Court Opinion

ID: 4706046
Source: CourtListenerOpinion
Date Created: 2021-07-23 15:05:13.313054+00
Date Added: 2024-06-11T08:06:34.308477
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

JOHN CAMPANELLI and MARY                  )
CAMPANELLI,                               )
                                          )
                      Plaintiffs,         )
                                          )
              v.                          )   C.A. No. 2018-0391-JRS
                                          )
THE COFFEE RUN CONDOMINIUM                )
COUNCIL, an unincorporated association,   )
and THE COFFEE RUN                        )
CONDOMINIUM COUNCIL INC.,                 )
a Delaware corporation,                   )
                                          )
                      Defendants.         )

                       MEMORANDUM OPINION

                      Date Submitted: April 29, 2021
                       Date Decided: July 23, 2021

Nicholas G. Kondraschow, Esquire and William J. Rhodunda, Jr., Esquire of
Rhodunda, Williams & Kondraschow, Wilmington, Delaware, Attorneys for
Plaintiffs John Campanelli and Mary Campanelli.

Thomas C. Marconi, Esquire of Losco & Marconi, P.A., Wilmington, Delaware,
Attorney for Defendants The Coffee Run Condominium Council and The Coffee
Run Condominium Council Inc.

SLIGHTS, Vice Chancellor
      George Herbert Walker Bush was President of the United States when

Plaintiffs, John and Mary Campanelli (together, “Plaintiffs” or the “Campanellis”),

purchased the right to construct a building (“Building A”) in the Coffee Run

Condominium complex (the “Condominium”) in New Castle County, Delaware.

Building A has yet to be constructed. The Campanellis would like to build it, but

Defendants, The Coffee Run Condominium Council and The Coffee Run

Condominium Council, Inc. (together, “Defendants” or the “Council”), do not

approve of the proposed plans under which construction would proceed.

      The Council’s authority to govern the Condominium flows from a code of

regulations (the “Code of Regulations”) and a declaration (the “Declaration,” and

together with the Code of Regulations, the “Governing Documents”). After decades

of inactivity, in or around 2015, the Campanellis submitted several designs and

proposals for the construction of Building A to the Council. The Council rejected

all of the submissions for the stated reason that none complied with the

Condominium’s declaration plan (the “Declaration Plan”).           Soon after, as if

awakened from a decades-long slumber by the Campanellis’ sudden burst of activity,

the Council notified the Campanellis that they would be charged their purported

share of the Condominium’s common element expenses going forward and for the

year prior to the notice. The Campanellis filed this action shortly thereafter.

                                          1
       Following limited discovery, the parties have cross-moved for summary

judgment on four issues: (1) whether the Campanellis are required to pay

condominium fees for units yet to be built; (2) whether the Council’s rejection of the

Campanellis’ current building proposal is valid; (3) whether Building A, once

constructed, should be subject to separate accounting and billing; and (4) whether

the Campanellis’ may recover their attorneys’ fees as a result of the Council’s

conduct during this litigation.1 After careful review of the record, I have determined

that: the Campanellis do not owe condominium fees for unbuilt units; the Council’s

rejection of the Campanellis’ building proposal is invalid; and the Campanellis are

entitled to separate accounting and billing, as requested, for Building A’s

“maintenance with the new building owners being responsible for all maintenance,

repairs and upkeep of the new building and the existing unit owners being required

for all maintenance, repairs and upkeep of the existing buildings.” The Campanellis,

however, are not entitled to reimbursement of their attorneys’ fees. My reasoning

follows.

1
  D.I. 41 (Defs.’ Opening Br. in Supp. of Mot. for Partial Summ. J.) (“Defs.’ Opening Br.”)
at 6. I note that Defendants’ motion is for partial summary judgment because, in the event
the Court determines the Campanellis must pay damages or fees to Defendants, further
proceedings may be necessary to determine the actual amount owed.

                                            2
                                    I. BACKGROUND

         The facts are drawn from the documentary record and affidavits presented by

the parties for purposes of summary judgment. As explained below, there are no

genuine issues of material fact.

      A. The Parties

         Plaintiffs, John and Mary Campanelli, are residents of Delaware and owners

of the right to construct Building A within the Condominium.2            Defendant,

The Coffee Run Condominium Council, is an unincorporated association with its

principal place of business in Delaware.3 Defendant, The Coffee Run Condominium

Council Inc., is a Delaware corporation. 4

      B. Coffee Run Condominium Breaks Ground

         A record land development plan (the “Record Plan” and, together with the

Declaration Plan, the “Condominium Plan”) for Coffee Run, approved in 1972,

contemplated the contemporaneous construction of five condominium buildings

(Buildings A–E), Building F/a model unit (“Unit F-1-A”) and a community center

with pool.5 All buildings were constructed in 1976 except for Building A, which

2
    D.I. 1 (Verified Compl. Seeking Decl. J. and Inj.) (“Compl.”) ¶ 1.
3
    Compl. ¶ 2.
4
    Compl. ¶ 3.
5
    D.I. 1, Ex. A (Record Plan dated May 30, 1972).

                                               3
was delayed due to ongoing sewer work.6 The Condominium is governed by the

Council and was constructed according to the Declaration Plan, recorded with the

New Castle County Recorder of Deeds on or about September 21, 1973.7

           The Campanellis purchased the rights to construct Building A in 1990, 8 at

which time there were “no common expenses due and owing” on the building.9

Their purchase decision was informed, in part, by the Council’s representation on

November 9, 1989, that the Council would “commence condominium fees and sewer

charges for [Building A’s] 45 [unconstructed] Units at such time that services from

the present Coffee Run facility are utilized by Building A to any degree.”10 The

Council also informed the Campanellis that the construction of Building A must

comply with the specifications in the Condominium Plan.11

6
    D.I. 1, Ex. A; D.I. 42, Ex. C.
7
    D.I. 42, Ex. C (Declaration Plan dated September 21, 1973).
8
    D.I. 42, Ex. A (The Deed conveying Building A to the Campanellis).
9
    D.I. 42, Ex. G (The Rice Letter, dated Nov. 9, 1989).
10
     Id.
11
  Id. (“It is our intention to assure that the recorded plans and specifications on file for the
construction of Building A are complied with completely.”).

                                               4
      C. The Governing Documents

           The Condominium is governed by the Declaration and the Code of

Regulations.12 The Declaration, in turn, is governed by the Delaware Unit Property

Act (the “DUPA”), 13 and its original form required that the Condominium be used

only for residential purposes. 14 On June 15, 1978, the Declaration was amended to

permit Unit F-1-A to be used as a commercial office and to allocate at least twelve

parking spaces to Unit F-1-A. 15 On or around December 30, 1991, after the

Campanellis had purchased the right to construct Building A, the Declaration was

amended again to clarify that the owners of all 226 units in the Condominium,

including the 45 units to be built within Building A, would pay a condominium fee

proportionate to their pro rata share of expenses, including maintenance for HVAC

systems, the building (interior and exterior), and the parking lots (the “Common

Elements,” and fees to maintain the Common Elements, “Condominium Fees”).16

12
     D.I. 42, Exs. K, X.
13
     D.I. 1, Ex. B.
14
     D.I. 1, Exs. A–B.
15
     Id.
16
  D.I. 42, Ex. J (stating that Common Elements ownership is apportioned at 1/226 for each
unit owner). Plaintiffs did not participate in the vote for the amendment. See id.

                                           5
The Declaration was amended yet again on December 2, 1994, to provide that

Unit F-1-A was excepted from paying the costs of heating and air conditioning. 17

          A 2009 amendment to the Declaration apportioned ownership of the Common

Elements to the existing unit owners, giving each a 1/181 share, meaning the 45 units

to be constructed in Building A were excluded.18 This was reaffirmed in the latest

and operative Declaration, which was amended on May 24, 2013.19 Though the

Governing Documents afford each unit owner a right to attend meetings and vote on

matters affecting the Condominium, the Campanellis were neither informed of nor

participated in any of the votes on amendments to the Governing Documents. 20

          The Condominium’s Code of Regulations has also been amended numerous

times.21       While the operative Code of Regulations, dated April 13, 2009,

acknowledges that Coffee Run contains 226 units, it does not count the Campanellis’

17
     Compl. ¶ 25; D.I. 1, Ex. F.
18
     D.I. 1, Ex. H § 7.
19
     D.I. 1, Ex. I § 7.
20
   D.I. 42, Campanelli Affs. ¶ 9. Mr. and Mrs. Campanelli submitted mirror-image
affidavits, so they are cited together as “Campanelli Affs.”
21
  D.I. 42, Exs. Q (Original Code), R (Amended Code dated Sept. 21, 1975), S (Amended
Code dated June 8, 1989), U (Amended Code dated Jan. 27, 1992), X (Amended Code
dated Apr. 13, 2009) (stating the Condominium was originally to consist of 226 units but
currently has only 181 existing units that each receive one vote and are allocated one share
of common element expenses).

                                             6
to-be-built units among the existing units when addressing the votes entitled to be

cast or allocating the Condominium Fees. 22

      D. The Council Denies the Campanellis’ Proposals to Construct Building A
         and Then Charges the Campanellis Condominium Fees for Unbuilt Units

         The sewer work that had been preventing the Campanellis from constructing

Building A was finally completed in September 2015.23 While the record does not

reveal when the first offer was transmitted, it appears that soon after the sewer work

was completed, the Campanellis began to field several offers from builders who

wished to construct Building A.24 As the offers were received, the Campanellis

would submit the “designs and proposals” from the builders to the Council for

approval. 25 The Council rejected each submission.26 According to the Council, none

of the submitted designs and proposals complied with the Condominium Plan’s

specifications. 27

         On May 1, 2018, 28 years after the Campanellis purchased the right to

construct Building A and despite previously representing to the Campanellis that it

22
     D.I. 42, Ex. X.
23
     D.I. 42, Ex. GG (Letter from New Castle County).
24
     D.I. 42, Campanelli Affs. ¶ 11.
25
     D.I. 42, Campanelli Affs. ¶ 12.
26
     D.I. 42, Campanelli Affs. ¶¶ 13, 14, 19; D.I. 42, Ex. AA.
27
     D.I. 42, Ex. Z.

                                               7
intended to “commence condominium fees and sewer charges for the 45 Units at

such time that services from the present Coffee Run facility are utilized by

Building A to any degree,” the Council notified the Campanellis that they would be

charged Condominium Fees of $110 a month “per Unit” for the 45 unbuilt units in

Building A, totaling $4,950 per month.28 The Council also back-charged the

Campanellis these fees for the year prior (July 1, 2017 to May 1, 2018), for an

amount totaling $54,450.00.29

      E. Procedural History

          On May 31, 2018, the Campanellis filed a Complaint against the Council

seeking declaratory judgments and an injunction.30 After completion of motion

practice on the Campanellis’ request for preliminary injunctive relief, 31 the Council

filed its Answer, Affirmative Defenses and Counterclaims to Plaintiffs’ Verified

Complaint.32 The parties subsequently entered into several stipulations regarding

28
     D.I. 42, Exs. G, H.
29
     D.I. 1, Ex. S.
30
     D.I. 1.
31
   D.I. 2–3, 10–11 (briefing on Plaintiffs’ motion to expedite and for a preliminary
injunction); D.I. 9, 13–14 (briefing on motion to dismiss); see also D.I. 16–18
(Order denying Defendants’ motion to dismiss).
32
     D.I. 19.

                                          8
mediation and then case scheduling.33 Upon completion of discovery, the parties

cross-moved for summary judgment. 34 Oral argument was held on April 29, 2021,

and the case was submitted for decision that day.35

                                    II. ANALYSIS

         Under Chancery Rule 56, summary judgment will be granted if the record

bears out “no genuine issue as to any material fact and that the moving party is

entitled to a judgment as a matter of law.”36 Summary judgment is especially

33
     D.I. 22–27, 31–37.
34
  D.I. 39; D.I. 42 (Pls.’ Opening Br. in Supp. of Mot. for Summ. J.) (“Pls.’ Opening Br.”);
D.I. 44 (Pls.’ Answering Br. in Opp’n to Defs.’ Opening Br. in Supp. of Defs.’ Mot. for
Partial Summ. J.) (“Pls.’ Answering Br.”); D.I. 48 (Pls.’ Reply Br. in Supp. of Mot. for
Summ. J.) (“Pls.’ Reply Br.”); D.I. 41 (Defs.’ Opening Br.); D.I. 43 (Defs.’ Answering Br.
in Opp’n to Pls.’ Mot. for Summ. J.) (“Defs.’ Answering Br.”); D.I. 47 (Defs.’ Reply Br.
in Supp. of Mot. for Partial Summ. J.) (“Defs.’ Reply Br.”).
35
     D.I. 52.
36
   Ct. Ch. R. 56(c); see GMG Cap. Invs., LLC v. Athenian Venture P’rs I, L.P., 36 A.3d
776, 783 (Del. 2012) (discussing the standard of review and shifting burdens implicated by
motions for summary judgment). Here, the parties have brought cross-motions for
summary judgement. This normally would implicate Chancery Rule 56(h), which provides
that the court “shall deem the [cross] motions to be the equivalent of a stipulation for
decision on the merits based on the record submitted with the motions” when the parties
have “not presented argument to the Court that there is an issue of fact material to the
disposition of either motion.” Ct. Ch. R. 56(h). The parties argued on brief that there were
no material issues of fact, but walked back that acknowledgement during oral argument
with respect to certain issues relating to back-charged Condominium Fees and the extent
to which the Campanellis may build facilities for parking connected to Building A. Pls.’
Opening Br. at 2, 17; Defs.’ Opening Br. at 6, 17 (“There are no material facts in dispute
in this case.”); Defs.’ Answering Br. at 35–46; Oral. Arg. Tr. 39:12–15 (Defendants stating
that more facts are needed to determine whether Defendants’ rejection of Plaintiffs’
building proposal was arbitrary and capricious). While I ultimately conclude that there are
                                             9
appropriate when the controversy is grounded in the construction of an unambiguous

contract.37 “[A] contract is unambiguous when the agreement’s ordinary meaning

leaves no room for uncertainty, and the plain, common, and ordinary meaning of the

words . . . lends itself to only one reasonable interpretation.”38

      A. The Campanellis Do Not Owe Back-Condominium Fees

         The Campanellis seek a declaratory judgment that the Council may not charge

them Condominium Fees because they have not constructed units and so are not unit

owners against whom fees may be assessed under the DUPA or the Delaware

Uniform Common Interest Ownership Act (the “DUCIOA”). Even if they are unit

owners, the Campanellis say, the operative Governing Documents do not authorize

the Council to assess Condominium Fees for unbuilt units. The Council disagrees

on all fronts.

         While the parties have not cited a Delaware case interpreting whether the term

“unit” under the DUPA or the DUCIOA encompasses unconstructed units, the

DUPA undisputedly contemplates that a condominium’s Governing Documents can

no genuine issues of material fact with respect to these issues, because the parties suggested
otherwise at oral argument, I have applied Chancery Rule 56(c) as the standard of review.
37
     United Rentals Inc. v. Ram Hldgs., Inc., 937 A.2d 810, 830 (Del. Ch. 2007).
38
   Pearl City Elevator v. Gieseke, 2021 WL 1099230, at *9 (Del. Ch. Mar. 23, 2021)
(internal quotations omitted) (emphasis removed).

                                             10
exempt the owners of unbuilt units from condominium fees. 39 Thus, it is appropriate

to look first to the Governing Documents, which are treated as a contract under

Delaware law, for direction regarding the Campanellis’ obligations as owners of

Building A.40 “The principles governing contract interpretation are well settled.

Contracts must be construed as a whole, to give effect to the intentions of the

parties.”41 And, “where the language of a provision in a condominium's enabling

declaration or code of regulations is clear and unambiguous, this court will afford

that language its ordinary meaning.”42

         The original Code of Regulations, dated September 24, 1973, noted that there

were 226 units in the condominium project; Building A accounted for 45 of those

39
   25 Del. C. §§ 2205 (“The percentage of undivided interest in the common elements
assigned to each unit shall be set forth in the declaration . . . .”), 2216 (stating that common
expenses shall be charged to unit owners according to their percentage ownership in the
common elements). The Council admits, and its cited cases interpreting similar statutes in
other jurisdictions recognize, that a condominium’s governing documents can modify the
statutory definition of “unit” for purposes of charging expenses for the common elements.
Oral Arg. Tr. 20:13–22:7; see also, e.g., Aluminum Indus. Corp. v. Camelot Trails Condo.
Corp., 535 N.W.2d 74, 77–81 (Wis. App. 1995) (recognizing that a condominium’s
governing documents can modify the definition of unit for purposes of charging common
element expenses).
40
  25 Del. C. § 2219 (listing the contents that must be included in a declaration which details
restrictions and apportionment of units and common elements); Council of Dorset Condo.
Apartments v. Gordon, 787 A.2d 723, 727 (Del. Ch. 2001) (treating a condominium’s
governing documents as contracts).
41
   Northwestern Nat’l Ins. Co. v. Esmark, Inc., 672 A.2d 41, 43 (Del. 1996) (citing
E.I. duPont de Nemours and Co., Inc. v. Shell Oil. Co., 498 A.2d 1108, 1113 (Del. 1985)).
42
     Council of Dorset, 787 A.2d at 727.

                                              11
units.43 The operative Code of Regulations, dated April 13, 2009, excludes the

Campanellis’ units, stating there are “181 existing units and 181 votes entitled to be

cast.” 44 It then ties Condominium Fees to unit ownership, stating “[e]ach Unit

Owner shall be entitled to a 1/181 percentage of ownership in the Common

Elements” expenses. 45 Likewise, the operative Declaration, dated May 24, 2013,

was “signed by the affirmative vote of at least three-fourths (3/4) of the Unit Owners

(i.e., a minimum of 136 Units).”46 Consistent with the Code of Regulations, this

implies the Condominium comprises 181 units, as 136 is three-fourths of 181.

The Declaration further states that each unit owners’ share of the Condominium Fees

is 1/181, not 1/226. 47

43
     D.I. 1, Ex. J (Original Code of Regulations) art. 1.
44
   D.I. 1, Ex. O art. 2, § 1(a). At oral argument, the Council argued for the first time that,
because the Council never sought the Campanellis consent prior to changing their interest
in the Common Elements or obligation to pay Condominium Fees, none of the amendments
to the Condominium documents since the initial Declaration were effective under the
DUPA. Oral Arg. Tr. 22:17–23:24, 25:16–23. Consequently, the Council reasons, the
original Declaration’s contemplation of 226 units stands. Id. Because the Council did not
brief this issue in any of their three briefs submitted on the cross-motions, the argument is
waived. See Emerald P’rs v. Berlin, 726 A.2d 1215, 1224 (Del. 1999) (“Issues not briefed
are deemed waived.”).
45
     D.I. 1, Ex. O art. 2, § 1(a).
46
     D.I. 1, Ex. I § 7.
47
   Id. I note that the parties do not appear to dispute that the units eliminated from the
initial count of 226 units are the units to be constructed in Building A.

                                                12
          The Declaration and Code of Regulations thus unambiguously and uniformly

provide that Condominium Fees are to be allocated evenly among each of the 181

existing unit owners, thereby conferring on the owners of Building A different rights

and obligations than the owners of other units.48 Indeed, consistent with the

Governing Document’s plain language, the Campanellis have never received notice

regarding unit owner meetings or invitations to vote on matters affecting the

Condominium. 49             Because the Governing Documents currently allocate

Condominium Fees only to the 181 constructed units in buildings B, C, D and E, the

Campanellis do not owe Condominium Fees—past, present or future—under the

plain terms of the operative Declaration and Code of Regulations.50 On that point,

the Campanellis’ request for declaratory judgment and an injunction restraining the

Council from charging such fees is granted.

48
  See D.I. 42, Campanelli Affs. ¶ 9; see also D.I. 1, Ex. O art. 2, § 1(a) (stating that existing
units are apportioned a share (1/181) of Common Elements); see also D.I. 1, Ex. I § 7
(same); see also Council of Dorset, 787 A.2d at 727 (explaining when the language of a
condominium agreement is unambiguous, then a standard interpretation of the language
will be applied). I note that the amendments providing for the 1/181 apportionment were
proposed by the Council and duly approved by the owners of existing units. D.I. 1, Exs. E
(Amended Declaration dated Dec. 30, 1991), F (Amended Declaration dated Dec. 2, 1994
H (Amended Declaration dated Apr. 13, 2009), I (Amended Declaration dated May 24,
2013), K (Amended Code dated June 8. 1989), M (Amended Code dated Jan. 27, 1992),
O (Amended Code dated Apr. 13, 2009).
49
     D.I. 42, Campanelli Affs. ¶ 9.
50
     D.I. 1, Exs. I § 7, O art. 2, § 1(a).

                                               13
     B. The Campanellis’ Building Plan and Request for Separate Accounting
        and Billing for Building A Must Be Approved

       The Campanellis seek a declaratory judgment that they may begin

construction of Building A in accordance with the designs and proposals in their

latest submission to the Council (the “Building Plan”). Specifically, the Campanellis

argue: the Declaration’s architectural review provision, which purportedly

authorizes the Council to reject the Campanellis’ Building Plan, is so lacking in

standards or criteria that it is invalid under Delaware law; the Declaration Plan,

which would appear to restrict the Campanellis’ ability to construct a facility for

additional parking, is either invalid under Delaware law and the DUCIOA or subject

to reasonable modification; and the Council’s denial of the Campanellis’ proposal

to arrange for separate accounting and billing for the to-be-constructed units is

arbitrary and capricious. I take up each argument in turn.

          The Building Plan

       The Campanellis argue the lack of fixed standards in the Declaration’s

architectural review provision renders the provision invalid as a matter of law.51

While “an ‘architectural review covenant[]’ is enforceable if it articulates a clear,

51
  See Benner v. Council of Narrows Ass’n of Owners, 2014 WL 7269740, at *1 (Del. Ch.
Dec. 22, 2014), adopted sub nom., (Del. Ch. Mar. 16, 2015) (treating a restrictive covenant
giving an association or committee authority to review and approve plans as an
architectural review provision).

                                            14
precise, and fixed standard the reviewing body must apply[,]”52 it “is unenforceable

under Delaware law [when there is an] absence of any clear and precise standard

governing the review.” 53 “Restrictive covenants that give an architectural review

committee authority to review and approve plans are suspect because of their

tendency to be arbitrary, capricious, and therefore unreasonable.” 54 Thus, “to the

extent that architectural review is ‘based purely on aesthetical considerations,’ that

review is considered arbitrary and capricious and therefore not reasonable.”55

           The Declaration’s architectural review provision is found in Section 17(c),

and provides:

           A Unit Owner must obtain express written approval of the Council
           before making, or permitting to be made, any internal structural
           installation or alteration, or any installations or changes that alter the
           external appearance of the Unit. A Unit Owner desiring to make, or
           permitting to be made, such structural installations, alterations, or
           changes shall first notify the Council in writing. The Unit Owner shall

52
     Id.
53
     Id. at *9.
54
  Point Farm Homeowner’s Ass’n, Inc. v. Evans, 1993 WL 257404, at *3 (Del. Ch.
June 28, 1993).
55
   Id. (quoting Chambers v. Centerville Tract No. 2 Maint. Corp., 1984 WL 19485, at *3
(Del. Ch. May 31, 1984)). The Council asserts (without reference to any authority) that
the requirements for specific standards in architectural review covenants (like Point Farm)
apply to homeowner associations but not to condominium associations. Defs.’ Answering
Br. at 37–38. That is plainly wrong. See Benner, 2014 WL 7269740, at *7 (addressing
architectural review as relates to condominiums); Canal Cokran Homeowners Assoc., Inc.
v. Petrone, 2017 WL 1450168, at *1 n.2, *4 (Del. Ch. Apr. 21, 2017) (same).

                                              15
          furnish the Council with such information and drawings as may be
          requested.56

          By its own terms, Section 17(c) contains no “fixed standards” by which the

Council would evaluate the Campanellis’ Building Plan. 57 Rather, the provision

grants to the Council the unfettered, arbitrary power to approve or deny alterations

to existing structures, or the construction of new structures. “This Court consistently

has held that the absence of a clear, precise, and fixed standard in an architectural

review covenant renders that portion of the deed restriction unenforceable.”58

Section 17(c), therefore, must be stricken, meaning, as it stands, the Council is not

empowered independently to review and reject the Campanellis’ Building Plan.59

          The Council attempts to salvage its rejection of the Building Plan by arguing

that the Declaration Plan (now 48 years old), as opposed to the Declaration, provides

fixed standards that conflict with the Campanellis’ Building Plan. To be sure, the

Declaration states that each building is to be constructed in accord with the

56
     D.I. 1, Ex. I § 17(c).
57
     See Benner, 2014 WL 7269740, at *1.
58
   Id. at *8; see also Seabreak Homeowners Ass’n v. Gresser, 517 A.2d 263, 269 (Del. Ch.
1986) (“[W]here the language used in the restrictive covenant empowering the committee
is overly vague, imprecise, or so unclear as not to lend itself to evenhanded application,
then the grant of authority is normally not enforceable.”).
59
     Benner, 2014 WL 7269740, at *11.

                                            16
Declaration Plan,60 and the deed under which the Campanellis acquired the right to

construct Building A makes clear that Building A is to be constructed as

“particularly shown and described in (1) the Declaration . . . and; (2) the Declaration

Plan.” 61 And “the court must interpret contractual provisions in a way that gives

effect to every term of the instrument, and that, if possible, reconciles all of the

provisions of the instrument when read as a whole.”62 Nevertheless, even assuming

the Declaration Plan modifies or accents the Declaration’s architectural review

provision, it still fails to provide the kind of “clear, precise, and fixed standards”

our law requires. 63

         The Council does not dispute that the dimensions set out in the Declaration

Plan are described as “approximate” dimensions for the “typical” floorplans, and the

60
  See D.I. 1, Ex. O §§ 3–4 (The Plat “sets forth the measurements [and] . . . locations . . .
with respect to . . . (2) all Buildings and each floor thereof; and (3) each Unit of all
Buildings and its horizontal and vertical dimensions. Each Unit is identified on the Plat.”
Each Building is “any building located . . . on the Parcel and forming part of the Property
containing Units . . . as shown by the surveys of the respective floors of said Buildings
included in the Plat.” each unit “shall consist of the identifying number or symbol of such
Unit as shown on the Plat” and “describe[d] . . . by its identifying number or symbol as
shown of the Plat.”).
61
  The letter the Council sent to the Campanellis as they were considering whether to
acquire Building A also states that Building A must be constructed in compliance with the
Condominium Plan. D.I. 42, Ex. G (“It is our intention to assure that the recorded plans
and specifications on file for the construction of Building A are complied with
completely.”).
62
     See Council of Dorset, 787 A.2d at 727.
63
     Benner, 2014 WL 7269740, at *1.

                                               17
Declaration Plan allows that the dimensions may “var[y].” 64               That qualifying

language used in the Declaration Plan suggests that the dimensions and

measurements set forth are not defined and are, therefore, imprecise,65 as alterations

can be made to the structures as built. 66 How submitted plans may “var[y]” from

the Declaration Plan, however, is not explained, nor are there standards provided for

how the Council will determine whether variances are acceptable. Indeed, while

Buildings D and E are depicted “[a]s [b]uilt,” Building A’s dimensions are expressly

identified as “[p]roposed.” 67

         The tentative nature of the Declaration Plan’s design for Building A is further

reinforced by the Governing Documents. As noted, Section 17(c) of the Declaration

provides the Council with broad discretion to approve structural changes, while both

the Declaration and the Code of Regulations allow for separate accounting and

billing “[i]n the event that there are substantial differences in the design or

64
   See Pls.’ Opening Br. at 42; see generally Defs.’ Answering Br. (failing to argue
otherwise).
65
     Approximate, Merriam-Webster, https://www.merriam-webster.com/dictionary/
approximate (last visited July 19, 2021) (“Nearly correct or exact : close in value or amount
but     not      precise.”);      Typical,   Merriam-Webster,          https://www.merriam-
webster.com/dictionary/typical (last visited July 19, 2021) (“Combining or exhibiting the
essential characteristics of a group.”).
66
     See D.I. 42, Ex. 1 § 17(c).
67
     D.I. 42, Ex. C at 1.

                                             18
construction of a given multifamily building which result in operating costs which

are substantially different from the costs of the other multifamily buildings.”68

Those provisions would be superfluous if, in fact, the Declaration Plan (which the

Declaration incorporates) was intended to set forth definite, fixed dimensions with

which Building A must strictly comply. 69            Because any restrictions in the

Declaration Plan must be strictly construed against the Council,70 the Declaration

Plan’s vagueness renders it “clearly subject to reasonable modification.”71

68
   D.I. 42, Ex. K §§ 12(b), 17(c); D.I. 42, Ex. X (April 13, 2009 Code of Regulations)
art. 9, § 2(b) (restating the Declaration’s Section 12(b)).
69
  I note also that, to the extent Defendants would suggest the Declaration and Declaration
Plan conflict (they do not), the Declaration controls. See Murray v. Wang, 1995
WL 130727, at *4 (Del. Ch. Mar. 16, 1995) (“It is clear from the Act [DUPA] that the
Declaration is the principal document to which one must turn in order to determine the
developer’s intention concerning the property being subjected to a condominium
scheme.”).
70
  See Serv. Corp. of Westover Hills v. Guzzetta, 2009 WL 5214876, at *3 (Del. Ch.
Dec. 22, 2009); Alliegro v. Home Owners of Edgewood Hills, Inc., 122 A.2d 910, 912
(Del. Ch. 1956).
71
    Realty Growth Invs. v. Council of Unit Owners, 453 A.2d 450, 456 (Del. 1992).
The Council’s attempt to distinguish Realty Growth because it involved the “tentative
placement” of a “future building” fails, as the Declaration Plan was certified in 1973 at a
time when many of the Condominium’s buildings were yet to be constructed.
Defs.’ Answering Br. at 42. Indeed, the Declaration Plan describes Building A as
“proposed” and uses qualifying language (“approximate,” “typical,” and “vary”) indicating
its “tentative” nature. See D.I. 42, Ex. C.

                                            19
      In submitting their Building Plan, the Campanellis proposed that Building A’s

outward appearance would be identical to Buildings B-E, with 45 (smaller) units.72

The building would be five stories, like the other condominiums, but the first floor

would contain a parking garage to provide 45 parking spaces to the unit owners of

Building A, which would address what the Campanellis describe as a lack of parking

at the Condominium.

      Beyond the Council’s blanket statement that it would not consider any

proposal it deemed out of step with the decades-old Declaration Plan (which, as

explained, is subject to reasonable modification), the only specific direction

provided by the Council to the Campanellis upon rejection of the Building Plan is

that their project must comply with present-day code and must not include the

construction of new parking spaces or a parking garage. 73 While the Council

attempts to manufacture a dispute of fact by arguing the Condominium has sufficient

parking, the present-day New Castle County Code clearly requires 465 parking

72
   See D.I. 42, Ex. Z. Strangely, the Council insists at various points that they have no
definite building plans to evaluate. See Defs.’ Answering Br. at 37; Oral Arg. Tr. 33:10–
15. But the Court has on record the Campanellis’ submissions, and the Council did not
then object to those submissions on grounds of vagueness. See D.I. 42, Ex. Z.
73
   D.I. 42, Ex. Z (Email from Marconi to Rhodunda dated Dec. 1, 2017, stating that “the
new building, parking, and unit configuration must strictly comply with the existing
conditions subject of course to modern building requirements.”); see also id. (Email from
Marconi to Rhodunda dated May 1, 2018, stating that Defendants will not allow alterations
of the physical building as proposed by Plaintiffs).

                                           20
spaces for a housing complex the size of the Condominium, which currently has only

390 parking spaces.74 Thus, the undisputed record reveals that the Council directed

the Campanellis to comply with “modern building requirements”; the current code

requires additional parking to accommodate Building A; and each owner of the to-

be-constructed units in Building A will likely own at least one vehicle. Under these

circumstances, the Campanellis’ parking proposal is a reasonable modification to

the Declaration Plan. The balance of the Building Plan is also reasonable, as it

complies with the current code (the Council’s only other specific directions when

rejecting the Building Plan) and it respects the Condominium’s outward aesthetic

while making only minor changes to the interior.75

74
  NCC UDC § 40.03.522 (requiring “1.5 [parking spaces] per 1 bedroom dwelling unit, 2
[parking spaces] per 2 or 3 bedroom dwelling unit, 2.25 [parking spaces] per 4 bedroom
dwelling unit, 2.5 [parking spaces] per 5+ bedroom dwelling unit; 1 additional guest
parking space per 5 dwelling unit”).
75
   D.I. 42, Ex. Z (Email of the Building Plan from Rhodunda to Marconi dated Apr. 2,
2018). I note that, in Nargiz v. Henlopen Developers, this court held that a Declaration
Plan is not valid under 25 Del. C. § 2220 until “after the building has been substantially
completed . . . .” 351 A.2d 564, 566 (Del. Super. Ct. 1976), rev’d on other grounds,
380 A.2d 1361 (Del. 1997). In reversing, the Supreme Court expressly declined to
adjudicate the propriety of that ruling. See Nargiz, 380 A.2d at 1364. While I have found
the Declaration Plan is subject to reasonable modification, and thus need not rest my
decision on Nargiz’s rationale, the Council does not deny that application of Nargiz’s rule
would invalidate the Declaration Plan, thereby rendering it unenforceable. See Oral Arg.
Tr. 30:17–31:9.

                                            21
             The Separate Accounting and Billing

         Finally, the Campanellis seek a declaration that Building A should be subject

to separate accounting and billing for “maintenance, with the new building owners

being responsible for all maintenance, repairs and upkeep of the new building and

the existing unit owners being required for all maintenance, repairs and upkeep of

the existing buildings.” 76 The Council’s sole basis for rejecting this proposal is that

it does not understand it.77 That position is difficult to square with Section 12(b) of

the Declaration, which expressly provides that, if substantial differences in the

design and construction of a building result in substantially different operating costs,

then separate accounting and billing may be required in order “to achieve equity

among Unit Owners.” 78 That is all the Campanellis have asked for.

         The Council previously demonstrated its willingness “to achieve equity

among Unit Owners” when it implemented separate accounting and billing for Unit

F-1-A because it was not using the same HVAC system as the rest of the buildings.79

76
     Pls.’ Opening Br. at 43–48; D.I. 42, Ex. Z.
77
  Defs.’ Answering Br. at 44 (“Plaintiffs simply insist that they must have it and leave it
for Council to figure out exactly what they mean, what needs to be done to set it up, and
exactly how it will work going forward.”).
78
   D.I. 42, Ex. K § 12(b); see also D.I. 42, Ex. X (April 13, 2009 Code of Regulations)
art. 9, § 2(b) (restating the Declaration’s Section 12(b)).
79
     D.I. 42, Ex. O.

                                              22
Given that the Campanellis’ separate accounting and billing proposal is contractually

permissible, and the construction of Building A will occur decades after

Buildings B–E were built, the Council’s blanket rejection of the Campanellis’

proposal is clearly arbitrary and capricious. 80

     C. The Campanellis Will Not Be Awarded Attorneys’ Fees

       “Delaware courts, and this court specifically, follow the traditional ‘American

Rule’ by which each party bears its own fees and costs” incurred in litigation.81

As with most rules, there are exceptions. Relevant here, “Delaware courts have

previously awarded attorneys’ fees where (for example) ‘parties have unnecessarily

prolonged or delayed litigation, falsified records or knowingly asserted frivolous

claims.’” 82 “The party invoking [this so-called] ‘bad faith exception’ bears the

80
   Pls.’ Opening Br. at 43–44 (citing D.I. 42, Ex. Z); see also Dawejko v. Grunewald,
1988 WL 140225, at *3–4 (Del. Ch. Dec. 27, 1998) (explaining that the arbitrary and
capricious standard applies when a restrictive covenant is procedurally or substantively
“ambiguous and vague” or “imprecise and discretionary as to create the lik[e]lihood of [an]
arbitrary and capricious application”); Welshire Civic Ass’n v. Stiles, 1993 WL 488244, at
*3 (Del. Ch. Nov. 19, 1993) (explaining that prior approval covenants are restrictive
covenants).
81
  Jacobson v. Dryson Acceptance Corp., 2002 WL 31521109, at *16 (Del. Ch. Nov. 1,
2002).
82
 Nichols v. Chrysler Gp. LLC, 2010 WL 5549048, at *3 (Del. Ch. Dec. 29, 2010) (quoting
Montgomery Cellular Hldg. Co. v. Dobler, 880 A.2d 206, 227 (Del. 2005)).

                                            23
stringent evidentiary burden of producing clear evidence of bad-faith conduct by the

opposing party.”83

         Nothing in this record suggests the Council delayed the litigation or made any

false statements. 84 Nor is there any basis in the record, much less “clear evidence,”

upon which the Court could conclude that the Council has asserted frivolous claims

or defenses or otherwise has acted in bad faith. 85 The Campanellis will not be

awarded attorneys’ fees.

                                 III.   CONCLUSION

         For the forgoing reasons, the Campanellis’ motion for summary judgment is

GRANTED, except with respect to their request for reimbursement of attorneys’

fees and expenses, which is DENIED. The Council’s cross-motion for summary

judgment is DENIED. The Campanellis shall submit a proposed form of final

declaratory judgments, on notice to defense counsel, within the next ten (10) days.

83
   Marra v. Brandywine Sch. Dist., 2012 WL 4847083, at *4 (Del. Ch. Sept. 28, 2012)
(internal quotations omitted).
84
     See Nichols, 2010 WL 5549048, at *3.
85
     See Marra, 2012 WL 4847083, at *4.

                                            24