Ocean Bay Mart, Inc. v. The City of Rehoboth Beach

SUPERIOR COURT
OF THE
STATE OF DELAWARE
E. SCOTT BRADLEY l The Circle, Suite 2
JUDGE GEORGETOWN, DE 19947
TELEPHONE (302) 856-5256
March 12, 2019
MaX B. Walton, Esquire
Richard A. Forsten, Esquire
Connolly Gallagher
Saul Ewing Arnstein & Lehr
P.o. BOX 1266 267 East Main street § m,§
Wilmington, DE 19899-1266 Newark, DE 19711 ; §§
5 nga
Re: Ocean Bay Mart, Inc. v. T he City of Rehoboth Beach § §§
§§
?
l
Civil Action No. SlSA-OZ-OOI ESB
SE 01 `v’
Ml `
AHV.[U
Dear Counsel:
This is my decision on Petitioner Ocean Bay Mart, Inc’s Petition for a Writ of
Certiorari and the Motion to Dismiss that petition filed by Respondents the City of
Rehoboth Beach, DelaWare, and the Commissioners of the City of Rehoboth Beach
in this case involving a proposal by Ocean Bay Mart to build a 63 -unit condominium
development to be known as “Beach Walk” on a 7.83 acre parcel of land that it owns
at 20673 Coastal Highway, Rehoboth Beach, Delaware. “Beach Walk” consists
largely of single-family detached condominium units, making it look like a residential
subdivision.
There are two issues in this case. The first issue is Whether “Beach Walk” 1s
subject to the City’s subdivision requirements even though it is a condominium
development The City Building Inspector thought so. The City Board of
Adjustment did not think so. The City Planning Commission and City
Commissioners both thought so, reasoning that 25 Del. C. §81-105(b)(l)’s statement
that a condominium unit, together with its interest in the common elements,
constitutes for all purposes a separate parcel of real estate and, as such, mandated
compliance with the City’s subdivision requirements Section 81-105 deals with the
titling and taxation of condominium units and common elements. Ocean Bay Mart
disagrees with the Commissioners’ reasoning, arguing that §81-105(b) has no
application to the City’s subdivision requirements Ocean Bay Mart is seeking
certiorari review of the Commissioners’ decision.
The second issue is whether City Ordinance 1116-01 is applicable to “Beach
Walk.” Ordinance 1116-01 provides that “no more than one single-family detached
dwelling with its customary non-habitable accessory buildings may occupy or be
constructed upon any lot.” Ordinance l l 16-01 was introduced by the Commissioners
after Ocean Bay Mart filed its application for site plan review with the Building
Inspector and adopted by the Commissioners before, but not relied upon by, the
Commissioners when they denied Ocean Bay Mart’s appeal of the Planning
Commission’s decision. IfOrdinance l l 16-01 applies to “Beach Walk,” then “Beach
Walk” would be subject to the City’s subdivision requirements The Commissioners
argue that it does, making Ocean Bay Mart’s request for certiorari review moot.
Ocean Bay Mart argues that it has no application to “Beach Walk.”
I have decided that I cannot now determine whether Ordinance l l 16-()1 applies
to “Beach Walk,” reasoning that this issue should, in the first instance, be presented
to and decided by the appropriate City officials I have concluded that the
Commissioners’ reliance on 25 Del. C. §81-105(b)(l) was an error of law because
§81-105(b)(l) deals with the titling and taxation of condominium units and common
elements and not subdivisions
STATEMENT OF FACTS
Ocean Bay Mart is the owner of` a retail shopping center located on the east side
ofRoute 1 in Rehoboth Beach known as “Ocean Bay Plaza” (the “Property”). Ocean
Bay Mart proposes to redevelop the Property by eliminating the shopping center and
replacing it with 63 residential condominium units on the 7.83-acre Property to be
called “Beach Walk.” “Beach Walk” would consist of 58 single-family detached
units and five single-family attached units On June 18, 2015, Ocean Bay Mart filed
its site plan application (the “Plan”) for review and approval by the City of Rehoboth
Beach, Delaware.
The City Building Inspector placed the application on the Planning
Commission’s November 2015 agenda for review and a public hearing. Shortly
thereafter, the Building Inspector removed the application from the agenda, claiming
that Ocean Bay Mart’s Plan needed to be resubmitted as a “subdivision” plan instead
of a site plan. Ocean Bay Mart then appealed the Building Inspector’s decision to the
Board of Adjustment.
The Board of`Adlestlnelit Decision
The specific issue before the Board of Adjustment was the meaning of
Footnote l of Attachment l to the Table of Use Regulations to Chapter 270 of the
City Code. Footnote l provides “that no more than one main building may be erected
on a single lot.” The Building Inspector had concluded that Footnote l limited Ocean
Bay Mart to one building on its 7.83-acre Property. Thus, to get more buildings,
Ocean Bay Mart would have to go through the subdivision process The Board
concluded that Footnote l was ambiguous and reversed the Building Inspector’s
decision. The practical effect of the Board’s decision was to allow Ocean Bay Mart
to put more than one building on its Property. The Board’s decision was consistent
with the City’s past practice of not requiring a condominium plan to be reviewed as
a subdivision plan and instead allowing condominium plans to be reviewed and
approved under the site plan process No one appealed the Board’s decision.
The Planning C`ommission Decision
Following the Board’s decision, the matter was placed on the Planning
Commission’s August 12, 2016, agenda so that the site plan review could be
completed. However, instead of reviewing the Plan, the Commission asked for
briefing on whether it was bound by the Board’s decision. The Briefing was done
and the Commission met on January 13, 2017. There were three issues before the
Commission. One, whether the Commission was bound by the Board’s decision.
Two, whether “Beach Walk” was subject to subdivision review. Three, whether
“Beach Walk” was required to be zoning compliant. The Commission members
discussed 25 Del. C. §81-105(b)(l), the condominium form of ownership, a proposed
ordinance that would become Ordinance 1116-01, and the City’s subdivision
requirements Ultimately, the Commission refused to consider Ocean Bay Mart’s
Plan and concluded that “Beach Walk” would have to go through subdivision review
with one commissioner stating, “that if it looks like a subdivision, and it smells like
a subdivision, then it is a subdivision.” In making this determination, the
Commission relied upon 25 Del. C. §81-105(b)(l), which states:
(b) In a condominium or planned community:
(l) If there is any unit owner other than a
declarant, each unit that has been created, together with its
interest in the common elements, constitutes for all
purposes a separate parcel of real estate.
The Commission told Ocean Bay Mart that unless it submitted a full
“subdivision” plan for review within 60 days, it would consider the Plan rejected.
Ocean Bay Mart refused to submit a subdivision plan and instead appealed the
Commission’s decision to the City Commissioners
The Citv Commissioners Decision
The City Commissioners retained independent counsel to advise them in this
matter because the City Solicitor, who usually advises them, was representing the
Planning Commission in the appeal. Following extensive briefing on the matter, on
January 26, 2018, the City Commissioners voted 4-2 to uphold the Planning
Commission’s decision, stating:
[t]his decision [is] based on the fact that the Planning
Commission made the proper decision in applying 25 Del. C.
§81-105(b)to conclude that the creation of 63 condominium units
from one acre of land is the legal equivalent of creating 63 parcels
of real estate, which require subdivision approval.
In coming to this conclusion, the Commissioners claimed that the Board of
Adjustment’s decision could be ignored because it did not consider 25 Del. C. §81-
105(b)(l). Following the Commissioners’ decision, Ocean Bay Mart then petitioned
this Court for certiorari review.
Ordinance l l 16-01
While Ocean Bay Mart’s Plan was before the Planning Commission, the City
Commissioners began considering an amendment to the City Code in response to the
Board of Adjustment decision, The amendment would ultimately become Ordinance
ll 16-01, the ordinance upon which the city bases its Motion to Dismiss. Ordinance
1116-01 provides that “no more than one single-family detached dwelling with its
customary non-habitable accessory buildings may occupy or be constructed upon any
lot.”
Neither the Planning Commission nor the City Commissioners brought up
Ordinance 1116-01 when considering Ocean Bay Mart’s Plan. Hence, the City
Commissioners’ decision makes no reference to Ordinance 1116-01 even though it
was enacted before they considered and ruled on Ocean Bay Mart’s appeal of the
Planning Commission’s decision,
DISCUSSION
I. The Commissioners" Motion to Dismiss
The Commissioners have moved pursuant to Superior Court Civil Rule
12(b)(6) to dismiss Ocean Bay Mart’s Petition for a Writ of Certiorari, arguing that
the petition is moot because Ordinance 1116-01 applies to and prevents Ocean Bay
Mart’s “Beach Walk” development from moving forward without going through the
City’s subdivision process Ocean Bay Mart argues that Ordinance 1116-01 by its
own language does not apply to “Beach Walk.”
The City, like most municipalities has a land use process consisting of a
Building Inspector, Board of Adjustment, Planning Commission, and Commissioners
Thus far, the issues surrounding “Beach Walk” have focused on the subdivision
process and involved the meaning and application of Footnote l to the Table of Use
Regulations to Chapter 270 of the City Code and 25 Del. C. §81-105(b)(l). The
Board of Adjustment finally decided the meaning and application of Footnote l. The
Commissioners decided the meaning and application of §81-105(b)(l). The
Commissioners’ decision is before me for certiorari review and l will address that in
the second part of this decisionl In the middle of the land use process for “Beach
Walk,” the Commissioners passed Ordinance l l 16-01. The meaning and application
of Ordinance l l 16-01 to “Beach Walk” have not been addressed by any City official
as part of the land use process It should be addressed there first and not raised here
for the first time on certiorari review. For me to address it now would require me to
give an advisory opinion, which would not be appropriatel
II. Ocean `Bav Mart’s Writ oil`Certiorari
Ocean Bay Mart is seeking certiorari review of the Commissioners’ decision,
‘ Stroud v. Mller Enterprises, 552 A.2d 476, 480 (Del. 1989).
8
arguing that the Commissioners’ reliance on 25 Del. C. §81-105(b)(l) was an error
of law. The Commissioners upheld the Commission’s decision, reasoning that 25 Del.
C. §81-105(b)(1) mandates that a 63-unit condominium on one parcel of real estate
is actually 63 parcels of real estate and, as such, must comply with the City’s
subdivision requirements The Commissioners’ decision implicates §81-105, which
is part of the Uniform Common Interest Ownership Act. Section 81-105 is titled
“Separate titles and taxation” and states as follows:
(a) In a cooperative, unless the declaration
provides that a unit owner’s interest in a unit and its
allocated interests is real estate for all purposes, that
interest is personal property. That interest is subject to
the provisions of homestead exemptions, even if it is
personal property.
(b) In a condominium or planned community:
(l) If there is any unit owner other than a
declarant, each unit that has been created, together with
its interest in the common elements, constitutes for all
purposes a separate parcel of real estate.
(2) If there is any unit owner other than a
declarant, each unit must be separately taxed and
assessed, and no separate tax or assessment may be
rendered against any common elements for which a
declarant has reserved no development rights
(c) Any portion of the common elements for which
the declarant has reserved any development right must be
separately taxed and assessed against the declarant, and
the declarant alone is liable for payment of those taxes
(d) If there is no unit owner other than a declarant,
the real estate comprising the common interest
community may be taxed and assessed in any manner
provided by law.
Standard of Review
“Under Delaware law, a writ of certiorari is essentially a common law writ.”2
Its purpose “is to permit a higher court to review the conduct of a lower tribunal of
record.”3 Under this common law writ, this Court has the power to quash or affirm
the proceedings and to remand.”4 The “threshold qualifications for a Certiorari
review . . . [are] in particular that the judgment below is final, and that there must be
no other available basis for review.”5 The Court’s review on certiorari “involves a
2 Goldberg v. Cin of Wilrnl`ngmn, 1992 WL 114074, at *1 (Del. Super. Ct.
May 26, 1992); See also Christl`ana Towrl Ctr., LLC v. New Castle County, 2004
WL 2921830, at *2 (Del. Dec. 16, 2004) (Citing Shoemaker v. State, 375 A.2d
431, 436-37 (Del. 1977); Woolley, Delaware Practice, Volume I, § 894. See e.g.
Huna’ley v. O’Donnell, 1998 WL 842293, at *3 n. 7 (Del. Ch. Dec. 1, 1998).
3 Christl`ana Town Ctr., LLC, 2004 WL 2921830, at *2.
4chra’el C0., Inc. v. Carroll, 1990 WL 18296, at *2 (Del. Super. Ct. Feb. 26,
1990); State v. JP. Ct. N0. 7, 1989 WL 31600, at *1 (Del. Super. Ct. April 3,
1989); Breasure v. Swartzentruber, 1988 WL 116422, *1 (Del. Super. Ct. Oct. 7,
1988) (citations omitted).
5 Christiana Town Ctr., LLC v. New Castle Courzly, 2003 WL 22120857, at
*l (Del. Super. Ct. Sept. 10, 2003). See e.g. Aa’jz‘le, Inc. v. City of Wilmington,
2004 WL 2827893, at *1 (Del. Super. Ct. Nov. 30, 2004), ajj”’a’, 2005 WL
1139577 (Del. May 12, 2005).
10
376
review only of errors that appear on the face of the record. Certiorari review differs
from appellate review in that an appeal “brings up the case on its merits,” while a writ
brings the matter before the reviewing court to “look at the regularity of the
proceedings.”7 Thus, certiorari review “is not the same as review on appeal” because
it “is on the record and the reviewing court may not weigh evidence or review the
lower tribunal’s factual findings.”8 To that end, the “transcript of the evidence below
is not part of the reviewable record the Court cannot examine the transcript in order
to evaluate the adequacy of the evidence which supports the conclusion rendered
below.”9 lt is the function of “the agency, not the court, to weigh evidence and
6Luby v. Town omeyrna, 2001 WL 1729121, at *2 (Del. Super. Dec. 27,
2001), citing Castner v. State, 311 A.2d 858, 860 (Del. 1973).
7Breczsi¢re, 1988 WL 116422, at *1.
8 Christiana T own Ctr., LLC, 2004 WL 2921830, at *2, citing Reise v. Ba’. of
Bldg. Appeals ofNewark, 746 A.2d 271, 274 (Del. 2000).
9 Green v. Sussex Coumfy, 668 A.2d 770, 773 (Del. Super. Ct. 1995), ajj”’d,
1995 WL 466586 (Del. Aug. 2, 1995). See e.g. Matter ofButler, 609 A.2d 1080,
1081-82 (Del. 1992) (declining to consider a transcript of the underlying Superior
Court proceedings or overrule Castner, 311 A.2d 858, and holding that the
Superior Court’s order “is the entire record before us for purposes of certiorari
review.”). Cf. Barbour v. Bd. ofAdjustment of Bethariy Beach, 1992 WL 302292,
at *2 (Del. Super. Ct. Sept. 28, 1992) (Noting that “statutory writ of certiorari is
broader and allows for the filing of a transcript of the evidence” but that “a
transcript could not be filed in a common law certiorari proceeding since the
reviewing court was prohibited from considering the evidence before the lower
tribunal.”).
11
resolve conflicting testimony and issues of credibility.”lo Thus, the Court does not
consider the case below “on its merits” or “substitute its own judgment for [that] of
the inferior tribunal.”l' Instead, the Court’s review is limited to considering “the
record to determine whether the lower tribunal[:]” (a) exceeded its jurisdiction, (b)
committed errors of law, or (c) proceeded irregularly.12 A decision “will be reversed
on jurisdictional grounds only if the record fails to show that the matter was within
the lower tribunal’s personal and subject matter jurisdiction.”13 A decision “will be
reversed for an error of law when the record affirmatively shows that the lower
tribunal has ‘proceeded illegally or manifestly contrary to law. ”’14 Finally, a decision
“will be reversed for irregularities of proceedings if the lower tribunal failed to create
an adequate record to review.”]5 The “burden of persuasion rests upon the party
‘0 Christiana Town Ctr., LLC v. New Castle County, 2004 WL 1551457, at
*2 (Del. Super. July 7, 2004), aj§‘"’d, 2004 WL 2921830 (Del. Dec. 16, 2004).
“ Christina Town Ctr., LLC, 2004 WL 2921830, at *2; Breasure, 1988 WL
116422, at *1.
‘2 Christiana Town Ctr., LLC, 2004 WL 2921830, at *2, citing Reise, 746
A.2d at 274.
'3 Id. at *2, citing Woolley, Delaware Practice, Volume I, § 921.
'4 Christiana Town Ctr., LLC, 2004 WL 2921830, at *2, citing Woolley,
Delaware Practice, Volume 1, § 939.
‘5 Id. at *2, citing Woolley, Delaware Practice, Volume I, § 923.
12
attempting to show that the Board’s decision was arbitrary and unreasonable.”l6
Statutoly Construction
When interpreting the language of 25 Del. C. §81-105(b), l have to engage in
statutory construction. “The primary goal of statutory construction is to ‘ascertain
and give effect to the intent of the legislature.”’17 Intent is determined by the plain
language of the statute, and absent ambiguity, “there is no room for judicial
interpretation and ‘the plain meaning of the statutory language controls.”’18 Indeed,
“[i]n the absence of any ambiguity, the language of the statute must be viewed as
conclusive of the legislative intent. The judicial role is then limited to an application
of the literal meaning of the words.”19 Absent ambiguity, the Court cannot look to
‘6 Christina Town Ctr., LLC, 2004 WL 1551457, at *2.
‘7 Acaa’ia Brana’j/wine T own Ctr., LLC v. New Castle Cnty, 879 A.2d 923,
927 (Del. 2005) (citing Dir. UfRevenue v. CNA Hola’ings, Inc., 818 A.2d 953, 957
(Del. 2003)); see also Norman J. Singer, Sutherlana’ Statues ana’ Statutory
Construction, §78:3 (7th ed. 2015) (“The key to interpreting a statute is to
ascertain and effectuate legislative intent as expressed in the statute. The statute’s
language is the best and most reliable index of the statute’s meaning ....”).
'8 PHL Variable Ins. C0. v. Price Dawe 20061ns. Trust, 28 A.3d 1059,
1070 (Del. 2011); see also Norman J. Singer, Sutherlana’ Statutes ana’ Statatory
Construction, §46:1 (7th ed. 2015) (“the rules of statutory construction favor
according statutes with their plain and obvious meaning and courts assume the
legislature knew the plain and ordinary meanings of the words it chose to include
in a statute.”).
‘9 Grana’ Ventures, Inc. v. Whaley, 632 A.2d 63, 68 (Del. 1993) (internal
citation omitted).
13
legislative history to determine the meaning of the legislative enactment.20 There are
two other rules of statutory construction that are applicable. First, the expression of
one thing but not another is interpreted to mean that omitted items were not meant to
be included.21 Second, and especially important here, Zoning codes are interpreted
in favor of property owners22
Section 81-105
Section 81-105 focuses, as its title and text indicate, on the titling and taxation
of real estate. lt does not focus on, or even address, the subdivision of real estate. The
most reasonable view of§81-105(b) is that in a condominium development it sets up
various categories of ownership of the units and common elements and provides for
their taxation accordingly. There are several categories that §81-105(b) addresses
The first category involves unit owners and a declarant who has not reserved any
development rights Subsection (b)( 1) and (2) address that situation and provide that
20 Arnola’ v. Society for Sav. Bancorp., ]nc., 650 A.2d 1270, 1287 (Del.
1994) (“A court should not resort to legislative history in interpreting a statute
where statutory language provides unambiguously an answer to the question at
hand.”); Pellicone v. New Castle Cnty., 88 A.3d 670, 675, n.21 (Del. 2014).
2‘ See, e.g., Walt v. State, 727 A.2d 836, 840 (Del. 1999), citing Hickman v.
Workman, 450 A.2d 338, 391 (Del. 1982).
22 Chase Alexa, LLC, 991 A.2d at 1152; Mergenthaler v. State, 293 A.2d
287, 288 (Del. 1972).
14
a unit and its interest in the common elements is treated as a separate parcel of real
estate and is taxed as such. The second category involves unit owners and a declarant
who has reserved development rights in a portion of the common elements
Subsection (c) addresses that situation and provides that the declarant shall be taxed
for his reservation of development rights in the common elements The third category
is if there is only a declarant Subsection (d) addresses that situation and provides
that the real estate comprising the common elements may be taxed in any manner
provided by law.
lt is clear that §81-105(b) focuses on the ownership and taxation of units and
common elements under various scenarios While the language “constitutes for all
purposes a separate parcel of real estate” sounds enticing, l must consider it in the
context in which it was made. That context is the ownership and taxation of
ownership interests in common elements between unit owners and a declarant That,
in my view, makes §81-105(b) applicable to conveyancing and tax matters That
context would not make §81-105(b) applicable to subdivisions
l have concluded that the Commissioners made an error of law when they
concluded that 25 Del. C. §81-105(b) makes “Beach Walk” subject to the City’s
subdivision requirements
15
CONCLUSION
The Respondents’ Motion to Dismiss is denied and their decision below is
reversed and remanded for further proceedings consistent with this decision,
IT lS SO ORDERED.
_//'F<=’//
E. Scott Bi"adley
ESB/jwc
16