Middlecap Associates, LLC v. The Town of Middletown

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
MIDDLECAP ASSOCIATES, LLC, )
)
Plaintiff, )
)
v. ) C.A. No. N23C-03-181 CEB
)
THE TOWN OF MIDDLETOWN, a )
municipal corporation of the State of )
Delaware, THE TOWN OF )
MIDDLETOWN TOWN COUNCIL, )
the governing body of the Town of )
Middletown, and KENNETH L. )
BRANNER, JR., JAMES REYNOLDS, )
AARON BLYTHE, JAMES ROYSTON, )
DREW CHAS, ROBERT MCGHEE and )
ROBERT STOUT, in their individual )
and official capacities as Members of the )
Town of Middletown Town Council, )
)
Defendants. )
Submitted: May 29, 2024
Decided: July 11, 2024
OPINION
Upon Certiorari Review of the
Denial of a Conditional Use Permit,
REVERSED.
John W. Paradee, Esquire, and Mark A. Denney, Jr., Esquire, BAIRD, MANDALAS
& BROCKSTEDT, LLC, Dover, Delaware. Attorneys for Plaintiff.
Scott G. Wilcox, Esquire, GIORDANO, DELCOLLO, WERB & GAGNE, LLC,
Wilmington, Delaware. Attorney for Defendants.
BUTLER, R.J.
BACKGROUND
Middlecap Associates, LLC (“Middlecap”) is a landowner in Middletown,
De. It seeks to develop a plot of approximately 15 acres on Dove Run Centre Drive
by constructing a garden apartment complex of 192 units.
The zoning for the property is C-3. Under the Middletown zoning code, C-3
is designated for “Employment/Regional Retail,” intended to “provide service and
retail environments and employment/office opportunities in a manner compatible
with the historic character, scale, and architectural type of Middletown.”1 In order
to build an apartment complex on the property, Middlecap needs a “conditional use
permit.”
A conditional use permit is a device whereby the governing body can review
a planned improvement to the property and attach conditions to the permit. So, for
example, while a shopping center is permitted in zone C-3 as a matter of right, C-3
zoning also permits, “subject to receiving a conditional use permit by the Town
Council,” 1) daycare centers, 2) sales of goods from transient vehicles and 2) garden
apartments.2
1
Middletown Zoning Code, page 40.
2
Zoning code page 43-44. Although garden apartments require a conditional use permit in zone
C-3, garden apartments are permitted as a matter of right in zone R-3 “Multi-Family Residential.”
Zoning code page 31.
1
The Middletown zoning code provides for a zoning board of adjustment,
which exercises the powers typical of most zoning boards, considering appeals of
zoning variances and other exceptions. 3 But the zoning board of adjustment does
not hear requests for conditional use permits. Rather, conditional use permits are
granted by the Town Council, “issued after consultation and review by the Planning
Commission.”4 In this case, Middlecap brought its plans to the Planning
Commission, but the Planning Commission voted against grant of the permit by a
vote of 6-1.
Undaunted, Middlecap brought its request to the Town Council. The Town
Council’s action is the subject under review in this lawsuit. The Town Council held
a public hearing on the application. Middlecap made a presentation, demonstrating
the plot plan, drawings and spoke of the effects of the complex on traffic in the area.
After questioning by some council members, a vote was held, and the conditional
use permit was denied by a council vote of 4-0.
PROCEDURAL HISTORY
Middlecap’s effort to obtain judicial review of the town council’s action first
took the form of a “Verified Petition” in the Court of Chancery. There followed
motions practice in the Court of Chancery. On February 2, 2023, the Court of
3
Chapter 8 of the zoning code.
4
Section 10.A.(1)(b).
2
Chancery issued its decision in Delta Eta v. Mayor and Council of the City of
Newark,5 holding that Chancery does not have jurisdiction over conditional use
permit disputes. Chancery went on to rule that a writ of certiorari, available in
Superior Court, would provide the plaintiff with an adequate remedy. Since this
case was essentially on all fours with Delta Eta, it too was dismissed by the Chancery
Court,6 leaving Middlecap with the option to transfer the dispute to Superior Court
– an option Middlecap exercised shortly thereafter. 7
Once in Superior Court, Middlecap re-filed its complaint. It then amended
the complaint to remove the request for an injunction and add a request for certiorari
review. There followed motions practice in this Court concerning the limitations
period for filing a petition for certiorari in Superior Court, as well as naming the
council members individually as defendants. These issues have been dealt with in a
separate opinion. 8 The parties then briefed their contentions on the merits of the
dispute.
5
Delta Eta v. Mayor and Council of Newark, No. 2021-1106-MTZ, 2023 WL 2982180 (Del. Ch.
Feb. 2, 2023).
6
Middlecap Assocs., LLC. v. Middletown, No. N23C-03-181 CEB, 2023 WL 2981893 (Del. Ch.
Feb. 2, 2023).
7
A full discussion of the procedural history is found in the Court’s previous denial of a motion to
dismiss the case on procedural grounds. See Middlecap Assocs., LLC. v. Middletown, No.
N23C-03-181 CEB, 2023 WL 6848999 (Del. Super. Oct. 16, 2023).
8
Id.3
STANDARD AND SCOPE OF REVIEW
Under the laws of Middletown, there is no right of appeal from the denial of
a conditional use permit. When there is no other available means to obtain judicial
review of a government action, a writ of certiorari, which commands the inferior
tribunal to deliver up the record to Superior Court for review, is the appropriate
pleading.
When reviewing a dispute under the Court’s certiorari jurisdiction, the Court
is not free to do a “deep dive” into the record. In any number of cases, the Delaware
Supreme Court has tackled the question of the scope of review and the “record
below” that may be considered in certiorari cases. Because the Court’s ruling here
is directly tied to the standard of review on certiorari, we will save further comment
for the Analysis below.
ANALYSIS
I. The Record Under Review in Certiorari Cases.
In Black v. New Castle County Board of License Review,9 the Supreme Court
reviewed an administrative decision of a county board on certiorari. The Court said:
“The standard for reviewing a petition for a writ
of certiorari is “strictly limited” the reviewing court “may
not weigh evidence or review the lower tribunal’s factual
9
Black v. New Castle Cnty. Bd. of License Review, 117 A.3d 1027 (Del. 2015).
4
findings. Likewise, the reviewing court may not “consider
the case on its merits.” As this Court has observed,
“[u]nder principles of law well established in this
State, certiorari involves a review of only such errors as
appear on the face of the record being considered.” 10
According to the Court, certiorari “brings up the record only so that the
reviewing court can merely look at the regularity of proceedings” and that:
“The reviewing court is then limited to determining based
on that limited record whether the lower tribunal: “(i)
exceeded its jurisdiction;” (ii) “proceeded illegally or
manifestly contrary to law”; or (iii) “proceeded
irregularly.” Reversible procedural irregularity includes a
tribunal’s failure to create an “adequate record” for
judicial review.11
Maddrey v. J.P. Court 13,12 was an appeal of a summary ejectment proceeding.
In her petition for certiorari relief in Superior Court, Maddrey argued that the
magistrate at her trial had erred in admitting an investigator’s report over a hearsay
objection. Superior Court ruled that the magistrate did not err, the report was
admissible, and denied relief.13
10
Id at 1030-31 (footnotes omitted).
11
Id at 1031 (footnote omitted).
12
Maddrey v. J.P. Court 13, 956 A.2d 1204 (Del. 2008).
13
Sub nom. Maddrey v. Arbor Mgmt., No. 06A-09-003 WCC, 2007 WL 3287942 (Del. Super.
Oct. 26, 2007).
5
On appeal to the Delaware Supreme Court, the Court said this:
On a common law writ of certiorari, the Superior Court
cannot look behind the face of the record. Rather, it can
only review the record for the purpose of confirming an
irregularity in asserting jurisdiction, an improper exercise
of its power or the declaration of an improper remedy by
the inferior tribunal. For a court to do anything more, such
as combing the transcript for an erroneous evidentiary
ruling as Maddrey asks us to sanction in this case, converts
the limited certiorari review of summary possession into
an impermissible full appellate review that is inconsistent
with both the function of the common law writ and the
General Assembly’s intent to terminate landlord tenant
possession disputes summarily. 14
The Supreme Court said “the evidence presented to the Justice of the Peace
Court, including the testimony reflected in the transcript, is not a proper part of the
record subject to Superior Court’s review.” 15 Doing so “necessarily contemplates
that the Court will weigh and evaluate the evidence,” and is little more than a “device
to circumvent the requisites of appellate jurisdiction of the Court.” 16
II. The Record Here is Limited to the Council’s Vote and Any
Explanation.
So far, we understand that certiorari review is limited to 1) jurisdiction, 2)
“manifest” errors of law, and 3) procedural “irregularity.” Jurisdiction is not at issue
in this dispute. Errors of law sit in that ambiguous space in which “manifest” error
14
Maddrey , 956 A.2d at 1215.
15
Maddrey , 967 A.2d at 1216.
16
Id (citing Castner v. State, 311 A.2d 858 (Del. 1973)).
6
is reversible, but due to the limited nature of the review on certiorari, a legal
conclusion about which there may be disagreement is not reviewable. The only
“error of law” the Court discerns from this record is the “procedural regularity”
question and, mindful of the Supreme Court’s admonition to avoid a detailed review
of the record, the Court limits its review to the actual votes by Council and its
explanations for voting in that manner. Thus, the review here is of the procedural
regularity of the Town Council’s vote.
a. There is no written opinion; the transcript is the only record.
In order to review the procedural regularity of the proceedings concerning the
conditional use permit request, the Court must be satisfied that the tribunal applied
the law to the facts. This is important because the failure to create an adequate record
for judicial review is itself a “procedural irregularity.” 17 Creating such an “adequate
record’ is usually accomplished in administrative cases because there is a written
Opinion of the board or agency. In the usual case, reference to the transcript of the
proceeding is unnecessary because the quasi-judicial rationale for the decision by
the agency is subsumed within its written opinion.
17
Christiana Town Ctr., LLC v. New Castle Cnty., No. 3342004, 2004 WL 2921830 (Del. Dec.
16, 2004) (citing Woolley, Delaware Practice, Volume 1, §923).
7
Here, there is no written Opinion, only a transcript of the proceedings before
the Council. While the entire transcript is outside the scope of review in a certiorari
proceeding, the transcript reflects the votes of the council members and their
reasoning for doing so. That record begins at page 40 and ends at page 42. Since it
is the only memorial of the “regularity” of the proceedings, it will be considered.
b. The votes and the stated reasons.
The transcript reflects Councilman Royston voted no, expressing that “I
believe we should deny the conditional use permit based upon the approval from
2020 commercial space center. I think we should maintain and retain the approved
plan.”
Councilman Blythe voted no, saying “I think it’s in conflict with the
comprehensive plan that we have talked about all night.”
Councilman Chas voted no “for the reasons previously discussed” and
because the comprehensive plan “was necessary at the time and still feel that the
residents deserve.”
Councilman Reynolds voted no, saying deviation from the present plan “is in
conflict with the general purposes of the comprehensive plan and related town
plans.”
8
Councilman McGhee voted no “because this would be detrimental to the
general purposes of the comprehensive plan.”
And with that, the plan was unanimously disapproved.
III. The Middletown City Code Requirements for Conditional Use
Permits.
In Middletown, the city code requires that a conditional use permit not:
(i) Affect adversely the health or safety of persons residing or working in
the neighborhood of the proposed use;
(ii) Be detrimental to the public welfare or injurious to property or
improvements in the neighborhood; and
(iii) Be in conflict with the general purposes of the Comprehensive Plan or
related Town planning or development policies.18
These are the standards against which the application for a permit must be
judged by the council, exercising its quasi-judicial function. And since “adverse
effects on health” or “detriment to public welfare” were not mentioned by the
council, it is safe to say that all votes were cast because the council felt the proposed
conditional use conflicted with “the general purposes of the Comprehensive Plan or
related Town planning or development policies.”
18
Middletown Zoning Code, §10.A(1).
9
Just what these general purposes are, or what related planning or development
policies were implicated by the application, or how the permit application conflicted
with those purposes is not part of the record under review. This is a problem.
Undoubtedly the parties would like to continue to argue the issue now, but the
Court is not a voting member of the town council and the merits are of no concern
at this point. What is concerning is the absence of any rationale for these
conclusions. The Court is not in a position to conduct judicial review of a vote that
simply recites the legal standard in conclusory fashion, devoid of any integration of
facts that support it.
As briefly as possible, let us consider that the General Assembly has the full
power to regulate land use throughout the state. 19 Its votes are a true exercise of
legislative power, limited only by the Constitution. When the power to regulate land
use is delegated to counties and towns, the power must be exercised within its
delegated limits, and whether the county or town has done so is subject to judicial
review, just as the county’s and town’s delegation of licenses or permits or zoning
variances are frequently delegated to administrative agencies. When a county or
town council retains the power to vote on a land use issue, it is subject to judicial
review just as an administrative agency is – to ensure that its actions are within the
19
Del. Const. art.II, §25.
10
delegated powers conferred by the higher authority and that it has acted with due
process. “Normal” legislative prerogatives of the legislative process are absent when
the legislative activity concerns delegated powers and, as we will see, legislators can
quite easily forget that a zoning decision does not offer the same freedom of choice
that other legislative affairs may.
IV. Land Use Decisions Require an Adequate Record for Judicial
Review.
The requirement of creating an adequate record for review is not a platitude.
In Miles v. County Council of Sussex County, 20 Sussex County Council rezoned some
land, saying the change was “in accordance with the comprehensive Development
Plan and promotes the health, safety, morals, convenience, order, prosperity and
welfare of the present and future inhabitants of Sussex County.” 21 The reader may
recognize this as the same sort of formulaic, conclusory language used by
Middletown here. The Chancery Court said “This statement is not a finding of fact
and provides the Court no guidance in attempting to review the Council’s
decision.”22 Moreover, citing multiple prior decisions,23 the Court said “For ten
20
Miles v. Cnty. Council of Sussex Cnty., 1985 WL 165744, at *2 (Del. Ch. Jan. 21, 1985).
21
Id.22
Id at *3.
23
Green v. Cnty. Planning & Zoning Comm’n. of Sussex Cnty., 340 A.2d 852 (Del. Ch. 1974);
Moore v. Gravenor, Del. Ch. C.A. 684-S, Hartnett, V.C. (March 7, 1978); Russell v. Cnty.
Council of Sussex Cnty., Del. Ch. C.A. 695-S, Brown, V.C. (April 25, 1978); Bay Colony, Ltd. v.
Cnty. Council of Sussex Cnty., et al., Del. Ch. C.A. 1001-S, Hartnett, V.C. (December 5, 1984).
11
years now the Council has been on notice that it must make findings of fact if its
zoning decisions are to withstand judicial review.”24 These rulings were adopted by
the Supreme Court on appeal in the oft cited case of Tate v. Miles. 25
In Christiana Town Center, LLC v. New Castle County, 26 a writ of certiorari
case, the Court said “A decision will be reversed for irregularities of proceedings if
the lower tribunal failed to create an adequate record to review.”27 In Reise v. Board
of Building Appeals of the City of Newark,28 the city agency revoked a rental permit
but did not provide a statement of the reasons. The Supreme Court said “it is settled
law that a quasi-judicial tribunal must state the basis for its decision, in order to allow
judicial review.”29
In New Castle County Council v. BC Development Associates,30 the county
council rejected a rezoning of the former Brandywine Country Club. As here, the
votes were cast with only perfunctory reasons given. The Court wrote that “when
Council makes a rezoning decision without establishing the basis for its action, it
24
Id.25
Tate v. Miles, 503 A.2d 187 (Del. 1986).
26
Christiana Town Ctr., 2004 WL 2921830.
27
Id at *2 (citing Woolley, Delaware Practice, §923).
28
Reise v. Bd. of Bldg. Appeals of Newark, 746 A.2d 271 (Del. 2000).
29
Id at 274.
30
New Castle Cnty. Council v. BC Dev. Assocs., 567 A.2d 1271 (Del. 1989).
12
thwarts the ability of a court to provide effective review.”31 As to exactly how
detailed that record must be, the Supreme Court said this:
insofar as Council simply “creates a record” and relies
upon that record to justify its decision, the record must
prove to be an adequate substitute for a more formal
explanation. Thus, Council's reasons must be clear from
the record. If several possible explanations for a given
decision appear on the record, the reviewing court must
not be left to speculate as to which evidential basis Council
favored. We lay down no precise formula that Council
must follow in order to satisfy the Tate requirements.
Nevertheless, we believe that when Council is faced with
a particularly complex zoning application and a large body
of conflicting evidence is presented for its consideration,
a formal statement of its findings would greatly aid the
process of judicial review. 32
The Court must conclude that merely reciting a code provision in support of
a “no” vote is not a statement of reasons for the vote. Certainly, a reviewing Court
does not need an extensive recitation of all the whys and wherefores, but some
connection of the facts as found by the council person and the legal standard being
applied is essential to ensure that the quasi-judicial decision was made with fidelity
to the law.
It is not as though the requirement of a record for judicial review is news to
the Town of Middletown. The Town Council was involved in a rezoning case
31
Id at 1276.
32
Id at 1276-77 (footnote omitted).
13
wherein these very principles were laid out specifically by the Vice Chancellor. In
the protracted litigation over a Walmart store location, O’Neill v. Town of
Middletown, one of the decisions voiding council’s rezoning vote was predicated on
council’s failure to articulate its reasons for finding that the planned commercial
activity was consistent with the Comprehensive Plan adopted by the city.33 Just as
a failure to articulate why a proposed rezoning is consistent with the Comprehensive
Plan is fatal to the council’s action, a failure to articulate why a conditional use is
inconsistent with the Comprehensive Plan is likewise fatal.
In light of the foregoing, the decision of the Town Council must be voided. It
may well be that the Council had bona fide reasons to deny the application that are
grounded in one or more of the three statutory criteria above. The Court merely
concludes that this record is not sustainable because it fails to articulate a record of
reasons sufficient for judicial review.
V. Plaintiff’s Remaining Claims are Dismissed.
As noted above, this dispute has had a somewhat unusual procedural history,
travelling from Chancery Court as a “Verified Petition” seeking injunctive relief to
33
O’Neill v. Middletown, No. Civ.A. 1069-N, 2006 WL 205071 at *34-36 (Del. Ch. Jan. 18,
2006).
14
Superior Court seeking certiorari. In both forums, however, the pleadings included
a prayer for declaratory judgment.
By this ruling, the Court does not conclude that Middlecap is entitled to a
conditional use permit. Rather, the Council’s vote was defective insofar as it failed
to articulate its rationale sufficiently for judicial review. Council is free to reject the
application again, should it be made, so long as it does so with reference to the
criteria in the code and articulates its reasoning in sufficient detail to demonstrate
that it proceeded with “regularity.”
In light of this ruling, the rights and duties of the parties remain where they
were. The Court therefore declines to rule on Plaintiff’s prayer for a declaratory
judgment.34 Plaintiff’s remaining arguments in favor of reversal of the Council’s
actions are dismissed as moot.
CONCLUSION
Chancery Court’s rejection of jurisdiction over conditional use permit
litigation may well give rise to additional lawsuits in Superior Court, invoking this
Court’s power to issue writs of certiorari. As we have seen here, certiorari review is
a different analysis from Chancery’s general equitable jurisdiction. Thus, questions
will need to be worked out, including how the standards traditionally referenced by
34
See 10 Del. C. §6501 (Court has discretion to refuse to enter a declaratory judgment).
15
Chancery will apply given the more limited review in certiorari cases. The Court
does not shy from the challenge, but the necessity of a record from which such
review can occur will remain as true in Superior Court as it has for many years in
Chancery Court.
IT IS SO ORDERED.
/s/ Charles E. Butler
Charles E. Butler, Resident Judge
16