Middlecap Associates, LLC v. The Town of Middletown ( 2023 )


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  •      IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    MIDDLECAP ASSOCIATES, LLC                    )
    )
    Petitioner,         )
    )
    v.                                           )     C.A. No. 2022-0234-MTZ
    )
    THE TOWN OF MIDDLETOWN, a                    )
    Municipal corporation of the State of        )
    Delaware, THE TOWN OF                        )
    MIDDLETOWN TOWN COUNCIL,                     )
    the governing body of the Town of            )
    Middletown, and KENNETH L.                   )
    BRANNER, JR., JAMES REYNOLDS,                )
    AARON BLYTHE, JAMES ROYSTON,                 )
    DREW CHAS, ROBERT MCGHEE and                 )
    ROBERT STOUT, in their individual            )
    and official capacities as Member of the     )
    Town of Middletown Town Council              )
    )
    Respondents.        )
    ORDER GRANTING MOTION TO DISMISS
    WHEREAS:
    A.    Petitioner Middlecap Associates, LLC has asked this Court of equity
    for a declaratory judgment and injunction against the above-listed Respondents to
    remedy what Petitioner alleges was an arbitrary, capricious, factually unsupported,
    and legally erroneous denial of a conditional use permit, which Petitioner alleges
    should have been granted under the governing town code (the “Town Code”).
    Petitioner also alleges procedural defects, including ex parte communications
    between Respondents and persons opposed to the conditional use. On March 11,
    2022, Petitioner brought three counts for declaratory judgment, two of which allege
    violations of the town code and the Delaware code, and a fourth count for injunctive
    relief “compelling the Respondents to approve the Petitioner’s Application.”1 The
    complaint relies on “Article IV, Section 10 of the Delaware Constitution of 1987,
    as amended, 10 Del. C. § 341, 10 Del. C. § 6501-6502, and this Court’s equitable
    cleanup doctrine” for subject matter jurisdiction.2
    B.     On May 11, Respondents moved to dismiss, asserting this Court lacks
    subject matter jurisdiction over Petitioner’s declaratory judgment claims that need
    not be enforced by an injunction, and that Petitioner’s allegations fail to satisfy the
    criteria for injunctive relief (the “Motion to Dismiss”).3 The parties briefed the
    Motion to Dismiss and I took it under advisement on January 31, 2023.4
    AND NOW this 2nd day of February, 2023, IT IS ORDERED that the
    Motion is GRANTED and the Complaint is dismissed subject to being transferred
    to the Superior Court under 10 Del. C. § 1902.
    1.     As a prefatory matter, because an injunction is a remedy rather than a
    cause of action, I consider Petitioner’s complaint to be seeking three declaratory
    judgments and an injunction based on violations of governing positive law and the
    1
    Docket Item (“D.I.”) 1 ¶ 49.
    2
    Id. ¶ 3.
    3
    D.I. 5.
    4
    D.I. 9, 13, 14.
    2
    Respondents’ obligations in considering a conditional use permit. I therefore take
    on the Motion to Dismiss, including the argument that Petitioner has not fairly pled
    the need for an equitable remedy, under Court of Chancery Rule 12(b)(1).
    Petitioner bears the burden of establishing that the Court has subject matter
    jurisdiction over its claims.5
    2.     Earlier today, my chambers issued Delta Eta v. Mayor & Council of
    the City of Newark, C.A. No. 2021-1106-MTZ, D.I. 45 (Del. Ch. Feb. 2, 2023). In
    that opinion, I did my best to explain that this Court lacks subject matter jurisdiction
    over cases like this one, in which the petitioner seeks a declaratory judgment
    enforced by an injunction to remedy and reverse the allegedly wrongful denial of a
    conditional use permit application. This type of claim is a legal claim based on
    statutory rights, but without a specific grant of statutory jurisdiction. To secure this
    Court’s jurisdiction, the claim must require equitable relief due to the absence of an
    adequate remedy at law. Delta Eta explains that this Court will lack jurisdiction
    where a plaintiff fails to plead an injunction is needed to prevent future harm, or is
    otherwise necessary to enforce a declaratory judgment as against governmental
    actors, who our law presumes will comply with any declaratory judgment.6 It also
    5
    Maloney-Refaie v. Bridge at Sch., Inc., 
    2008 WL 2679792
    , at *7 (Del. Ch. July 9,
    2008).
    6
    See In re COVID-Related Restrictions on Religious Servs., 
    285 A.3d 1205
    , 1233 (Del.
    Ch. 2022).
    3
    explains that where a writ of certiorari is available, the plaintiff bears the burden of
    establishing that writ cannot afford an adequate remedy at law.
    3.    My reasoning and conclusions in Delta Eta apply with equal force to
    this matter. The denial of Petitioner’s conditional use permit was a quasi-judicial
    act, guided by Town Code requirements for a conditional use allowed in the C-3
    Zoning districts. For the reasons stated in Delta Eta, a writ of certiorari is or was
    available to Petitioner.
    4.    The parties’ briefing does not address the issue of whether a writ of
    certiorari issued by the Superior Court could provide an adequate remedy.
    Nevertheless, I find that a writ of certiorari is or was available, and capable of
    affording an adequate remedy at law. Accordingly, this Court lacks subject matter
    jurisdiction over Petitioner’s claims.
    5.    Additionally, Petitioner argues that a declaratory judgment
    invalidating the denial of Petitioner’s application affords an inadequate remedy
    because without an injunction, Petitioner must reapply and potentially face another
    wrongful denial. It appears to me that Petitioner could have sought a declaration
    that it was entitled to the conditional use permit based on the record before the Town
    of Middletown Town Council, which would have obviated the need for injunctive
    relief.7 Petitioner’s reliance on Gibson v. Sussex County Council does not mandate
    7
    See In re COVID-Related Restrictions, 285 A.3d at 1233.
    4
    a different outcome.8 Gibson found that under the facts and circumstances of the
    case, the exercise of equitable jurisdiction was “justifiable,” and does not stand for
    the proposition that this Court will always have jurisdiction over challenges to the
    denial of conditional use permits.9 Petitioner has failed to demonstrate that a
    declaratory judgment could not provide full and fair relief under the circumstances
    of this case.
    6.     I do not reach whether Petitioner has stated a claim for monetary
    damages or a basis to shift attorneys’ fees. Those matters must be decided by a
    court with subject matter jurisdiction to do so.
    /s/ Morgan T. Zurn
    Vice Chancellor Morgan T. Zurn
    8
    
    877 A.2d 54
     (Del. Ch. 2005).
    9
    
    Id.
     at 79–80.
    5
    

Document Info

Docket Number: C.A. No. 2022-0234-MTZ

Judges: Zurn V.C.

Filed Date: 2/2/2023

Precedential Status: Precedential

Modified Date: 2/2/2023