Reserves Management Corp. v. R.T. Properties, LLC
2013 Del. LEXIS 582
| Del. | 2013Background
- The Reserves Management, LLC (Reserves) administers a 180‑lot residential community governed by a Declaration of Restrictions imposing periodic assessments on lot owners.
- In 2005 Reserves Development (affiliate) sold 17 lots to R.T. Properties; those lots were later transferred to four R.T. affiliates. The Sale Agreement noted lots would be developed and sold to homebuyers.
- In 2008 the Declaration was amended to add a sewer‑connection assessment (~$4,000 per lot).
- Reserves invoiced R.T. Properties for accrued assessments (including back assessments) beginning in 2009; R.T. Properties asserted a contractual forbearance defense based on the Sale Agreement and alleged oral agreements deferring assessments until a lot was sold with a certificate of occupancy.
- The Superior Court granted summary judgment to R.T. Properties on all assessments except the sewer charge by concluding there was a forbearance agreement; it also granted summary judgment to R.T. Properties on the sewer assessment as an invalid amendment vis‑à‑vis R.T. Properties.
- The Delaware Supreme Court affirmed the sewer‑assessment ruling, reversed the forbearance summary judgment (finding material fact disputes about an oral forbearance), and remanded for trial on the forbearance issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Sale Agreement contained an enforceable forbearance promising to defer assessments until sale to third‑party buyers with COs | Sale Agreement does not promise forbearance; summary judgment for Reserves should have followed | Sale Agreement (and course of conduct/deposition) embodied/confirmed a forbearance deferring assessments until resale/CO | Court: Paragraph 10 does not itself promise forbearance; existence of an oral forbearance is supported by evidence, creating triable issues — summary judgment for R.T. Properties reversed and remanded |
| Whether any forbearance (if proved) is enforceable against Reserves or the R.T. affiliates despite not being parties to the Sale Agreement | Forbearance unenforceable because Reserves/affiliates were not parties to the written Sale Agreement | Forbearance could be a separate oral agreement binding relevant parties; enforceability is a factual question | Court: Whether non‑signatories are bound is factual; denial of summary judgment to Reserves affirmed |
| Whether alleged breaches of the Sale Agreement by R.T. Properties negate any forbearance obligation | R.T. Properties’ failure to build homes breached the Sale Agreement, extinguishing any forbearance duty | Effect of any breach on a separate forbearance agreement is fact‑dependent | Court: Impact of alleged breach is fact dependent; not a basis for summary judgment to Reserves |
| Validity/enforceability of the sewer‑connection assessment amendment against R.T. Properties | Amendment valid; earlier Superior Court ruling in related case shows R.T. Properties obligated to pay sewer fees | Amendment invalid as to R.T. Properties because original Declaration did not reserve authority to impose a later substantial monetary assessment and buyers lacked notice | Court: Amendment not enforceable against R.T. Properties as a matter of law; summary judgment for R.T. Properties on sewer charge affirmed |
Key Cases Cited
- Telxon Corp. v. Meyerson, 802 A.2d 257 (Del. 2002) (standard of review for cross‑motions for summary judgment)
- Arnold v. Soc'y for Sav. Bancorp, Inc., 678 A.2d 533 (Del. 1996) (summary judgment principles and de novo review)
- Williams v. Geier, 671 A.2d 1368 (Del. 1996) (summary judgment jurisprudence)
- Anglin v. Bergold, 565 A.2d 279 (Del. 1989) (precedent referenced for summary judgment review)