Canal Corkran Homeowners Association, Inc., a Delaware non-profit corporation v. Joseph Petrone

CourtCourt of Chancery of Delaware
DecidedApril 21, 2017
DocketCA 10562-MA
StatusPublished

This text of Canal Corkran Homeowners Association, Inc., a Delaware non-profit corporation v. Joseph Petrone (Canal Corkran Homeowners Association, Inc., a Delaware non-profit corporation v. Joseph Petrone) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Canal Corkran Homeowners Association, Inc., a Delaware non-profit corporation v. Joseph Petrone, (Del. Ct. App. 2017).

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

) Canal Corkran Homeowners Association, Inc., a ) C.A. No. 10562-MA Delaware non-profit corporation, ) Plaintiff, ) v. ) ) Joseph Petrone, ) Defendant. )

MASTER’S REPORT

Date Submitted: July 26, 2016 Draft Report: October 31, 2016 Final Report: April 21, 2017

A homeowners association is seeking to compel a property owner to remove a

crushed oyster shell driveway that was installed after the community’s architectural

review committee approved construction plans for the property which called for an

asphalt driveway. The property owner has refused to remove the crushed shells and

claims that (a) his driveway meets the standards of the restrictive covenant requiring

driveways to have solid surfaces, and (b) the architectural review committee failed to

follow its own procedures and denied him due process. For the reasons that follow, I

recommend that the Court order the property owner to remove the crushed oyster

shell driveway and install an asphalt driveway or apply to the architectural review

committee to install a driveway with materials specified in the pertinent restrictive

covenant.

Page 1 of 20 In 2001, a subdivision called Canal Corkran was established near Rehoboth

Beach, Delaware.1 It consists of single family homes, duplexes, and townhomes.2

Under the Declaration of Covenants, Conditions, Easements and Restrictions for

Canal Corkran, an association known as the Canal Corkran Homeowners Association,

Inc., (“the Association”) was “formed to operate, maintain and ultimately own the

Common Property; to perform, administer and enforce the covenants, conditions,

easements, restrictions and other provisions set forth in these Restrictions, any Rules

and Regulations promulgated by the Association, and any Traffic Regulations

promulgated by the Association.”3 The Association is responsible for “the

management, maintenance and operation of the Common Property and any

Association Property,” including “all streets, curbs and gutters within Canal

Corkran,” and “private open space areas (also referred to as ‘Park Areas’) and storm

water management areas as shown on the Record Plot, and all related facilities.” 4 The

Association acts through its Board of Directors (“Board”),5 but all matters requiring a

1 Ex. 2. 2 Townhomes are condominium units, but the owners of townhomes are also members of the homeowners association under Article 2 of the Declaration of Covenants, Conditions, Easements and Restrictions for Canal Corkran (“Declaration”). Ex. 2. 3 Art. 3.1of the Declaration. 4 Arts. 5.3.1 & 5.3.2 of the Declaration. 5 Arts. 4.4, 4.5 & 7.1 of the Declaration. Page 2 of 20 vote of the Association require the affirmative vote of a majority of Class A

members.6

Canal Corkran has an Architectural Committee (“ARC”) that was created “for

the purpose of establishing and enforcing criteria for the construction and

maintenance of Improvements within Canal Corkran.”7 Owners of properties in the

subdivision are responsible for all maintenance and repair of their properties,

including the residences thereon, subject to the approval of ARC. 8 The ARC consists

of a minimum of three to a maximum of five property owners in Canal Corkran. 9

However, it is the Board who has the authority and standing to enforce ARC’s

decisions in a court of competent jurisdiction.10 No construction and no

improvements may be made on any lands within Canal Corkran without the prior

written approval of ARC.

The restrictions regarding the general building requirements for residences in

Canal Corkran are quite extensive. They cover building materials, the size of a

residence, garages and accessory buildings, building setbacks, sidewalks, steps, and

6 All owners of a property in Canal Corkran, except the Declarant, are Class A members. The Declarant is a Class B member, and its membership terminates when the Declarant ceases to own any properties in Canal Corkran. Art. 3.3 of the Declaration. 7 Art. 1.2 of the Declaration. 8 Arts. 5.1 & 5.7 of the Declaration. 9 Art. 8.2.1 of the Declaration. 10 Art. 8.2.2 of the Declaration. Page 3 of 20 driveways, among other items.11 However, ARC is authorized to grant variances

from any of the provisions of the restrictions when:

circumstances such as topography, natural obstructions, hardship, location of property lines or where aesthetic or environmental considerations so require, but only in accordance with duly adopted Rules and Regulations. Such variances may only be granted, however, when unique circumstances dictate and no variance shall (a) be effective unless in writing; (b) be expressly contrary to the restrictions set forth in these Restrictions; or (c) prevent the Architectural Committee from denying a variance in other circumstances.12

On March 8, 2013, Defendant Joseph Petrone purchased a lot in Canal

Corkran.13 On June 18th, Petrone submitted a “Canal Corkran Architectural Review

Application” to ARC.14 Petrone was seeking to build a two-story residence

approximately 4900 square feet in size. According to his trial testimony, Petrone’s

builder filled out the application, but Petrone signed it.15 By signing this document,

Petrone was acknowledging that he had received and read a copy of the Canal

Corkran restrictions and covenants, the ARC approval process and review

requirements, and the Canal Corkran Contractor and Property Owner Code of

Conduct. The five-page application required the applicant to provide detailed

information concerning the proposed builder, architect, building dimensions,

setbacks, square footage, siding, foundation, windows, doors, shutters, roof, patios,

11 Art. 8.2.8 of the Declaration. 12 Art. 8.2.7 of the Declaration. 13 Ex. 1. 14 Ex. 5. Page 4 of 20 decks, front steps, walkways, driveway, landscaping and tree plan, fences and walls.

Paragraph 15 of the application required Petrone to describe the material(s) and

color(s) of his proposed driveway and to submit samples or pictures for ARC to

review if other than concrete or asphalt. Petrone’s application listed “asphalt” as the

material to be used for his driveway. In Paragraph 16, a handwritten notation

indicated that Petrone’s landscape and tree plan would be submitted for review on

July 13, 2014.16 At the bottom of the first page of Petrone’s application was the word

“IMPORTANT” in bold letters, followed by this notation:

Please Note: Property Owner must notify the Canal Corkran Architectural Committee of any intended changes to be made to the approved construction plans or to any of the information provided on this application. Additionally, Property Owner shall not proceed with any intended changes until they receive written approval from the Architectural Committee.17

In November 2013, Petrone requested a variance to construct a covered

porch/gazebo within the 30-foot front yard setback.18 Petrone’s request was denied

by ARC on November 16th, and in an email dated November 19th, Petrone asked

ARC to reconsider his request.19 After receiving no response to this request, Petrone

emailed the members of ARC and Canal Corkran’s property manager, Julie Banks,

15 Trial Transcript (“TT”) 172. 16 In fact, the landscape plan was not submitted until April 30, 2014, and ARC approved the plan on May 13, 2014. Ex. 10 (b) & (c); Ex. 11 (s) & (t). 17 Ex. 4 18 Ex. 11(n). 19 Ex. 11(n) & (p). Page 5 of 20 asking how to appeal ARC’s decision. Banks responded by stating that Petrone

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Canal Corkran Homeowners Association, Inc., a Delaware non-profit corporation v. Joseph Petrone, Counsel Stack Legal Research, https://law.counselstack.com/opinion/canal-corkran-homeowners-association-inc-a-delaware-non-profit-delch-2017.