El Di, Inc. v. Town of Bethany Beach
477 A.2d 1066
Del.
1984
Check Treatment

*1 coverage motorist to increased uninsured

Arms in 1978 when he was is- November DI, INC., corporation, a Delaware EL O’Hanlon, policy. sued new See Below, Appellant, Defendant Accordingly, F.Supp. we conclude at 335. to that that State Farm’s failure observe duty implied in an of a resulted extension BEACH, The TOWN OF BETHANY et continuing offer additional uninsured al., Below, Appellees. coverage motorist to the extent of the less- $300,000 bodily injury er or the limits Supreme Court of Delaware. policy. Arms’ he had 100/300 Because Superior policy, agree 1983. we that Oct. Submitted: properly uninsured motorist revised his April 1984. Decided: coverage equivalent to an amount. makes

State Farm much the burden being to

on insurers in forced offer addi- coverage

tional motorist whenev- uninsured renewal, policy,

er a new than a other light,

issued. law The burden is and the nothing To bur-

admits less. meet the den, only comply an need insurer § 3902(b)

plain language of 18 Del.C.

(Supp.1982). rejection Absent a written coverage to

additional communicated agent

insurer or its reasonable insurer,

time fixed insurer protec- acceptance

assume the additional

tion, coverage write the to the extent of $300,000 bodily injury lim-

lesser policy, charge pre-

its of the the additional legal accordingly,

miums and have recourse collect same.

to compen

This result is consonant with the

satory purpose of uninsured vehicle cover

age statutory pro and its mandate of

moting protection. increased use of this law, with Delaware the offer

Consonant coverage whenev

additional must made policy respects in such

er insured, coverage provided,

the vehicle identity the named insured.

and/or the Waln, 395 So.2d at

Cf. sum, in failing to we conclude additional uninsured motorist cover-

offer pursuant Del.C.

age to Arms

§ 3902(b), Farm extended a continu- State coverage an amount

ing offer of such liability coverage.

equal Arms’ basic Superior we

Accordingly, affirm plaintiff’s policy.

Court’s revision

AFFIRMED. *2 Wilson, (argued),

Robert L. Halbrook Bayard, Georgetown, Halbrook & James B. Tyler, III, Georgetown, Nicholas H. Rodri- guez, Schmittinger Dover, Rodriguez, & plaintiffs below-appellees. HERRMANN, C.J., HORSEY, Before CHRISTIE, JJ., MOORE and and STIF- TEL, Judge, constituting President Court en banc.

HERRMANN, Chief Justice for the ma- jority: appeal

This is permanent an from a in- junction granted by the Court of Chancery upon petition plaintiffs, al., Town prohibiting et defendant, Di, (“El Di”) El Inc. selling beverages alcoholic Holiday at House, a in Bethany restaurant Beach operated owned El Di. I. pertinent facts are as follows:

El purchased Di Holiday House in December El Di filed an application with the State Alcoholic Bever- age (the Control Commission “Commis- sion”) for a license to sell alcoholic bever- ages at the April House. On 1982, finding “public need and conve- nience,” granted the Commission the Holi- day on-premises House an license. The sale of beverages at began House days within 10 of the Com- approval. subsequent- mission’s ly enjoin filed suit to permanently the sale beverages of alcoholic under the license. appeal it undisputed On that the chain of title for the House lot included James D. (argued), Griffin of Griffin & restrictive prohibiting covenants both the Hackett, P.A., Georgetown, for defendant sale of alcoholic property on the below-appellant. and nonresidential construction.* * building, The restrictive covenant stated: out or back which be erected on lot, building buildings the rear of said and no or expressly subject "This covenant is made shall be erected thereon within ten feet of the viz; upon following conditions: That no and, building front line of said lot if lot be said intoxicating liquors shall ever be sold on the lot, building a corner lot within ten feet of the line dwelling cottage said that no other than abuts, lot, street on of the side which it and that all shall be erected thereon and but one to each buildings erected or to according be erected on said lot which must be of full size to the said however, kept neatly painted; plan, excepting, necessary shall a breach of which suitable and 10,000 placed people corpo- within proximately restriction was same 48,000 early and 1901 rate people as 1900 limits and to some Beach develop- the area was first under a 4 enacted when mile radius. Town zoning ment. a cen- ordinance which established designated tral C-l lo- commercial district conceived, Bethany As Beach *3 Holiday cated in the section. old-Town community. a The quiet was to be beach House is located in this district. the the site was selected at end of nine- teenth-century by Missionary the Christian purchased Di House in Since El Society Washington, the D.C. carry patrons permitted have to been Bethany Improvement Company Beach their with them own (“BBIC”) pur- BBIC was formed. The into consume their the restaurant to lands, development out a and chased laid “brown-bagging” practice oc meals. This began selling quiet lots. To insure the prior El Di’s House to curred at the community, character of the BBIC in the ownership and at other restaurants many plots, placed restrictive covenants on applied Town. El Di for a license to sell prohibiting the sale of alcohol and restrict- response liquor Holiday in to the at House ing cottages. to residential construction were increased number of customers who original development, acre how- Of the 180 in the engaging and ever, approximately Vs was unrestricted. permit belief would restau that the license use management rant to control excessive Bethany Town official- The Beach was by use minors. Prior to alcohol and incorporated municipal lim- ly in 1909. The license, sought time El Di a alcoholic bever including its consisted of 750 acres ages readily had been and continue (hereafter original original land BBIC nearby estab available for sale at licensed “old-Town”), expanded beyond far or but xhmile including: lishments one restaurant acre development. the 180 BBIC The ex- limits, the Town 3 restaurants with outside incorporated panded acreage newly of the Town, a in a 4 mile of the radius Town, plots combined with unrestricted package yards store some 200-300 Town, original percent left 15 in the House. new to the restrictive Town covenants. granted stay pending a Trial Court appeal. the outcome of this

Despite prohibiting the restriction com- (“no building dwelling other a mercial than II. ”), cottage commer- or shall be erected ... plaintiffs’ per motion a development began granting in the 1920’s on

cial Chancery injunction, This the Court of property subject covenants. manent inns, argument development rejected defendant’s included numerous res- stores, taurants, bank, motels, Bethany ren conditions in Beach drug hall, in- shops selling various items dered the restrictive covenants unreason town Citing food, gifts cluding clothing, and novelties able and therefore unenforceable. § 564; Property, businesses. Of the Restatement Wel and other commercial shire, Harbison, A.2d buildings Del.Supr., v. 91 presently commercial Inc. 34 Ceccarone, (1952); limits, in the 404 Town 29 are located old- Cruciano Del.Ch., (1957). A.2d developed by BBIC. To- The Chan Town cery although evi Bethany popu- found that day, permanent Beach has a Court growth since In the sum- dence showed considerable of some 330 residents. lation population and the number of ap- increases to 1900 in both population months the mer conditions, them, enjoined equi- any or shall cause said the same be restrained said or assigns, ty by grantor, again or revert his heirs lot to to and become injured upon plan party grantor, assigns; and in said or other heirs and co-lot owner his restrictions, by such breach.” such breach of said conditions or buildings Bethany “the basic na- It is uncontradicted that one pur- of the Bethany quiet, poses ture of family underlying Beach as a the covenant prohibiting changed.” intoxicating liquors oriented resort the sale of has not was main- quiet, also tain a residential atmosphere found that there had been devel- opment area. Each of restricted activity additional cov- objective, enants reinforces this including but that this “activity is limited to a small restricting the covenant area of construction to mainly Beach and consists dwellings. residential covenants read activities for the pa- convenience and as a whole evince an intention on the tronage the residents of grantor residential, to maintain the Beach.” seaside character of the community. The Trial rejected Court also defendant’s But time has not left Bethany Beach the plaintiffs’ contention that acquiescence and grantors same its envisioned *4 abandonment rendered the covenants unen- The Town has from a connection, forceable. In this the Court church-affiliated residential community to a practice concluded that the “brown-bag- annually summer resort visited by thou- ging” was not a sale of alcoholic sands of tourists. Nowhere is the result- that, therefore, any failure to enforce change ant in character more evident than against practice restriction as did in the C-l section of the old-Town. Plain- not constitute abandonment or waiver of argue tiffs that this is a change relative the restriction. only and that there is sufficient evidence to support the Trial findings Court’s that the III. residential character of the has We find that the Trial Court in erred been maintained and that the covenants holding change that the of conditions was continue to benefit the other lot owners. negate insufficient to the restrictive cove- agree. We cannot nant. 1909, the 180 acre restricted old-Town section incorpo became of a 750 acre A court will not enforce a restric municipality. rated prior Even tive covenant where change a fundamental incorporation, Town’s the BBIC deeded out has occurred in the intended character of lots free of restrictive covenants. Af neighborhood that renders the benefits incorporation partly ter due the un underlying imposition of the restrictions in BBIC, restricted lots deeded out 85 capable enjoyment. Welshire v. Harbi percent of the land area within the Town son, Del.Supr., (1952); 91 A.2d 404 1.77 Signifi was not to the restrictions. State, Acres Del.Supr., Land v. 241 A.2d cantly, quickly nonresidential ap uses (1968); Tsiarkezos, 513 Williams v. Del. peared today in the restricted area and Ch., (1970). 272 A.2d 722 of all the Review old-Town section contains almost all of the facts and circumstances convinces us that within the entire businesses 1901, change, in the character of Holmes, Town. Contrast Whitaker v. that area of the old-Town section now 30, (1952) Ariz.Supr., 74 Ariz. 243 P.2d 462 zoned is so justify C-l substantial as to (original grantors specifically provided for modification of the deed restriction. We vitality continued of the covenants need not change determine a in character established). event a Town was later of the entire restricted area in order to Moreover, these commercial uses have applicability assess the continued unchallenged gone years. for 82 Contrast portion Noyes covenant to a thereof. See Ibach, Humphreys v. N.J.Supr., 110 McDonnell, Okl.Supr., v. P.2d 398 838 647, (1932). N.J.Eq. A. 160 531 (1965); Co., Palmer v. Amusement Circle 356, Ct.App.N.J., N.J.Eq. change 130 22 241 A.2d conditions is also re (1941). flected in the Town’s decision in 1952 to 1070 including the lot property, provides

zone restricted tion substantial benefit to the located, House is other lot owners. We find the cases on on which Although relies plaintiff distinguishable: for commercial use. which specifically dispositive as change zoning not is Brown, (D.C. v. 109 F.2d 830 Jameson covenant, private it is additional Cir.1939), similarly all of the lots were re changed community evidence of conditions. there was waiv stricted and no evidence of Rose, Cal.Dist.Ct.App., Bard v. 203 Cal. prohib er or abandonment the covenant 232, (1962). App.2d Cal.Rptr. spiritous liquors. iting the sale Camfield, Ark.Ct.App., v. See Owens viola court found evidence of one isolated (1981). Ark.App. 614 S.W.2d 698 long-tolerated prac tion—in contrast “brown-bagging” Bethany tice of Beach. Time has not the strict relaxed Compare Alamogordo Improvement Co. area, ly residential character but the 40, 109 Prendergast, N.M.Supr., 45 N.M. consumption pattern of alcohol use and (1940). In P.2d 254 Brookside Communi practice has well. Williams, Del.Ch., 290 A.2d ty, Inc. v. unchallenged twenty at least continued (1972), general rule 306 A.2d 711 aff'd, at commercial located years establishments is stated effect of a Delaware as to the restricted in the Town. On separable of a The case waiver covenant. plaintiffs rely Trial Court appeal, on the distinguishable here we consider because finding “brown-bagging” practice conjunction waiver in with our assessment inas irrelevant as evidence of waiver *5 change of the of conditions in the communi practice as the not involve the much does change ty. alleged No such was or ad intoxicating by liquors prohibited sale of Tacony dressed Williams. In Benner v. “brown-bag the covenant. We find the Ass’n, Pa.Supr., Pa. Athletic ging” practice significant evidence of a (1938), A. 390 it was that commercial found community change conditions in the were residen encroachments few and that inception its at the turn of the centu properties closely still surrounded the tial consumption public ry. of alcohol Such Bethany lots. Beach com commercial by own places generally is now tolerated in, simply crept but mercial uses have not similarly The license ers of restricted lots. given through have been official sanction to the House establishment issued Zoning the 1952 Ordinance. El Di better permits management the argued commercial availability consumption It is further that the control and liquors are restricted to a small area within intoxicating premises. on uses its significantly, ready availability alco the old-Town section. But of both the view the section which House is locat- surrounding in the holic area entirely commercial. The business ed long-tolerated House and and uses, availability alcohol in close “brown-bagging,” increasing use en section, repeated to this proximity covenant at forcement restrictive “brown-bagging” in the C-l district use of time would serve to subvert this render the intended benefits the avail interest the control of public in what has be- the covenants unattainable consumption li ability and of alcoholic an area detached in character come quors. strictly surroundings residential pro- contend covenant Plaintiffs that the west. intoxicating liquors hibiting the sale change In the In view of the in conditions separate from the other covenants. view, district of we plaintiffs’ sale restriction in the C-l alcohol prohibi- inequitable unreasonable now to purpose distinct from the find it serves ar- permit enforce the restrictive To tion of nonresidential uses. covenant. therefore, prohibit gue, despite that evidence unlimited but to uses, liquor, sale restric- licensed sales under commercial alcohol case, plan circumstances of this is inconsistent tions would be those who to benefit application reasonable commercially. of the re- contrary public striction and policy. question I the propriety also of the is- emphasize judgment We that our liquor is con- suance of a license for the sale of fined to the area of the old-Town section liquor which is to a zoned C-l. The neigh- specific restrictions in the restrictive covenant such boring residential area are unaffected sales.

the conclusion we reach herein. I play think that restrictive covenants preservation neighbor-

vital in the State, hood schemes all over and that a Reversed. complete much more breakdown of the CHRISTIE, Justice, MOORE, with whom neighborhood required scheme should be Justice, joins, dissenting: before a court declares that a restriction has become unenforceable. respectfully disagree I majority. with the I would affirm the Chancellor. I supports think the evidence the conclu- Chancellor, fact, sion of the as finder of

that basic nature of the

Bethany Beach has not in such a

way as to invalidate those restrictions

which have protect continued to this com-

munity through years grown. as it has

Although some of the restrictions have ignored portion

been and a of the communi- YOUNG, Jr., Plaintiff, Hansome ty is now used for limited pur- poses, the evidence shows quiet, Beach remains a family-oriented re- COMPANY, O.A. NEWTON & SON a Del- liquor sort where no is sold. I think the *6 corporation, aware and the Home In- conditions are still con- demnity Company, foreign corpora- sistent with the enforcement of a restric- tion, Defendants. forbidding tive covenant the sale of intoxi- cating beverages. Superior Delaware, County. New Castle my opinion, prac- the toleration of the bagging” tice of “brown does not consti- Submitted: Dec. 1983. tute the longstanding abandonment of a Decided: March against restriction the sale of alcoholic bev- erages. has, The restriction sales fact, remained intact for more than

eighty years violations thereof

have been short-lived. The fact that alco- beverages may purchased right

holic

outside the town is not inconsistent with

my quiet-town atmosphere view that the down, small area

this has not broken preserved.

that it can and should be Those buy choose to land to the re-

who required should be

strictions to continue to by the restrictions.

abide

I think the real beneficiaries of the

failure of the courts to enforce the restric-