John Campanelli and Mary Campanelli v. The Coffee Run Condominium Council and The Coffee Run Condominium Council Inc., C.A. No. 2018-0391-JRS

Background

Plaintiffs John and Mary Campanelli bought the rights to construct “Building A” in the Coffee Run Condominium in 1990; Building A was never constructed because of earlier sewer issues.
The Condominium’s Governing Documents (Declaration and Code of Regulations) were amended repeatedly; the operative documents allocate condominium fees among 181 existing units and exclude the 45 units anticipated in Building A.
Sewer work finished in 2015; the Campanellis submitted builders’ designs for Building A to the Condominium Council, which rejected each submission as noncompliant with the recorded Declaration Plan.
Shortly after the submissions, the Council began charging the Campanellis monthly condominium fees for the 45 unbuilt units and back-charged roughly one year of fees.
The Campanellis sued seeking declaratory relief and an injunction; the parties cross-moved for summary judgment on four discrete issues (fees for unbuilt units; validity of the Council’s rejection; separate accounting/billing for Building A; attorneys’ fees).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1) May Council charge condominium fees for unbuilt units?	Campanelli: No — operative Declaration/Code allocate fees to the 181 existing units and exclude unbuilt units; DUPA/DUCIOA don't override documents.	Council: Fees can be charged and amendments were effective; Campanellis owe past and ongoing fees.	Held: No fees owed. Operative Governing Documents allocate fees only to the 181 existing units; Campanellis may not be charged for unbuilt units.
2) Was Council’s rejection of the Building Plan valid under the Declaration’s architectural-review regime and Declaration Plan?	Campanelli: Section 17(c) lacks fixed standards and is unenforceable; the Declaration Plan is tentative/vague and subject to reasonable modification.	Council: Rejection proper because proposed plans deviate from the recorded Declaration Plan and Council has review authority.	Held: Rejection invalid. Section 17(c) is too vague (no fixed standards) and the Declaration Plan is imprecise and subject to reasonable modification; the submitted Building Plan is reasonable.
3) Should Building A be subject to separate accounting and billing?	Campanelli: Yes — Section 12(b) permits separate accounting where design/construction cause substantially different operating costs.	Council: Rejected the proposal (saying it didn’t understand it) and refused to permit separate billing.	Held: Yes. Separate accounting/billing is contractually permissible and Council’s blanket rejection was arbitrary and capricious.
4) Are plaintiffs entitled to attorneys’ fees?	Campanelli: Seek fees under bad-faith exception to American Rule.	Council: No basis for fee award; no bad faith.	Held: No. Plaintiffs did not meet the stringent clear-evidence standard for bad-faith fee shifting; each side bears its own fees.

Key Cases Cited

Northwestern Nat’l Ins. Co. v. Esmark, Inc., 672 A.2d 41 (Del. 1996) (contracts must be construed as a whole to effectuate parties’ intentions).
Council of Dorset Condo. Apartments v. Gordon, 787 A.2d 723 (Del. Ch. 2001) (treating condominium governing documents as contractual and enforceable according to their language).
E.I. duPont de Nemours & Co. v. Shell Oil Co., 498 A.2d 1108 (Del. 1985) (principles of contract interpretation).
Realty Growth Invs. v. Council of Unit Owners, 453 A.2d 450 (Del. 1982) (recorded plans may be subject to reasonable modification; restrictions construed against drafter).
Seabreak Homeowners Ass’n v. Gresser, 517 A.2d 263 (Del. Ch. 1986) (architectural-review covenants that are vague or imprecise are unenforceable as they permit arbitrary application).
Nargiz v. Henlopen Developers, 380 A.2d 1361 (Del. 1977) (addressing validity and timing of recorded Declaration Plan in relation to completed construction).