action would advance the purposes of the act.118 In certain instances, the Court
has found intent to create a private remedy “where a statute was obviously enacted
117
See Lock v. Schreppler, 426 A.2d 856, 864 (Del. Super. 1981), overruled on other grounds by
E. Com. Realty Corp. v. Fusco, 654 A.2d 833 (Del. 1995).
118
See O’Neill v. Town of Middletown, 2006 WL 205071, at *16 (Del. Ch. Jan. 18, 2006) (citing
Cort v. Ash, 422 U.S. 66 (1975); then citing Lock, 426 A.2d at 864; then citing Schuster v. Derocili,
775 A.2d 1029, 1036 n.42 (Del. 2001); then citing Brett v. Berkowitz, 706 A.2d 509, 512 (Del.
1998); and then citing Mann v. Oppenheimer & Co., 517 A.2d 1056, 1064–66 (Del. 1986)).
Delaware caselaw does not appear to often approach the third prong of this test. For instance,
Brett resolved the question of availability of a private right of action by finding that legislative
intent was to protect the public, and did not reach the third prong. Brett, 702 A.2d at 512–13.
Mann stated outright that where civil actions might arguably “further enforce the Act . . . this alone
will not confer a private remedy.” Mann, 517 A.2d at 1066 (citing Transamerica Mortg. Advisors,
Inc. v. Lewis, 444 U.S. 11, 21–22 (1979)). Similarly, O’Neill addressed a then-recent United States
Supreme Court precedent, Alexander v. Sandoval, which had narrowed its prior holding in Cort v.
Ash to indicate that “[s]tatutory intent on” the issue of a private remedy “is determinative.” See
O’Neill, 2006 WL 205071, at *19 (quoting Alexander v. Sandoval, 532 U.S. 275, 286–87 (2001)).
21
for the protection of a designated class of individuals.” 119 But where statutes impose
“general prohibitions,” the legislative intent may be to “protect the public at
large,”120 therefore precluding the availability of a private right of action. 121
Here, again, the Plaintiffs have utterly failed to attempt to demonstrate that
any statutory violations, should they exist, confer on them a right of action via which
they may invoke equity. Accordingly, I do not address the statutes, codes, or
regulations further, and proceed on the understanding that the Plaintiffs’ rights are
conferred via their contractual relationship with the Defendants, through the
Declaration or otherwise.
A. Unit Alterations
As described in detail in the fact section above, Robinson remodeled her Unit
#2 in part; the Plaintiffs challenge this action as violating both the Declaration and
the Unit Property Act. Less directly pled (but in any event addressed below),
Yeilding also notes that if the remodeling fails or causes any repairs to become
necessary to the common elements, as holder of a 34% interest in the condominium,
he may be responsible for paying 34% of the repairs.
119
Brett, 706 A.2d at 512 (citations omitted). For example, one Delaware Superior Court case
found a private right of action to exist in a statute designed per its text to benefit employees and
prospective employees. See Heller v. Dover Warehouse Mkt., Inc., 515 A.2d 178, 180 (Del. Super.
June 17, 1986).
120
Brett, 706 A.2d at 512–13.
121
See id.; cf. Oceanport Indus., Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 899 (Del.
1994) (discussing the “traditional” view that a duty to the public does not give rise to private rights
of action, but then discussing the evolution of caselaw to loosen that traditional standard).
22
The causes of action underlying the request for injunctive relief appear to the
Court to be breach of contract—the Declaration—and vindication of a statute—the
Unit Property Act. As noted above, I consider the underlying action for invocation
of injunctive relief to sound in contract.
Yeilding objects to Robinson’s alterations to Unit #2 for two reasons: first, he
posits that the alterations require an amendment to the Declaration and the
Declaration Plan, and second, he expects that Robinson’s changes have resulted in
changes to the common elements prohibited under the Declaration.122
Robinson testified at trial that she originally sought to establish a second
bedroom in her unit, but that she ultimately ended up with “an enlarged bedroom”
with an adjoining office, which is not a “separate room[].” 123 Following trial, the
Plaintiffs still challenge whether the remodeling affected the common elements of
“plumbing, both water supply and sewer discharge.” 124
The pertinent section of the Declaration describes the following as common
elements:
The plumbing facilities installed for use outside the
various individual units . . . . The sanitary sewage
facilities, including waste pipes from the individual
units . . . . Common plumbing, vent, and waste lines
located in party walls . . . . Water system and pipe lines
122
See Post-Tr. OB 3.
123
Trial Tr. 123:24–124:4.
124
Post-Tr. OB 4.
23
leading from the source of supply to the individual
units.125
If Unit #2’s remodeling made changes to any of these elements, Robinson
would have needed to obtain “the written consent and approval of the council.” 126
I do not have the benefit of expert testimony with respect to this issue, so I am
left to rely on the representations of the parties.127 Yeilding purported to testify to
the changes to Robinson’s unit based on a “walk through” he did “one time” after
asking “the construction fellow if I could walk through and take a couple
pictures.” 128 He noted that the kitchen and the bathroom had been moved as a result
of the remodeling. 129
Robinson testified to as much.130 But beyond that confirmation, Robinson
also testified that the plumbing comes into her unit at the same place as it did pre-
remodel, and that the sewage and wastewater disposals go out at the same place as
pre-remodel. 131 She also confirmed that nothing was done to the “common
plumbing vent or waste lines in the walls.”132
125
JX 1, at Yeilding/Myers000357–358.
126
Id. at Yeilding/Myers000366.
127
I do have at my disposal JX 16, which contains the building permits Robinson obtained for her
remodel. See JX 16. Neither party has stressed the importance of this permit application, and I
frankly read it as inconclusive as to whether the common elements were altered. Because of the
lack of reliance upon this document, I consider it only minimally in making my ultimate
conclusion.
128
Trial Tr. 23:18–24:9.
129
Id.130
Id. at 124:13–125:4.
131
Id. at 117:14–20.
132
Id. at 118:12–14.
24
I find both parties’ testimony credible. Fortunately, they are not in direct
contradiction, and I interpret them so as to avoid implied contradiction. 133 Taking
Robinson’s testimony as true, then, I find that the common elements were not
impermissibly altered.
This leaves the second basis upon which Yeilding sues in regard to Unit #2:
the mismatch between the Declaration, the Declaration Plan, and Unit #2’s layout in
reality. I agree that at the very least, there is a lack of harmony between the
Declaration Plan and Unit #2. It is less clear that there is a conflict between Unit #2
and the Declaration—as the testimony from various witnesses showed, it is certainly
possible to describe the layout of Unit #2 in multiple ways, and therefore the
description in the Declaration may be sufficient—but at any rate, the diagram in the
Declaration Plan is no longer strictly accurate.134
Assuming, without deciding, that the Declaration Plan is a substantive part of
the Declaration; that, if Unit #2’s layout is inconsistent with the Declaration Plan,
this causes some sort of contractual harm to Yeilding under the contractual
133
See Davidson v. Wilson, 1869 WL 1361, at *308 (Del. Ch. Feb. 1, 1869) (“It is a rule of law as
well as of charity that when the fact proved may be harmonized with the answer the Court shall
rather do that than impute perjury to the defendant.”); cf. State v. Kisielewski, 1991 WL 138365,
at *1 (Del. Super. June 28, 1991) (harmonizing testimony of various witnesses); Nationwide Mut.
Ins. Co. v. Hockessin Const., Inc., 1996 WL 453325, at *4 (Del. Super. May 15, 1996) (same).
134
I note that the Plaintiffs argue that this lack of accuracy violates the Unit Property Act, although
how is unclear to me. At any event, for the reasons above, I find the statutory allegation
insufficient to support relief.
25
relationship between himself and the HOA; 135 and that Yeilding has proven actual
success on the question of whether Unit #2’s layout is presently in conflict with the
Declaration, I turn to the requested relief.
The Plaintiffs seek an injunction and suggest two forms for such injunction.136
They first suggest an injunction requiring the HOA to amend the Declaration to
properly describe Unit #2.137 Alternately, they suggest that an injunction be entered
requiring Unit #2 to be returned to its “pre-existing state.” 138
For the Plaintiffs to receive injunctive relief, I must find that the Plaintiffs
have shown that irreparable harm will be suffered if such relief is not granted.139
There has been no showing of threatened or actual irreparable harm in the record.
When asked at trial, Yeilding noted a prior instance when a remodel was improperly
undertaken and he was responsible for a portion of the resulting costs to fix common
elements.140 Yeilding’s concern with respect to this point is understandable. When
the prior repairs failed, due to his significant ownership interest in Pelican Cove, he
had been compelled to pay 34% of the remediation costs (in proportion to his 34%
135
To the extent this is argued in the post-trial briefing, I confess difficulty in locating and
following the argument. The relief, however, does request a determination from the Court that the
Unit #2 remodel was “in violation of the Declaration.” See Post-Tr. OB 12.
136
Id.137
Id.138
Id.139
Christiana Town Ctr., 2003 WL 21314499, at *2.
140
Trial Tr. 26:19–28:18.
26
ownership interest).141 However sympathetic this position, though, fear over
potential future harm is not equivalent to irreparable harm necessary to injunctive
relief. More fundamentally, having determined that the alterations to Unit #2 do not
alter common elements, the Plaintiffs’ fear of future expense is presently unfounded.
This obviates consideration of a mandatory injunction to restore the prior
configuration of the unit. The Plaintiffs do not even suggest that any irreparable
harm accompanies failure to enter the alternative injunction requested—that the
Defendants be enjoined to amend the Declaration Plan.
Yeilding also notes that if load-bearing walls were moved, the unit above Unit
#2 could suffer damage. 142 True, perhaps, but no evidence was presented to suggest
that a load-bearing wall was moved. In fact, Robinson testified that no walls were
removed. 143
The Plaintiffs also request a declaratory judgment stating that the renovation
of Unit #2 is in violation of both Delaware law 144 and the Declaration. I have already
141
See supra note 42 and accompanying text.
142
Trial Tr. 27:11–28:18.
143
See supra note 35 and accompanying text.
144
See Post-Tr. OB 12. In my reading of the opening post-trial briefing, the Plaintiffs seek a
declaration that the Unit Property Act is the positive Delaware law being offended. See id. There
was a brief mention at trial and again in the reply post-trial briefing that “Dewey Beach’s
Occupancy Ordinance” would be violated in the event that the Robinsons hosted their child’s
grandparents. See Trial Tr. 20:13–21:6 (noting that Robinson had herself raised this issue and
therefore was looking to add a second bedroom to her unit at some point during the remodel
process); see Post-Tr. RB 10–11. This issue is not properly before the Court. The ordinance has
not been cited, and the issue was not raised in the post-trial opening briefing such that the
Defendants could respond. Further, the issue is not ripe; it presupposes a hypothetical, and finally
27
noted above that the construction has, at least, created a conflict between reality and
the Declaration Plan as illustrated. The right to a declaratory judgment, however, is
a limited right. Where a concrete dispute exists, the Declaratory Judgment Act
deviates from the common law to avoid the harsh result of having to await an actual
injury to address the controversy.145 The Plaintiffs, however, have failed to establish
an actual controversy. 146 The following prerequisites must be satisfied for an actual
controversy to exist: the controversy must (1) involve the rights or other legal
relations of the party seeking declaratory relief; (2) be a controversy in which the
claim is asserted against one who has an interest in contesting the claim; (3) be
between parties whose interests are real and adverse; and (4) be ripe for judicial
determination.147
The Plaintiffs have failed to show that their rights are at issue, that the
Defendants have any legal interest in opposing any claim of right, or that the interests
here are real and adverse. At most, the Plaintiffs have shown that the renovations
have made the diagram on the Declaration Plan inaccurate. They would like a
is not supported by the testimony at trial. I do not consider the Dewey Beach Occupancy
Ordinance further.
145
See, e.g., Rollins Int’l, Inc. v. Int’l Hydronics Corp., 303 A.2d 660, 662 (Del. 1973) (citation
omitted) (“[T]he basic purpose of the Declaratory Judgment Act is to enable the courts to
adjudicate a controversy prior to the time when a remedy is traditionally available and, thus, to
advance the stage at which a matter is traditionally justiciable.”)
146
XL Specialty Ins. Co. v. WMI Liquidating Tr., 93 A.3d 1208, 1216–17 (Del. 2014) (citing 10
Del. C. § 6501; then citing Stroud v. Milliken Enters., Inc., 552 A.2d 476, 479 (Del. 1989)).
147
Id. at 1217 (citing Stroud, 552 A.2d at 479–80).
28
judgment saying that this is a legal wrong. They have failed (in light of my
determination that the common elements are not affected by the renovations) to
establish that any right or interest they hold is at issue. To be clear, an interest in a
legal win for its own sake is insufficient foundation upon which to erect a declaratory
judgment, and the Plaintiffs have shown no other.
B. Balcony Obstructions
The thrust of the Plaintiffs’ arguments with respect to the balcony obstructions
is that the presence of deck chairs and furniture upon the deck breaches a contract—
specifically, that they breach the Declaration. The pertinent section of the
Declaration reads:
Use of all common elements shall in general be subject to
such reasonable rules and regulations as may be from time
to time adopted and amended . . . . Without the prior
written authorization of the council, no common element
shall be obstructed . . . . Furthermore, no towels, blankets,
clothing, or other material of any kind shall be hung or
draped or allowed to remain at or on any of the balconies,
railings, porches, patios, docks, or catwalks of the
property. 148
The Plaintiffs contend that in placing deck chairs outside their units, the other
unit owners are “obstruct[ing]” the common elements.149 The Declaration also
148
JX 1, at Yeilding/Myers000360–61 (emphasis added).
149
See Post-Tr. OB 13.
29
provides: “[a]ny conflicts between the Declaration and Code of Regulations shall, if
not otherwise reconciliable [sic], be resolved in favor of the Declaration.” 150
The Code of Regulations, on the topic, states as follows: “A unit owner shall
not place or cause to be placed in any common element area any furniture, packages,
or objects of any kind unless prior written consent from the Council is provided to
the unit owner.” 151 This language is reflective of an update made to the original
Code of Regulations by the HOA in May 2020. 152 That amendment was recorded
as found at joint exhibit 23.153
As identified in the fact section above, the deck constitutes a common
element. 154 The main questions are whether the deck chairs other residents have
placed upon the deck are impermissible obstructions under the text of the
Declaration and the Code of Regulations, and whether a written exception has been
provided.
The Plaintiffs’ argument is that the Declaration requires a two-thirds vote in
order to be amended (which would require the Yeildings’ approval, which has not
been granted to date155), and that if the Declaration conflicts in any way with the
Code of Regulations, the Declaration must govern. Both of these theories are
150
JX 1, at Yeilding/Myers000365.
151
JX 23.
152
See JX 21.
153
JX 23.
154
See supra note 44 and accompanying text.
155
See JX 21.
30
grounded in the text of the Declaration.156 But, in my view, the Plaintiffs misread
the Declaration.
The Declaration calls for “prior written authorization of the council” in order
for obstructions such as the deck chairs to be allowed to linger. 157 But the HOA has
provided prior written authorization, following the amendment to the Code of
Regulations. 158 On May 4, 2020, the President of the HOA signed a writing reading:
In accordance with Article V, Section 4, Use of Common
Elements, of the Code of Regulations for Pelican Cove
Condominium, chairs, tables, and other small objects may
be located on the upstairs balcony in front of Units 4, 5, &
6, in a manner that does not unreasonably restrict ingress,
egress, or passage, is hereby approved by Pelican Cove
Condominium Council, effective May 2, 2020.159
The Plaintiffs have not provided any reason why the May 4 writing is
insufficient to confer authorization, other than their belief that the Declaration must
have been the forum for providing written authorization.160 But the Declaration
itself does not specify that the prior written authorization take the form of an
amendment to the Declaration.161 And an amendment to the Code of Regulations
requires only majority support, rather than two-thirds support. 162 The meeting
156
See JX 1, at Yeilding/Myers000365; see id. at Yeilding/Myers000364.
157
Id. at Yeilding/Myers000360.
158
See, e.g., JX 23, JX 21.
159
JX 21. The somewhat confusing syntax of the authorization is the original. See id.
160
Post-Tr. OB 7.
161
See JX 1, at Yeilding/Myers000360–361.
162
See JX 5, at Yeilding/Myers000382.
31
minutes from the HOA’s discussion indicate that the other six unit owners all voted
in favor of permitting furniture on the deck so long as ingress and egress remained
possible, thus constituting a majority sufficient to amend the Code of Regulations.163
It follows that the Code of Regulations in its current form, and the May 4 notice,
together provide adequate prior written authorization under an objective reading of
the text.164
The Plaintiffs’ post-trial reply briefing does not strongly press the question of
whether a conflict exists between the Declaration and the Code of Regulations at
present, but the issue was raised in the post-trial opening brief. 165 I address the
potential conflict concisely for completeness’s sake. To my mind, any potential
conflict between the Declaration and the Code of Regulations regarding obstruction
of the deck as a common element is, as the Declaration provides, reconcilable. The
Declaration only controls if the Code of Regulations is in irreconcilable conflict
therewith. If one reads—as I do—the amendment to the Code of Regulations as
performative of the Declaration’s requirement that prior written authorization of the
HOA be obtained, then it is apparent that no irreconcilable conflict exists.
The Plaintiffs have not proven a breach of contract with respect to the so-
called balcony obstructions. As the underlying claim fails on the merits, I do not
163
See JX 21.
164
See JX 23.
165
See Post-Tr. OB 6–7; Trial Tr. 32:2–10.
32
reach the issue of the Plaintiffs’ requested injunctive relief. I do note that based on
the evidence, it is unlikely that either the irreparable harm or balancing requirements
of the test for injunctive relief are satisfied here.
C. The Pelican Cove Marina
The marina depth issue primarily relates to the navigability of slips under the
Declaration’s applicable definition. The Declaration indicates that navigability for
the purposes of the agreement is “18 inches of water at mean low tide.” 166 The
predicate issue to be established upon the merits is whether the actual depth of the
marina falls short of 18 inches and constitutes a breach of contract, as the Declaration
forms an “ordinary contract” among the unit owners. 167
As noted in the facts above, if a slip becomes non-navigable, the unit using
that slip may notify the HOA in writing, presumably implying a right to relief—
dredging or some other “mutually agreeable” action—regarding that slip.168
Yeilding is assigned slip 5 by the HOA, 169 Unit #5 is assigned slip 1, Unit #4 is
assigned slip 2, and Unit #2 is assigned slip 3. 170
The parties presented two different expert witnesses at trial. Plitko, the
Plaintiffs’ expert, provided a survey that demonstrated a depth of under 18 inches in
166
JX 4, at Yeilding/Myers000411.
167
See Council of Dorset Condo. Apartments v. Gordon, 801 A.2d 1, 5 (Del. 2002).
168
JX 4, at Yeilding/Myers000411.
169
See Trial Tr. 37:18–38:2.
170
JX 20.
33
slips 1 and 2 at mean low tide. 171 Plitko’s survey also demonstrated that slip 5 had
sufficient depth to be navigable under the definition in the Declaration.172 The
Defendants’ expert, Maurmeyer, also prepared a report that assessed the depth of
each of the Pelican Cove slips.173 Maurmeyer’s report also showed that slip 5—and
all other slips—were navigable per the terms of the Declaration. 174
Because Yeilding is assigned to slip 5, he does not have a right to enforce the
navigability or lack thereof in slips 1 and 2. Both of the expert witnesses showed
that slip 5, assigned to Yeilding, was sufficiently navigable.175 Therefore, he has not
shown a breach of contract under the Declaration.
The Plaintiffs challenge this conclusion, arguing that the Third Amendment
to the Declaration “guarantees” to all unit owners “seven (7) navigable boat slips.”176
But this is not how the Declaration reads. The Declaration states as follows:
The pier has 7 boat slips that make up the marina. . . .
Each unit is entitled to one navigable boat slip. . . . Should
a unit using a slip that has become un-navigable wish to
have the slip returned to a navigable condition, the unit
shall notify the Condominium in writing. . . . The right of
each unit to a navigable boat slip is guaranteed by this
agreement.177
171
JX 8.
172
See id.173
See JX 18.
174
See id.175
See JX 8; JX 18.
176
See Post-Tr. OB 8.
177
JX 4, at Yeilding/Myers000411 (emphasis added).
34
Nowhere does the text of the Declaration guarantee seven navigable slips to
any one unit owner, or to the collective of owners. Rather, the Declaration clarifies
in two instances that “[e]ach unit is entitled to one navigable boat slip” and that the
“right of each unit to a navigable boat slip” is guaranteed.178 In fact, the contractual
language contemplates that unit owners may waive the right to a navigable slip.
Yeilding cannot assert a right to seven navigable boat slips; he can only assert a right
with respect to the slip assigned to him—slip 5. As discussed above, slip 5 is
navigable. Therefore, any breach of contract claim cannot be found meritorious.
The Plaintiffs have separately intimated that the HOA’s application to renew
its subaqueous lease with DNREC was made lacking proper authority. The predicate
claim is unclear.179 The Plaintiffs appear to suggest that the HOA’s actions were
not pursuant to a proper vote, and that “committing the owners” to a renewal
thereby—including Yeilding and his 34% interest—puts the Plaintiffs (and other
unit owners) on the hook for the costs of maintenance, repairs, insurance, and storm
damage—the costs of maintaining a marina—without a vote.180 This argument, in
light of the Plaintiffs’ other arguments regarding the marina, fails a sniff test.
Yeilding himself testified that “one of the main reasons why we purchased the unit,
178
See id. (emphasis added).
179
The post-trial reply brief attempts to make an argument for a breach of contract based on the
potential subaqueous lease number and lease duration; this argument I confess I cannot follow. See
Post-Tr. RB 16; see also JX 4, at Yeilding/Myers000411.
180
Stip. at I ¶ 2a; Post-Tr. RB 16.
35
is because of the marina.”181 A substantial part of this litigation involved Yeilding’s
argument that the Plaintiffs have a right to have the entire marina dredged, sufficient
to make each slip navigable. As the Plaintiffs also point out, the Declaration
provides for the maintenance of the marina for the unit owners.182 Yeilding’s
separate argument that the subaqueous lease renewal application was ultra vires
because he was denied a right to vote against the authority of the HOA to apply for
a permit to maintain the (Declaration-required) marina is insufficient to support
injunctive relief. Given the Plaintiffs’ request that I enjoin the HOA to dredge the
marina,183 it is unclear what remedy they even seek in connection with the HOA’s
subaqueous lease renewal application. And while the Plaintiffs also argue defects
in the renewal application itself, if true this still leaves the question of what right the
Plaintiffs seek to vindicate in this context, or how equity may vindicate that right.
No cogent claim appears to have been made here, whether for breach of
contract or otherwise. 184 Because no meritorious claim has been proven by the
181
Trial Tr. 33:2–9.
182
JX 4, at Yeilding/Myers000411.
183
Post-Tr. OB 14.
184
Yeilding testified that he is dissatisfied with slip 5 because it does not provide space for a boat
lift. See Trial Tr. 34:15–24. The Declaration does not guarantee ability to install a boat lift,
however. See JX 4, at Yeilding/Myers000411. Yeilding also complains that his access to the
finger pier associated with slip 5—and thus access to his boat—is partially blocked or made less
convenient by a neighbor’s boat lift. See Trial Tr. 35:20–24. Yeilding has not sought relief on this
ground, in any event.
36
Plaintiffs with respect to the marina depth or the subaqueous lease renewal
application, their request for related injunctive relief is denied.
D. Common Area Rental Rules
Finally, the Plaintiffs seek a negative injunction enjoining the HOA from
posting or enforcing the Rental Rules, especially Rule 3. 185
In support, the Plaintiffs argue that the Rental Rules violate both the
Declaration and the Unit Properties Act. The argument focuses wholly on Rule 3,
which reads: “No parties or large social gatherings. People other than those in the
rental party are not allowed on the property. No visitors are allowed.”186 For the
reasons articulated above, my analysis focuses on the contractual argument.187
The Declaration states that the “undivided interest in the common
elements . . . shall not be separated from the unit to which said interest appertains,
and shall be . . . leased . . . with the unit even though such interest is not expressly
mentioned or described in a conveyance or instrument.”188 In chief, the Plaintiffs
contend that each lessee—including those renters to whom the Yeildings “lease”189
185
Post-Tr. OB 14. It is not clear that the Plaintiffs solely challenge Rule 3, but it is the sole focus
of their arguments. See id. (“The relief requested on this issue is a negative injunction enjoining
the Council from posting or enforcing the rule limiting tenants’ rights.”).
186
JX 22.
187
The statutory argument is largely duplicative of the allegations of breach of the Declaration, I
note.
188
JX 1, at Yeilding/Myers000359 (emphasis added).
189
I note that the terms renter/lessee/tenant, rent/lease, and other variations appear to have been
used somewhat interchangeably both in the previous litigation and in the briefing and argument
here. See, e.g., Council of Ass’n of Unit Owners of Pelican Cove Condo. v. Yeilding, 2019 WL
2339531, at *5 (Del. Ch. June 3, 2019). No real briefing has been attempted on the precise issue
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Unit #7 at various times throughout the year—is entitled to equal use of the common
elements with other lessees and owners. 190 The Plaintiffs read Rule 3 (denominated
as a Rental Rule) to treat owners differently from tenants/lessees, by allowing
owners to invite guests to common-area parties, while denying that use to renters.191
Per the Plaintiffs, according to the Declaration, unit owners and renters must have
the same rights to the common areas.192 By prohibiting use of the common area by
renters’ “guests,” while not so limiting owners’ guests, the Defendants have
breached the Declaration via the Rental Rules.193
The Plaintiffs’ reading of the Rental Rules appears, at first blush, to be strictly
based upon the title (“PELICAN COVE BEACH HOUSE RENTAL RULES”).194
The Defendants’ response to this count is largely predicated upon the supposition
that the rules in fact treat tenants and owners identically.195 But the joint exhibit
describing the Rental Rules submitted to the Court specifies at the bottom of the
page, “**These rules apply to renter [sic] and are not applicable to Pelican Cove
of the relationship engendered between Yeilding and those who lease and/or rent Unit #7 from him
upon occasion, though the Plaintiffs assert the relationship rises to the level of a “landlord-tenant
relationship.” See Post-Tr. RB 19. It seems to me that argument on this issue could have been
helpful, as it is not entirely clear that Yeilding’s renters are in fact contractual lessees, but as the
issue has not been pursued, I assume, without finding, that those renting from the Yeildings are
“lessees.”
190
See Post-Tr. OB 11, though I note that most of this discussion is in the context of the statutory
challenge to the Rental Rules under the Unit Property Act.
191
See id.192
See id. at 12.
193
See, e.g., Post-Tr. RB 19.
194
JX 22 (emphasis added).
195
Post-Tr. AB 22.
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owners**.”196 The joint exhibit makes it clear that the Defendants’ theory is
inaccurate. 197 Accordingly, I find that the Rental Rules treat short-term renters’
rights to the common areas as inferior to that of owners. I assume that a short-term
rental is a type of “lease” under the terms of the Declaration. 198
For purposes of this analysis, then, I find the Rental Rules, at Rule 3, to be in
conflict with the Declaration. I turn to the request for injunctive relief.
The only basis for irreparable harm that the Plaintiffs have posited is the
Rental Rules’ interference with a property right. 199 And indeed, this Court has held
before that interference with a property right itself constitutes irreparable harm.200
Here, however, the harm, if any, is more attenuated. The Plaintiffs themselves are
owners, and Rule 3 does not impinge on their right to invite guests to bacchanals in
the common area—in fact it is their purported freedom to engage in common-area
revelry, as owners, that sets up the impermissible distinction regarding their tenants.
If the Plaintiffs are suffering harm, then, it must be because their tenants’ rights to
196
JX 22.
197
I do note for fairness’s sake that the Code of Regulations, which does act upon the owners,
identifies “Rules of Conduct” somewhat similar to the third Rental Rule, requiring residents to
exercise “extreme care not to make noises or use musical instruments, radios, televisions, or
amplifie[] in such volume as to disturb other residents.” JX 5, at Yeilding/Myers000377. So,
while the Code of Regulations does not specifically prohibit the owners from throwing common-
area parties, the intent is likely similar across the different provisions.
198
See supra note 188.
199
Post-Tr. RB 20; Compl. ¶ 72; Post-Tr. OB 15.
200
See, e.g., Vansant v. Ocean Dunes Condo. Council Inc., 2014 WL 718058, at *1 (Del. Ch. Feb.
26, 2014); Kusumi v. Sproesser, 2021 WL 4059960, at *3 n.15 (Del. Ch. Apr. 7, 2021); Kuhns v.
Bruce A. Hiler Delaware QPRT, 2014 WL 1292860, at *23 (Del. Ch. Mar. 31, 2014); Bogia v.
Kleiner, 2019 WL 3761647, at *9 (Del. Ch. Aug. 8, 2019).
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such bacchanals are an important consideration for rentals, and thus Rule 3 is
harming the Plaintiffs’ rental business. The record is silent in support of this
contention;201 in fact, the Plaintiffs’ own rental agent has stated the opposite to the
HOA, noting that “renters now a days [sic] are savvy to the restrictions and know
how to get around them.” 202 This statement at least suggests that the number of
renters who decide not to rent Unit #7 as a result of the Rental Rules, if any, is
minimal. In any event, such a loss to the Plaintiffs could presumably be remedied
by damages in the case of a discrete inability to rent.203 On the record created at
trial, there is no basis to conclude, even if the distinction drawn against tenants in
the Rental Rules violates the Declaration, that the Plaintiffs will suffer irreparable
harm absent an injunction.
If this were a better world, I would be confident that the parties 204 could agree
to a minor modification of the Rental Rules that would permit restriction of the kind
of anti-social behavior obnoxious to the HOA, while still in compliance with the
201
The closest the Plaintiffs come to providing evidence on this front is Yeilding’s testimony that
some renters have been “contacted by owners, that were going to have some people over.” Trial
Tr. 46:16–47:10. But there is no allegation that any rental business was lost as a result of this
contact. See id.202
JX 20.
203
Of course, if the Plaintiffs had provided persuasive evidence that their rental business in their
unit was being harmed in a way tangible but unquantifiable, irreparable harm would have been
shown and would, perhaps, justify injunction. No such showing was proven here.
204
To be “neighborly,” per Mr. Webster, is to be friendly. “Neighbor” is the root of “neighborly.”
The connection between the words, alas, is tenuous.
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Declaration. Sad experience has disabused me of such confidence. Nonetheless, I
cannot provide the relief in equity the Plaintiffs seek here.
III. CONCLUSION
The Plaintiffs’ requests for injunctive relief and declaratory judgment are each
individually DENIED for the foregoing reasons. The parties should submit a form
of order.
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