1

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

WILD MEADOWS )

HOMEOWNERS ASSOCIATION, )

INC., )

)

Appellant, )

)

v. ) C.A. No.: K22A-02-001 RLG

)

WILD MEADOWS MHC, LLC, )

)

Appellee. )

MEMORANDUM OPINION AND ORDER

Submitted: June 11, 20241

Decided: July 22, 2024

Upon Appeal from a Final Decision and Order of the Arbitrator – AFFIRMED.

John S. Whitelaw, Esquire (argued); Anthony V. Panicola, Esquire; and Olga 

Beskrone, Esquire, Community Legal Aid Society, Inc.; Dover, Delaware, 

Attorneys for Appellant.

Robert J. Valihura, Esquire (argued) and David C. Zerbato, Esquire, Morton, 

Valihura & Zerbato, LLC; Greenville, Delaware, Attorneys for Appellee.

GREEN-STREETT, J.

1 The transcript from oral argument in this matter was not received until July 10, 2024.
2

I. Introduction

This appeal concerns a dispute between the owner of a manufactured home 

community, Wild Meadows MHC, LLC, (the “Landowner”), and an association 

representing some of the homeowners in that community, Wild Meadows 

Homeowners Association, Inc. (the “HOA”). Landowner sought a rent increase 

above inflation under the Rent Justification Act (the “Act”).2 The HOA objected to 

that increase and filed a petition for arbitration as permitted by statute.3

Several discovery disputes necessitated the guidance of the Delaware 

Supreme Court.4 After that guidance was provided, the parties proceeded to 

arbitration. The arbitrator (the “Arbitrator”) found Landowner successfully 

complied with the statutory requirements to seek an above-inflation rent increase by 

establishing a prima facie case that its expenditure directly related to operating, 

maintaining, or improving the community.

5

 The Arbitrator concluded the HOA 

could not rebut that case, in part because the Arbitrator declined to compel the 

previous owner of the community to provide its financial records.6 The HOA 

2

25 Del. C. § 7050 et seq.

3

25 Del. C. § 7053(f).

4 See Wild Meadows MHC, LLC v. Weidman, 250 A.3d 751 (Del. 2021).

5 The Arbitration Decision (the “Decision”) at 18-19, D.I. 16 at A-079-80 (Jan. 31, 2023).

6

Id. at 21.
3

appealed to this Court, arguing the Arbitrator committed legal error by failing to 

permit the compulsion of the financial records of the prior owner. Alternatively, the 

HOA proffered that Landowner could not establish its prima facie case without the 

financial records of the prior owner. As the records sought by the HOA do not factor 

into the statutory analysis of Landowner’s prima facie case, the Decision is 

AFFIRMED.

II. Factual and Procedural Background

Landowner purchased the Wild Meadows manufactured home community on 

October 27, 2017.7 Since that purchase, Landowner and the HOA have been 

embroiled in several disputes regarding rent increases.8 This appeal concerns the 

rent increase Landowner sought for 2019.9 In compliance with the Act, Landowner 

held a meeting with the affected homeowners explaining the basis for the rent 

increase.10 Landowner asserted it spent $56,412.76 (the “Expenditure”) on expenses 

directly related to operating, maintaining, or improving the community. Landowner 

7 Appellant’s Opening Br. at 7, D.I. 16 (Jan. 31, 2023).

8 See Wild Meadows MHC, LLC v. Wild Meadows Homeowners Ass’n, Inc., 2024 WL 1956135, 

at *1 (Del. Super. May 2, 2024) (“Wild Meadows 2020”) (the Court will refer to this case as Wild 

Meadows 2020, as that was the nomenclature used by the parties at oral argument. Wild Meadows 

2020 dealt with a disputed rent increase for the year 2020); see also Wild Meadows MHC, LLC v. 

Wild Meadows Homeowners Ass’n, Inc., 2024 WL 1434288, at *1 (Del. Super. Apr. 2, 2024).

9 Appellant’s Opening Br. at 7, D.I. 16.

10 Id.
4

further noted it sought to increase rent under the “market rent” factor outlined by 

statute.11 The HOA objected to the rent increase, and petitioned for arbitration as 

outlined by 25 Del. C. § 7053(c).12

The ensuing discovery process involved substantial litigation, culminating in 

a decision from the Delaware Supreme Court compelling Landowner to turn over its 

financial records for review by the HOA.13 The original arbitrator initially assigned 

to this matter withdrew. A new arbitrator (the previously defined “Arbitrator”)

oversaw discovery under the terms mandated by Weidman.

14

 

Critically, the Arbitrator denied the HOA’s request to compel discovery of the 

previous owner’s financial statements.15 The Arbitrator determined no language 

within the Act permitted the Arbitrator, or either of the parties, to compel an 

unrelated third party to provide discovery.16 Further, the Arbitrator found any such 

financial records to be irrelevant to the finances of the current community owner.17 

11 25 Del. C. § 7052(c)(7) (this portion of the code has since been revised; all citations are to the 

code as written before July 1, 2022).

12 Appellee’s Answering Br. at 10, D.I. 19 (Feb. 28, 2023).

13 For a more complete recitation of the discovery dispute, see Weidman, 250 A.3d 751 (Del. 2021).

14 Appellant’s Reply Br. at 11, D.I. 22 (Mar. 17, 2023).

15 Decision at 21, D.I. 16.

16 Id.

17 Id.
5

As the current community owner’s finances constitute the only finances with any 

bearing on whether the current community owner’s costs increased, the Arbitrator 

held the finances of a previous owner were not relevant to his analysis.18

Following the arbitration proceedings, the Arbitrator found Landowner met 

its statutory burden to seek an above-inflation rent increase.19 Neither party disputed 

Landowner’s compliance with 25 Del. C. § 7052(a)(1), requiring no health or safety 

violations persisting for more than fifteen days in the twelve months preceding the 

rent increase. The parties also did not dispute Landowner expended $56,412.76 –

the Expenditure – to purchase signage and replacement furniture.20

The HOA disputed the necessity and relatedness of the Expenditure, but the 

Arbitrator concluded “on balance, these funds were expended in direct relation to 

operation, maintenance, and improvement of the community.”21 The Arbitrator 

dismissed the HOA’s argument that the Expenditure could not be directly related to 

the community because it provided a tangential benefit to Landowner’s marketing 

18 Id.

19 Id. at 26.

20 Id. at 20.

21 Id.
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interests.22 The Arbitrator determined the Act contained no provision requiring an 

increase in costs “must be unrelated to any other consequence.”23

Having found the Expenditure satisfied the statutory “directly related” 

requirement, the Arbitrator next turned to the HOA’s rebuttal case.24 The Arbitrator 

acknowledged the HOA could not present a meaningful rebuttal because it lacked 

access to prior financial records to compare against Landowner’s costs.25 Based on 

the Arbitrator’s earlier rulings regarding discovery, he recognized the lack of prior 

financial records placed the HOA “in a difficult, if not impossible, evidentiary 

position.”26 Nevertheless, the Arbitrator determined he could not punish Landowner 

for the HOA’s inability to access evidence to rebut the prima facie case.27 The 

Arbitrator concluded Landowner successfully carried its burden of establishing a 

prima facie case, and the HOA failed to rebut that case successfully.

28

 

22 Id.

23 Id.

24 Id. at 20-21.

25 Id. at 21.

26 Id.

27 Id. at 22.

28 Id.
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The Arbitrator then considered whether Landowner met its burden to show 

the “desired rent increase is consistent with the ‘market rent,’ as that term is defined 

by statute.”29 The Arbitrator noted the HOA provided no expert testimony disputing 

Landowner’s contentions regarding market rent.30 Finding Landowner successfully 

met its burden, the Arbitrator granted Landowner’s desired rent increase.31

The HOA appealed to this Court, arguing the Arbitrator committed legal error 

by: (1) holding the financial information of the previous owner contained no relevant 

information to the instant case; (2) misconstruing the term “community owner;” (3) 

misapplying the concept of piercing the corporate veil; and (4) finding sufficient 

evidence in the record to determine the rent increase qualified as directly related as 

defined by statute.32 During the pendency of this appeal, this Court issued an opinion 

concerning an appeal related to a rent increase affecting another manufactured 

housing community, Shady Park Homeowner’s Association, Inc. v. Shady Park 

MHC, LLC.

33

 Counsel for both parties here participated in Shady Park, and the 

affected homeowners filed an appeal of that decision to the Delaware Supreme 

29 Id. at 23.

30 Id. at 25.

31 Id.

32 See generally Appellant’s Opening Br. at 1-2, D.I. 16

33 2023 WL 2366632, at *1 (Mar. 3, 2023).
8

Court. Believing Shady Park to be dispositive, Landowner requested a stay of this 

case pending the Delaware Supreme Court’s decision.34 Following an office

conference, this Court granted that request.35

The Delaware Supreme Court affirmed this Court’s ruling in Shady Park.

36

Following that affirmation, this Court requested supplemental briefing from the 

parties regarding what issues in this case, if any, Shady Park controlled.37 After the 

parties filed their supplemental briefs, but before oral argument occurred, this Court 

issued a decision in another case regarding a dispute between the parties over a 

proposed rent increase in the same manufactured home community for 2020.

38

 

On June 11, 2024, the Court held oral argument in this matter. At oral 

argument, the HOA conceded the Court’s decision in Wild Meadows 2020 is 

dispositive and moots the instant appeal.39 The HOA noted it does not agree with 

the Court’s decision in that case.40 Given the procedural posture of Wild Meadows 

34 Letter to the Court Requesting Stay, D.I. 26 (Apr. 4, 2023).

35 D.I. 34 (Jun. 22, 2023).

36 See Shady Park Homeowners’ Ass’n, Inc. v. Shady Park MHC, LLC, 308 A.3d 168 (Del. 2023).

37 D.I. 37 (Jan. 8, 2024).

38 See Wild Meadows 2020, 2024 WL 1956135, at *1 (Del. Super. May 2, 2024).

39 Tr. of Oral Arg. At 4-6, D.I. 48 (Jul. 10, 2024).

40 Id. at 4-5.
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2020, however, the HOA has not yet been able to file an appeal in that case despite 

its disagreement with the holding.41 Thus, the HOA requested this Court not address 

the discovery matters in this case; to what degree Shady Park controls; or 

Landowner’s contentions regarding its alleged losses and how those losses should 

factor into an analysis of a proposed rent increase.42 Instead, the HOA asked this 

Court to rule on the “appropriate ... mechanism” regarding the analysis of the HOA’s 

rebuttal argument to Landowner’s prima facie case.43 Landowner agreed the HOA 

effectively conceded the instant appeal, but requested a more thorough examination 

of the issues presented in this case.

44

III. Standard of Review

A review of an arbitrator’s decision requires this Court to determine (1) 

whether the record created in arbitration is sufficient justification for the arbitrator’s 

decision, and (2) whether the arbitrator’s decisions are free from legal error.45 

“[S]ubstantial evidence review is the appropriate standard of review for the 

41 Id. at 7.

42 Id. at 19-20.

43 Id. at 20-21.

44 Id. at 18.

45 Ridgewood Manor MHC, LLC v. Ridgewood Manor HOA, 2023 WL 4363899, at *3 (Del. 

Super. July 3, 2023) (citing 25 Del. C. § 7054).
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arbitrator’s factual findings.”46 “Substantial evidence means evidence that is 

relevant and that a reasonable mind might accept as adequate to support a 

conclusion.”47 “[I]ssues of statutory construction and interpretation are reviewed de 

novo.”48

IV. Discussion

The Court agrees with the HOA’s concession that the analytical framework 

outlined in Wild Meadows 2020, as applied to the instant case, renders its appeal 

moot. Accordingly, the Court will limit this opinion to an examination of that 

framework, and its application to the facts presented by the HOA at oral argument. 

The Court begins that examination with a review of the trilogy of cases most 

illustrative of that framework – Sandhill Acres, Shady Park, and Wild Meadows 

2020.

A. Sandhill Acres precludes imposing a requirement on Landowner 

not contained within the statute

To establish a prima facie case satisfying the directly related standard, “a 

community owner need only show that there are no relevant health and safety 

46 Sandhill Acres MHC, LC v. Sandhill Acres Home Owners Ass’n, 210 A.3d 725, 731, n. 37 (Del. 

2019).

47 Shady Park, 2023 WL 2366643, at *2 (Del. Super. Mar. 3, 2023).

48 Ridgewood Manor, 2023 WL 4363899, at *3 (Del. Super. July 3, 2023) (citing Bon Ayre Land, 

LLC v. Bon Ayre Cmty. Ass’n, 149 A.3d 227, 233 (Del. 2016)).
11

violations and that the proposed rent increase is directly related to operating, 

maintaining, or improving the manufactured home community.”

49

 In Sandhill Acres, 

the community owner relied on expenses related to a new water filtration system to 

justify the rent increase.50 An arbitrator found no relevant health or safety violations 

existed; the community owner’s referenced expenses satisfied the directly related 

requirement; and the community owner justified the rent increase under the market 

rent factor. 51 Accordingly, the arbitrator granted the proposed rent increase.52 This 

Court reversed, finding the community owner needed to show “both that its overall 

costs are higher than they previously were and that its original expected return had 

declined.”53

The Delaware Supreme Court reversed this Court, holding that this Court 

imposed “a requirement on the community owner that the statute does not contain.”54 

The Act only requires “the community owner to offer evidence that in making some 

capital improvement, the community owner has incurred costs that are likely to 

49 Sandhill Acres, 210 A.3d at 728 (internal quotations omitted) (quoting 25 Del. C. § 7042(a), 

(b)).

50 Id. at 727.

51 Id.

52 Id.

53 Id.

54 Id. at 729.
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reduce its expected return.”55 That standard only imposes a “modest” requirement 

on the community owner.56 In summary, the community owner must show: (1) “that 

there are no relevant health and safety violations;” (2) the community owner incurred 

an expense; and (3) that expense directly related to operating, maintaining, or 

improving the community.57 If the community owner makes that requisite showing, 

it has successfully established its prima facie case.58

Sandhill Acres also addressed the homeowners’ opportunity to rebut a prima 

facie case. A homeowner may rebut a prima facie case by “offering evidence of her 

own that the expenditure did not in fact reflect any increase in costs – for example 

because the expenditure was offset by reduced expenses in other areas.”

59

 The 

homeowners in Sandhill Acres presented no such evidence, and so were unable to 

rebut the community owner’s prima facie case.60

55 Id.

56 Id.

57 Id.

58 Id.

59 Id.

60 Id.
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B. Shady Park clarified the showing a community owner must make 

regarding its expected return

As noted above, this Court issued a stay in the instant case pending the 

outcome of the homeowners’ appeal in Shady Park. Shady Park largely focused on 

the “directly related” requirement contained within the Act. The community owner 

expended funds to construct “an on-site office to house community management 

personnel.”61 An arbitrator found that expenditure satisfied the requirements of the 

Act, and granted the community owner’s requested rent increase.62 The homeowners 

appealed to this Court, arguing about both the current and previous owner’s expected 

returns and what constituted “a just, reasonable[,] and fair return.”63

This Court found an analysis of the previous owner’s returns and the current 

owner’s expected rate of return to be “a confusion of the relevant issues and law.”64 

Citing to Sandhill Acres, this Court reiterated “it suffices for the community owner 

to offer evidence that[,] in making some capital improvement, the community owner 

has incurred costs that are likely to reduce its expected return.”65 Applying that 

61 Shady Park, 2023 WL 2366643, at *3 (Del. Super. Mar. 3, 2023).

62 Id.

63 Id. at *4.

64 Id. at *5.

65 Id. (internal quotations omitted) (quoting Sandhill Acres, 210 A.3d at 729).
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standard, this Court reasoned “the expenditure likely reduced the expected return of 

the Owner due to the large amount of money allocated to the new office building.”66 

“When a landowner invests in improving the community, it can reap the benefits of 

increasing the rent above inflation rates.”67 The Delaware Supreme Court affirmed 

“on the basis of and for the reasons stated” in this Court’s opinion.68

C. Wild Meadows 2020 explains what evidence homeowners must

present to show offsetting expenses

In Wild Meadows 2020, this Court again confronted the issue of what factual 

showing a community owner must make to satisfy the directly related requirement, 

and what evidence a homeowner must present to rebut a prima facie case. The 

homeowners in Wild Meadows 2020 did not dispute the community owner expended 

funds on improvements directly related to operating, maintaining, or improving the 

community.69 The homeowners contended, however, that as the community owner’s 

total costs had decreased, its expenditure could not reflect a reduction in its overall 

return.70

66 Id.

67 Id. (citing Bon Ayre Land, 149 A.3d at 234).

68 Shady Park Homeowners’ Ass’n, Inc. v. Shady Park MHC, LLC, 308 A.3d 168 (Del. 2023).

69 Wild Meadows 2020, 2024 WL 1956135, at *2 (Del. Super. May 2, 2024).

70 Id.
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This Court, relying on the Delaware Supreme Court’s decision in Sandhill 

Acres, rejected that argument.71 No language in the Act, or in any of the Delaware 

Supreme Court’s decisions interpreting the Act, requires a community owner to 

demonstrate that its total costs have increased.72 Rather, a community owner must 

show “that, in making some capital improvement, it incurred costs that are likely to 

reduce its expected return.”73 

The Act requires a community owner seeking to increase rent above inflation 

to demonstrate its expected return has been lowered by an expense directly related 

to operating, maintaining, or improving the community.74 Homeowners may rebut 

that showing by providing evidence that the expense did not contribute to an increase 

in costs because it offset other expenses.

75

 Homeowners seeking to prove the 

existence of offsetting expenses must show evidence that the expense itself reduced 

costs – by lowering ongoing maintenance costs, for example.76 Showing only that 

the community owner’s overall costs decreased, however, does not suffice.77 

71 Id. at *4.

72 Id.

73 Id. (citing Sandhill Acres, 210 A.3d at 729).

74 25 Del. C. § 7052(b)(2).

75 Sandhill Acres, 210 A.3d at 729.

76 Wild Meadows 2020, 2024 WL 1956135, at *4 (Del. Super. May 2, 2024).

77 Id.
16

To hold otherwise would impose a requirement on the community owner not 

contained within the Act – a requirement to show its total costs have increased –

resulting in a misinterpretation of the Act.78 The Act requires a community owner 

to invest in the community before seeking a rent increase, thus preventing 

indiscriminate rent increases untethered to the costs of running the community.79 

The Act does not require the community owner to operate at a loss, increase its total 

costs, or otherwise make any showing beyond the requirements explicitly outlined 

within the language of the Act.80

D. Applying the requisite analytical framework to this appeal, the

HOA cannot rebut Landowner’s prima facie case successfully

The parties do not dispute that Landowner has complied with its requirements 

under the Act to establish a prima facie case.81 The Arbitrator found the HOA failed 

to establish a successful rebuttal case, in large part because the Arbitrator’s decisions 

regarding discovery made it impossible for the HOA to produce the evidence it 

considered relevant to its rebuttal.82 The HOA initially asked this Court to reverse 

78 Sandhill Acres, 210 A.3d at 729 (“[W]e hold that the Superior Court misinterpreted the Act by 

imposing a requirement on the community owner that the statute does not contain.”).

79 25 Del. C. § 7052(b)(2).

80 Wild Meadows 2020, 2024 WL 1956135, at *5 (Del. Super. May 2, 2024).

81 Tr. of Oral Arg. at 19, D.I. 48 (“Was there an expense, yes there was; did the HOA concede that 

that met the prima facie case, absolutely. No question about that.”).

82 Decision at 20-22, D.I. 16.
17

the Arbitrator’s findings regarding discovery, and remand the case to allow that 

discovery to occur.83

Given the HOA’s concessions at oral argument, however, the Court need not 

address the discovery issues raised by the HOA. There are no offsetting expenses 

present in this case.84 The HOA intended to rebut the prima facie case by comparing 

Landowner’s expected return against the expected return of the previous owner.85 

As that comparison does not factor into the analysis of the directly related 

requirement, and therefore cannot rebut the prima facie case, the HOA’s access to 

that evidence would not change the Act’s required analysis. Absent a showing that 

the Expenditure did not contribute to an increase in Landowner’s costs, the HOA 

cannot successfully rebut the prima facie case. 

V. Conclusion

The HOA conceded that the appeal of this matter is controlled by Wild 

Meadows 2020, which found that a prior owner’s financial records could not be used 

to establish the existence of offsetting expenses. Accordingly, no basis remains for 

the HOA to appeal the Arbitrator’s Decision. The Arbitrator’s Decision is 

83 Opening Br. at 1-3, D.I. 16.

84 Tr. of Oral Arg. at 5, D.I. 48.

85 Id.
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sufficiently justified by the record and free from legal error. The Decision is 

AFFIRMED.

IT IS SO ORDERED.