C.A. No. 2021-0655-SG
Del. Ch.Jun 14, 2022Background:
- Plaintiff Wilmington Friends School (private school) owns a 21-acre parcel in the Alapocas neighborhood subject to deed restrictions administered by Alapocas Maintenance Corporation (AMC).
- The School applied to AMC to construct primary-school buildings and parking on ground now used as lawn/ball fields; AMC denied consent citing Paragraph 5’s authority to reject plans that are not "suitable or desirable" and considerations including "harmony with the surroundings."
- The School sued for declaratory relief, asserting its project complies with the deed restrictions or, alternatively, that the restrictions are unenforceable; parties cross-moved for judgment on the pleadings; facts undisputed.
- Delaware law: restrictive covenants strictly construed for landowners; ambiguity resolves for owner; burden is on the HOA to show its enforcement is reasonable and non-arbitrary; aesthetic-only restrictions are disfavored.
- Paragraph 5 delegates broad discretion (suitability, materials, site, harmony, effect on outlook); the court assumed Paragraph 5 applies to the School’s tract but found most delegated criteria unenforceable as vague and arbitrary.
- The court held AMC’s denial based solely on loss of open green space (invoking ‘harmony’) is an arbitrary aesthetic judgment and therefore unenforceable as applied to the School’s development.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Paragraph 5's 'harmony' ground to deny development that reduces open space | Paragraph 5 cannot be used to bar development that decreases green space; covenants construed for landowner; harmony cannot impose density/open-space limits | Paragraph 5 authorizes denial when development would be inharmonious with surroundings (loss of open space is inharmonious) | Court: Denial based on loss of open space is arbitrary; 'harmony' cannot be applied here to limit density; unenforceable as applied |
| Vagueness / delegation—whether criteria like 'suitability' and 'outlook' are enforceable | These criteria are overly vague and permit arbitrary enforcement; unenforceable | AMC contends its predecessor’s criteria vest proper review authority | Court: 'Suitability' and similar criteria are unenforceable as impermissible delegation; only certain harmony restraints are permissible where objective standards exist |
| Applicability of Dolan precedent (visual harmony restriction) | Dolan is distinguishable; here there is no coherent visual style to make harmony objective | AMC relies on Dolan to support a harmony-based denial | Court: Dolan is cabined to developments with a coherent visual style; its rationale does not apply here |
| Burden to show non-arbitrary, reasonable application of covenant | School: AMC failed to show non-arbitrary, even-handed application; no objective standards for where school may build | AMC: It acted reasonably under Paragraph 5's standards | Court: AMC did not meet its burden; refusal was based on current board aesthetics and thus unreasonable |
Key Cases Cited
- Equitable Tr. Co. v. O'Neill, 420 A.2d 1196 (Del. Super. Ct. 1980) (restrictive covenants will not be enforced beyond the fair and natural meaning of the words used)
- Seabreak Homeowners' Ass'n, Inc. v. Gresser, 517 A.2d 263 (Del. Ch. 1986) (overly vague covenants that do not lend themselves to even-handed application are unenforceable)
- Alliegro v. Home Owners of Edgewood Hills, Inc., 122 A.2d 910 (Del. 1956) (an objective showing of inharmoniousness among comparable residential lots can support enforcement)