G-Wilmington Associates v. Riverside Hospital Redevelopment, LLC
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Opinion
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
G-WILMINGTON ASSOCIATES, ) ) Plaintiff, ) ) v. ) C.A. No. 2024-0090-LM ) RIVERSIDE HOSPITAL ) REDEVELOPMENT, LLC, ) LANDON CONSTRUCTION, LC, ) CONSTRUCTION DELAWARE, INC., ) and the CITY OF WILMINGTON, ) ) Defendants. )
POST-TRIAL FINAL REPORT
Final Report: October 31, 2025 Date Submitted: June 9, 2025
Christopher P. Simon, David G. Holmes, CROSS & SIMON, LLC, Wilmington, DE; Counsel for Plaintiff G-Wilmington Associates.
Stephen A. Spence, Sean A. Meluney, MELUNEY ALLEMAN & SPENCE, LLC, Wilmington, DE; Counsel for Defendant Riverside Hospital Redevelopment, LLC and LC Construction Delaware, Inc.
William E. Gamgort and Carmella Cinaglia, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, DE; Counsel for Defendant City of Wilmington.
Mitchell, M. This matter comes before the Court on a dispute arising out of an easement
agreement that allowed a right of access on property owned by the plaintiff, the
owner of a shopping center. The plaintiff brings this action against three defendants,
a neighboring housing developer, a construction company, and the City of
Wilmington, alleging a breach of agreement, trespass, and related claims stemming
from the alleged unauthorized extension of an easement across the plaintiff’s
property. The plaintiff contends that the defendants exceeded the scope of the
easement as agreed and thereby encroached upon and trespassed onto the plaintiff’s
property. For reasons explained in greater detail below, I find there is a breach of the
easement agreement and trespass onto the Plaintiff’s property, however I do not find
it appropriate to terminate the agreement and order the removal of the sidewalk.
I. BACKGROUND1
Plaintiff, G-Wilmington Associates (hereinafter, “GWA”) is the owner of the
Miller Road Commons shopping center (hereinafter, the “GWA Property”).2 LC
Construction (hereinafter, “LCC”) and Riverside Housing Redevelopment
(collectively, “Defendants”) are companies with their principal place of business in
1 The facts in this report reflect my findings based on the record developed at trial. I grant the evidence the weight and credibility I find it deserves. Citations to the transcript will be in the form of “Tr. __.” Citations to the Docket are cited in the form of “D.I. __”. Deposition transcripts are cited as “[Last Name] Dep. Tr.__.” The parties submitted joint exhibits numbered 1-138. Citations to the joint exhibits are in the form of “JX__.” 2 Tr. 7:20–24; D.I. 82 at ¶B1; JX 97. Delaware.3 In May 2019, Defendant, Riverside Housing Redevelopment
(hereinafter, “RHR”) purchased a 4.6-acre parcel adjacent to the GWA Property
(hereinafter, the “RHR Property”).4 The City of Wilmington (hereinafter, the “City”)
assisted in orchestrating the purchase of the RHR Property and is the third defendant
here.5
A. The Properties
The 17.5-acre GWA Property, located at 3600 Miller Road in New Castle
County, Wilmington, Delaware, contains approximately eight or nine stores
comprised of about 165,000 square feet of rentable space.6 GWA asserts they
acquired this Property in 1980.7 The shopping center, as it stands today, is located
between Miller Road to the north, Franklin Place to the south, and West 37th Street
to the east side of the property, outside the boundaries of the City.8
The RHR Property is located at 710 Lea Boulevard, Wilmington, Delaware.9
Unlike the GWA Property, the RHR Property is within the boundaries of the City of
3 D.I. 82 at 6. 4 Tr. 308:15–16; D.I. 82 at ¶B8. 5 D.I. 82 at ¶A4. 6 Tr. 15:3–10; D.I. 82 at ¶B1. 7 Tr. 9:18–20. 8 Tr. 9:5–8; Tr. 10:4–11:5; JX 32, Ex. A; see also D.I. 82 at 6 (“The GWA Property is outside the established corporate limits of the City and is, instead, in unincorporated New Castle County.”). 9 D.I. 82 at 7.
2 Wilmington, located to the east of both the GWA Property and West 37 th Street.10
RHR acquired the RHR Property in May 2019 with the intention of building multi-
family apartments.11
West 37th Street (hereinafter, “W. 37th St.”), is a finished roadway on the
GWA Property, connecting Franklin Place with Miller Road.12 It is a twenty-six foot
wide road that runs the length of the parcel owned by GWA, and it is identified as a
public right of way dedicated by GWA in a subdivision plan recorded in 1989.13
Along W. 37th St. sits a 10-foot construction easement on either side, that was
expressly dedicated in the GWA recorded subdivision plan and appears on
subsequent plans of the property.14 There is conflicting testimony on the purpose of
the construction easement with the GWA stating and providing support that it is to
provide the State space for storage of materials and access to W. 37th St. when it is
providing maintenance to the road,15 and the Defendants offering supporting
10 Tr. 41:8–11. 11 D.I. 82 at ¶B7. 12 Tr. 10:12–17; Tr. 11:7–15; JX 32, Ex. A; D.I. 82 at ¶B3; JX 94. 13 Tr. 10:4–22; Tr. 11:7–15; JX 32, Ex. A; D.I. 82 at ¶B.3; JX 94; JX 126. 14 JX 104 at 3–4; JX 94; JX 96; JX 97; JX 98. 15 Tr. 216:4–23.
3 evidence and testimony that it is a permanent construction easement that gives the
State the right to construct a sidewalk.16
GWA claims to own this right-of-way and exhibits its ownership of the street
through maintenance.17 Yet GWA cannot recall specific instances of maintaining,
paving, or fixing potholes, and a contract for plowing and shoveling displays that
such services do not extend to this roadway.18 DelDOT does not claim to have
maintenance rights over W. 37th St..19 The street is a private road that has been
dedicated to public use, meaning it can be used by the public and cannot be closed
off to the public.20
B. The Declaration of Voluntary Assurances
In January 2019, before RHR purchased the RHR Property, the former Mayor
of the City of Wilmington, Michael Purzycki contacted Mr. David Rosen, the
executive vice president of Rosen Associate Management Corp. and agent for
16 Donlon Dep. Tr. 104:13–24 (indicating uncertainty as to what type of construction easement was present here but that “currently DelDOT asked for a permanent easement on most jobs that run adjacent to rights-of-way for them to construct sidewalks or pedestrian paths[.]”); Rudy Dep. Tr. 112:14–17 (“Q. Okay. So fair to say that DelDOT is the one who has rights under the permanent construction easement? A. Yes.”). 17 Tr. 52:15–18; see Tr. 53:14–54:7 (referencing JX 119 at 3, No. 5). 18 Tr. 58:10–19; JX. 59 (showing that the snowplow vendor does not shovel or plow on W. 37th St. right-of-way). 19 Tr. 202:23–203:7; JX 104 at 4–5; Hastings Dep. Tr. 71:3–72:9. 20 Hastings Dep. Tr. 28:16–30:4; D.I. 82 at ¶B3; see also JX 63.
4 GWA.21 In doing so, the mayor discussed the possibility of RHR’s planned 165-
unit, three-building, upscale market-rate housing project, scheduled to begin within
the next six months.22 The mayor also specifically mentioned that he wanted to
explore the possibility of an easement over a portion of the GWA Property to have
a secondary entrance to the proposed development site.23 Mr. Rosen believed that
this would benefit the shopping center and tenants by increasing the flow of potential
customers.24 On January 15, 2019, Mr. Rosen received a subsequent letter from the
mayor, with the City of Wilmington letterhead, memorializing the verbal discussions
and urging the importance of the easement over GWA’s property to the City.25 The
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
G-WILMINGTON ASSOCIATES, ) ) Plaintiff, ) ) v. ) C.A. No. 2024-0090-LM ) RIVERSIDE HOSPITAL ) REDEVELOPMENT, LLC, ) LANDON CONSTRUCTION, LC, ) CONSTRUCTION DELAWARE, INC., ) and the CITY OF WILMINGTON, ) ) Defendants. )
POST-TRIAL FINAL REPORT
Final Report: October 31, 2025 Date Submitted: June 9, 2025
Christopher P. Simon, David G. Holmes, CROSS & SIMON, LLC, Wilmington, DE; Counsel for Plaintiff G-Wilmington Associates.
Stephen A. Spence, Sean A. Meluney, MELUNEY ALLEMAN & SPENCE, LLC, Wilmington, DE; Counsel for Defendant Riverside Hospital Redevelopment, LLC and LC Construction Delaware, Inc.
William E. Gamgort and Carmella Cinaglia, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, DE; Counsel for Defendant City of Wilmington.
Mitchell, M. This matter comes before the Court on a dispute arising out of an easement
agreement that allowed a right of access on property owned by the plaintiff, the
owner of a shopping center. The plaintiff brings this action against three defendants,
a neighboring housing developer, a construction company, and the City of
Wilmington, alleging a breach of agreement, trespass, and related claims stemming
from the alleged unauthorized extension of an easement across the plaintiff’s
property. The plaintiff contends that the defendants exceeded the scope of the
easement as agreed and thereby encroached upon and trespassed onto the plaintiff’s
property. For reasons explained in greater detail below, I find there is a breach of the
easement agreement and trespass onto the Plaintiff’s property, however I do not find
it appropriate to terminate the agreement and order the removal of the sidewalk.
I. BACKGROUND1
Plaintiff, G-Wilmington Associates (hereinafter, “GWA”) is the owner of the
Miller Road Commons shopping center (hereinafter, the “GWA Property”).2 LC
Construction (hereinafter, “LCC”) and Riverside Housing Redevelopment
(collectively, “Defendants”) are companies with their principal place of business in
1 The facts in this report reflect my findings based on the record developed at trial. I grant the evidence the weight and credibility I find it deserves. Citations to the transcript will be in the form of “Tr. __.” Citations to the Docket are cited in the form of “D.I. __”. Deposition transcripts are cited as “[Last Name] Dep. Tr.__.” The parties submitted joint exhibits numbered 1-138. Citations to the joint exhibits are in the form of “JX__.” 2 Tr. 7:20–24; D.I. 82 at ¶B1; JX 97. Delaware.3 In May 2019, Defendant, Riverside Housing Redevelopment
(hereinafter, “RHR”) purchased a 4.6-acre parcel adjacent to the GWA Property
(hereinafter, the “RHR Property”).4 The City of Wilmington (hereinafter, the “City”)
assisted in orchestrating the purchase of the RHR Property and is the third defendant
here.5
A. The Properties
The 17.5-acre GWA Property, located at 3600 Miller Road in New Castle
County, Wilmington, Delaware, contains approximately eight or nine stores
comprised of about 165,000 square feet of rentable space.6 GWA asserts they
acquired this Property in 1980.7 The shopping center, as it stands today, is located
between Miller Road to the north, Franklin Place to the south, and West 37th Street
to the east side of the property, outside the boundaries of the City.8
The RHR Property is located at 710 Lea Boulevard, Wilmington, Delaware.9
Unlike the GWA Property, the RHR Property is within the boundaries of the City of
3 D.I. 82 at 6. 4 Tr. 308:15–16; D.I. 82 at ¶B8. 5 D.I. 82 at ¶A4. 6 Tr. 15:3–10; D.I. 82 at ¶B1. 7 Tr. 9:18–20. 8 Tr. 9:5–8; Tr. 10:4–11:5; JX 32, Ex. A; see also D.I. 82 at 6 (“The GWA Property is outside the established corporate limits of the City and is, instead, in unincorporated New Castle County.”). 9 D.I. 82 at 7.
2 Wilmington, located to the east of both the GWA Property and West 37 th Street.10
RHR acquired the RHR Property in May 2019 with the intention of building multi-
family apartments.11
West 37th Street (hereinafter, “W. 37th St.”), is a finished roadway on the
GWA Property, connecting Franklin Place with Miller Road.12 It is a twenty-six foot
wide road that runs the length of the parcel owned by GWA, and it is identified as a
public right of way dedicated by GWA in a subdivision plan recorded in 1989.13
Along W. 37th St. sits a 10-foot construction easement on either side, that was
expressly dedicated in the GWA recorded subdivision plan and appears on
subsequent plans of the property.14 There is conflicting testimony on the purpose of
the construction easement with the GWA stating and providing support that it is to
provide the State space for storage of materials and access to W. 37th St. when it is
providing maintenance to the road,15 and the Defendants offering supporting
10 Tr. 41:8–11. 11 D.I. 82 at ¶B7. 12 Tr. 10:12–17; Tr. 11:7–15; JX 32, Ex. A; D.I. 82 at ¶B3; JX 94. 13 Tr. 10:4–22; Tr. 11:7–15; JX 32, Ex. A; D.I. 82 at ¶B.3; JX 94; JX 126. 14 JX 104 at 3–4; JX 94; JX 96; JX 97; JX 98. 15 Tr. 216:4–23.
3 evidence and testimony that it is a permanent construction easement that gives the
State the right to construct a sidewalk.16
GWA claims to own this right-of-way and exhibits its ownership of the street
through maintenance.17 Yet GWA cannot recall specific instances of maintaining,
paving, or fixing potholes, and a contract for plowing and shoveling displays that
such services do not extend to this roadway.18 DelDOT does not claim to have
maintenance rights over W. 37th St..19 The street is a private road that has been
dedicated to public use, meaning it can be used by the public and cannot be closed
off to the public.20
B. The Declaration of Voluntary Assurances
In January 2019, before RHR purchased the RHR Property, the former Mayor
of the City of Wilmington, Michael Purzycki contacted Mr. David Rosen, the
executive vice president of Rosen Associate Management Corp. and agent for
16 Donlon Dep. Tr. 104:13–24 (indicating uncertainty as to what type of construction easement was present here but that “currently DelDOT asked for a permanent easement on most jobs that run adjacent to rights-of-way for them to construct sidewalks or pedestrian paths[.]”); Rudy Dep. Tr. 112:14–17 (“Q. Okay. So fair to say that DelDOT is the one who has rights under the permanent construction easement? A. Yes.”). 17 Tr. 52:15–18; see Tr. 53:14–54:7 (referencing JX 119 at 3, No. 5). 18 Tr. 58:10–19; JX. 59 (showing that the snowplow vendor does not shovel or plow on W. 37th St. right-of-way). 19 Tr. 202:23–203:7; JX 104 at 4–5; Hastings Dep. Tr. 71:3–72:9. 20 Hastings Dep. Tr. 28:16–30:4; D.I. 82 at ¶B3; see also JX 63.
4 GWA.21 In doing so, the mayor discussed the possibility of RHR’s planned 165-
unit, three-building, upscale market-rate housing project, scheduled to begin within
the next six months.22 The mayor also specifically mentioned that he wanted to
explore the possibility of an easement over a portion of the GWA Property to have
a secondary entrance to the proposed development site.23 Mr. Rosen believed that
this would benefit the shopping center and tenants by increasing the flow of potential
customers.24 On January 15, 2019, Mr. Rosen received a subsequent letter from the
mayor, with the City of Wilmington letterhead, memorializing the verbal discussions
and urging the importance of the easement over GWA’s property to the City.25 The
mayor emailed GWA on February 19, 2019, which included renderings of RHR’s
proposed housing project.26 The renderings consisted of a schematic showing three
buildings with two entrances, a parking lot, and a swimming pool.27
During this time, the mayor also facilitated a negotiation with RHR and
Brandywine Hills Community Association (hereinafter, “BHCA”), a neighborhood
within the City boundaries and next door to the two properties, who expressed
21 Tr. 12:14–21. 22 Tr. 13:1–11. 23 Tr. 14:3–9. 24 Tr. 14:17–24. 25 Tr. 16:1–16; JX 5. 26 Tr. 17:12–18:11; JX 11. 27 Tr. 17:12–18:11; JX 11.
5 concern with the proposed new construction of multi-family apartments on the RHR
Property.28 When RHR purchased its property in 2019, it was not zoned for multi-
family housing but zoned as R-2 residential, for single-family housing.29 To obtain
the necessary rezoning for the construction of the multi-family housing on RHR’s
Property, on May 3, 2019, RHR entered into the Declaration of Voluntary
Assurances (hereinafter, the “DVA”) with the City and BHCA.30 The DVA was
signed by Louis J. Capano III, CEO of Capano the parent company of RHR and
recorded on May 6, 2019.31 The BHCA required, through the execution of the DVA,
the construction of new sidewalk on the GWA Property along W. 37th St. and the
construction of a secondary access point to the RHR Property onto W. 37th St..32
GWA is not a party to the DVA.33 Nonetheless, the mayor’s assistant emailed
Mr. Rosen a draft of the DVA before its execution on March 25, 2019.34 The draft
sent to Mr. Rosen is identical to the final executed DVA with the only difference
being the dates at the top of the document.35
28 JX 23; JX 24; see JX 25; Tr. 309:14–310:16; Tr. 311:21–313:7. 29 JX 19 at 1; Tr. 466:11–19. 30 Tr. 471:20–472:5; JX 25. 31 Capano Dep. Tr. 6:20–7:6; Capano Dep. Tr. 9:8–21; D.I. 82 at ¶B8. 32 JX 25 at §2(a)–(b), (d); see JX 9. 33 Tr. 135:24–136:6; see JX 25. 34 JX 22; Tr. 96:4–99:17. 35 JX 22; JX 25; Tr. 314:4–7.
6 C. The Easement Agreement
On April 22, 2020, GWA and RHR entered into the Easement Agreement.36
The City is not a signatory to the Easement Agreement.37 The easement is
approximately ten feet wide and one hundred and ten feet long running along the
east side of W. 37th St..38 The easement, like the GWA Property, lies within
unincorporated New Castle County and outside the boundaries of the City.39
GWA and RHR agreed that RHR would pay $25,000 as partial consideration
for the granting of the easement and then thereafter the RHR parcel owner would
pay $2,000 per month, increasing on a compounding basis by 12% every five years,
for as long as the Easement Agreement remained in place.40 RHR has made all
required payments under the Easement Agreement, even those required of it
throughout the span of this litigation.41 GWA believes the agreement was only for
building the secondary vehicular access between the two properties, while RHR
36 D.I. 82 at ¶B11; JX 32 at 1. 37 D.I. 82 at ¶B11; JX 32 at 1. 38 D.I. 82 at ¶B12; JX 32, Ex. B; Tr. 22:4–17. 39 Tr. 9:23–10:3; Tr. 41:8–11. 40 JX 32 at §3. 41 Tr. 55:1–6.
7 entered the agreement to facilitate the construction projects described in the DVA,
which include a sidewalk running along W. 37th St..42
The Easement Agreement permits RHR to use GWA’s Property as a means
of secondary vehicular access to the RHR Property.43 The Easement Agreement, in
Section 2.1, provides for an easement “for the purpose of facilitating pedestrian and
vehicular access, ingress, egress, and regress in, on, to, from, upon, under, across,
over, and through that portion of [the Easement Area.]”44 Section 2.2 of the
Easement Agreement states that “[t]he RHR Parcel Owner shall have the right, at its
sole cost and expense, to install, construct, use, connect, maintain, repair, and replace
such improvements on the Easement Area . . . as are necessary to connect the RHR
Parcel to the public right of way identified as 37th Street on the RHR Plan, and/ or
as desirable to the RHR Parcel Owner for the use of the Permanent Easement;
provided” they abide by further requirements therein.45
RHR, under the agreement, is to obtain “all certificates, approvals, permits,
licenses and other consents respecting the Easement Area that are required by any
42 D.I. 93 at 4 (“[I]nstalling approximately 875 feet of sidewalk and curbing on GWA’s property, [] was i) not permitted by the Agreement[.]”); JX 101 at 14 (“The Agreement was intended to provide a curb cut for secondary egress to RHR’s property, but such access did not give anyone the right to build a sidewalk the entire length of 37th Street[.]”); Tr. 488:13– 20; Tr. 488:24–489:22. 43 Tr. 25:23–26:5; Tr. 488:13–20; see also JX 32. 44 JX 32 at §2.1. 45 JX 32 at §2.2.
8 local, county, state or federal agencies or other authorities having jurisdiction over
the Easement Area and/or [the GWA Property,]” and must also procure and maintain
insurance for the duration of the agreement “in amounts and coverages reasonably
required by [GWA.]”46 RHR agreed to provide all plans and specifications for the
installation and maintenance of the easement to GWA for its approval before the
start of construction.47 The Easement Agreement requires that construction is to be
completed within 36 months of the execution of the agreement, and if the
construction was not completed within the 36-month period GWA was granted the
right to terminate the agreement.48
D. The Assignment
While pleased that the DVA and Easement Agreement contained
commitments from RHR to construct and install the secondary access from W. 37th
St. and sidewalk along W. 37th St., the BHCA was now concerned that RHR might
not follow through with such commitments, jeopardizing the future of the secondary
access point and sidewalk.49 On November 14, 2020, a representative of BHCA
emailed the former deputy chief of staff of Mayor Purzycki’s administration, John
Rago, expressing concern over the security of the Easement Agreement due to the
46 JX 32 at §2.5; JX 32 at §15.1. 47 JX 32 at §2.4. 48 Tr. 489:23–490:6; JX 32 at §6. 49 Goff Dep. Tr. 62:3–13.
9 monthly payment requirement.50 RHR spoke with its attorneys contemplating a
resolution that would recognize the easement formally, however RHR never went
forward with getting the resolution approved by the City council.51 A series of
communications took place between December 6, 2020 and December 8, 2020
between Mayor Purzyki and Martha Carper, wife of former senator of Delaware and
resident of BHCA, regarding a draft of a partial assignment of the Easement
Agreement to the City.52
On December 10, 2020, RHR entered into an assignment agreement
(hereinafter, the “Assignment”) with the City regarding the Easement Agreement for
the GWA Property, despite GWA not being a party to this agreement.53 The
Assignment is signed by the mayor and Mr. Capano III, as representative for RHR.54
GWA was unaware of the Assignment at the time of its execution and was not
informed of its existence until discovery for the present litigation.55
The agreement grants the City the right to pay expenses due to GWA, to cure
any breach of the easement, and to construct or install improvements on the
50 JX 34; Tr. 495:20–496:16; Tr. 497:2–16. 51 Tr. 501:4–20; JX 35. 52 JX 38; Tr. 504:5–505:13. 53 D.I. 82 at ¶¶13–14; JX 41; Tr. 117:4–118:17. 54 JX 41; Tr. 506:3–10. 55 Tr. 117:8–14.
10 easement.56 The Assignment also provides that “[i]n the event [RHR] fails to make
or deliver any payments” or “fails to cure any breach of the Easement following
written notice of such breach from GWA,” then the City has “the right to make or
deliver such payments” and “cure any such breach[.]”57 The City is also assigned
“the right to construct and install the Easement Area Improvements pursuant to
Section 2 of the Easement[,]” in the even that RHR “fails to complete the
construction and installation of the Easement Area Improvements within thirty-six
(36) months from the date of the Easement as required pursuant to Section 6 of the
Easement[.]”58
E. The Construction of the Entrance and the Sidewalk
The facts in relation to the construction in this case have, by in large, been
stipulated to.59 Landon Construction, a subcontractor for LCC, constructed and
installed the entrance, curbing, sidewalks, and ramps within the GWA Property,
completing their work no later than June 5, 2022.60 The entrance connects the RHR
Property to the GWA Property, crossing over the 10 foot construction easement,
56 JX 41 at §§1.1–1.3. 57 JX 41 at §§2.1.1–2.1.2; Tr. 507:3–8. 58 JX 41 at §2.1.3. 59 See D.I. 82 at ¶¶B16–23. 60 D.I. 82 at ¶¶B16–17.
11 onto the easement area, and then encroaching onto the 26-foot-right of way.61 No
permits were obtained from New Castle County, DelDOT, or the City for any of the
aforementioned construction within the GWA Property.62 RHR did have the curbs
inspected by Geo Technology Associates, who reported that the subgrade was
acceptable to place the curbs.63 GWA has not contracted with any of the parties here
regarding the installation of the sidewalk and curbing outside the easement area
along W. 37th St. and GWA was not contacted, before the installation of the
sidewalks and curbing to expressly state that the sidewalks and curbing would be
installed.64
GWA asserts that the sidewalk as constructed runs parallel to RHR’s property
on W. 37th St. and does not actually provide a path for access onto RHR’s Property.65
There are portions of the constructed sidewalk not built within the designated
easement area.66 On December 30, 2022, January 12, 2023, and April 27, 2023,
former counsel for GWA sent letters to RHR providing notice of RHR’s breaches of
61 Tr. 217:5–20. 62 D.I. 82 at ¶B18; Tr. 325:19–327:1 (referencing JX 22, Ex. B); Tr. 424:19–425:15 (referencing JX 44). 63 Tr. 327:2–328:8 (referencing JX 46). 64 D.I. 82 at ¶¶B20–21. 65 D.I. 101 at 14; JX 101. 66 Tr. 287:10–22; Tr. 354:16–355:12; Tr. 422:24–423:23 (referencing to JX 29); Tr. 426:12–427:2 (referencing JX 44); see also JX 101.
12 the Easement Agreement, by constructing hundreds of feet of sidewalks on the
“Shopping Center Parcel outside of the easement Area, without the consent of GWA
and, on information and belief, without having obtained the proper permits or
government approvals.”67 GWA demanded that RHR cure those breaches.68
In a June 2023 letter from GWA’s former counsel, GWA provided RHR of a
notice of termination of the Easement Agreement between RHR and GWA and
demanded damages because of the sidewalk outside the easement and easement
entrance’s construction without the proper permits and approvals.69
F. The Maintenance Agreement
In a January 2023 letter, former counsel for GWA advised RHR that after
checking with the City of Wilmington and DelDOT, DelDOT confirmed that it lacks
jurisdiction over W. 37th St., advising GWA to turn to RHR for more information.70
The letter further states that although the sidewalks were not constructed by RHR,
but rather by Landon Construction at the direction of LC Construction, RHR cannot
avoid its responsibility by simply delegating or subcontracting its works to affiliates
67 Tr. 87:1–11; JX 52; JX 53; JX 62. 68 Tr. 84:11–14; JX 52. 69 Tr. 90:12–21; JX 62. 70 Tr. 88:12–24; JX 53.
13 or third parties.71 LC Construction is an affiliate of Capano Management, and
performed the work at the direction of RHR and/or Capano Management.72
In May 2023, the City and DelDOT discussed the possibility of the City being
delegated maintenance responsibility over W. 37th St. and be assigned “jurisdictional
authority over the same area.”73 On December 21, 2023, the City and DelDOT
entered an agreement (hereinafter, “Maintenance Agreement”).74 The City claims
through this agreement and through the 10-foot construction easement running
parallel to W. 37th St., they have taken on the municipal authority and control over
improvements on the W. 37th St. Right of way.75 The Maintenance Agreement
provides for the authorization of the City to maintain and improve W. 37 th St..76 The
Maintenance Agreement may be terminated within “30 days following written notice
by either party to the other party of an intent to terminate[.]”77
71 Tr. 89:1–10; JX 53. 72 Tr. 89:1–6. 73 JX 63. 74 D.I. 82 at ¶B27; JX 82; JX 83. 75 D.I. 97 at 49. 76 JX 83 at §§1–3. 77 JX 83 at §4. (The City sent GWA a letter, at some point, informing them that the sidewalk next to W. 37th St. “is part of the City of Wilmington Right of Way and cannot be removed,” and is to be “maintained by GWA[,]” however it is unclear whether this letter was sent before or after the execution of the Maintenance Agreement.); JX 108; Tr. 40:20– 41:15; Tr. 621:24–622:14.
14 G. Procedural Posture
On February 1, 2024, GWA filing its verified complaint against the three
named defendants.78 The complaint asserts four claims: breach of agreement, quiet
title, injunctive relief, and trespass.79 On March 21, 2024, RHR and LC Construction
jointly filed their answer, denying all allegations and asserting counterclaims for
declaratory judgment.80 That same day, defendant City of Wilmington filed its
answer, raising multiple affirmative defenses, including failure to state a claim, the
doctrine of laches, estoppel, acquiescence, ratification, and waiver.81 GWA
answered the counterclaims on April 17, 2024.82
On January 9, 2025, about a month before trial, the City of Wilmington
requested permission to move for summary judgment and a stay of trial.83 GWA
urged the Court to proceed to trial without delay, arguing that summary judgment
proceedings would unnecessarily prolong the case.84 A teleconference regarding the
City of Wilmington’s motion for leave to file for summary judgment was held on
78 D.I. 1; see D.I. 82 at ¶I10 (Landon Construction was included as a defendant, but the plaintiff was not able locate a registered agent to effectuate service and eventually learned that Landon Construction no longer operates or exists.). 79 D.I. 1. 80 D.I. 10. 81 D.I. 11. 82 D.I. 16. 83 D.I. 64. 84 D.I. 69.
15 January 21, 2025 at which the Court denied the motion for leave to move for
summary judgment.85
The originally scheduled two-day trial was held on February 11, 2025 and
February 12, 2025.86 It was determined that a third day for the trial was necessary,
and the final trial day was held on February 28, 2025.87 Post trial briefing was
completed on June 9, 2025, and I took this matter under advisement.88
II. ANALYSIS
“An easement is a non-possessory interest in real property, granted for a
particular purpose, enforceable of right and not depend[e]nt for its continued
existence on the will of the grantor.”89 “An express easement is created if the
document ‘contains plain and direct language evidencing the grantor’s intent to
create a right in the nature of the easement.’”90 “Documents conveying an interest in
85 D.I. 73. 86 D.I. 88. 87 D.I. 85; .D.I. 88; D.I. 89. 88 D.I. 93; D.I. 95; D.I. 97; D.I. 101. 89 Coker v. Walker, 2013 WL 1858098, at *3 (Del. Ch. May 3, 2013). 90 Reybold Venture Gp. IX, LLC v. Summit Plaza Shopping Ctr., LLC, 2025 WL 658760, at *9 (Del. Ch. Feb. 18, 2025) (ORDER) (quoting Black v. Staffieri, 2014 WL 814122, at *2 (Del. Feb. 27, 2014)).
16 land ‘are specialized forms of contract, and like other contracts are not subject to
construction unless the language is ambiguous.’”91
A. RHR is in breach of the Easement Agreement.
A plaintiff pleading breach of contract must prove by a preponderance of the
evidence: “(1) the existence of a contract, (2) the breach of a contractual obligation,
and (3) resulting damages.”92 “The Agreement is the appropriate starting point for
determining the rights and duties of the parties.”93 “When determining the scope of
a contractual obligation and measuring the parties conduct against that obligation to
determine breach, ‘the role of a court is to effectuate the parties’ intent.’”94 “When
interpreting a contract, this Court will give priority to the parties’ intentions as
reflected in the four corners of the agreement, construing the agreement as whole
and giving effect to all its provisions.”95
91 Buckeye P’rs, L.P. v. GT USA Wilm., LLC, 2022 WL 906521, at *30 (Del. Ch. Mar. 29, 2022) (quoting Jestice v. Buchanan, 1999 WL 962591, at *2 (Del. Ch. June 14, 1999)). 92 Anschutz Corp. v. Brown Robin Cap., LLC, 2020 WL 3096744, at *9 (Del. Ch. June 11, 2020) (citing Pharm. Prod. Dev., Inc. v. TVM Life Sci. Ventures VI, L.P., 2011 WL 549163, at *2 (Del. Ch. Feb. 16, 2011)). 93 Georgetown Crossing LLC, v. Ruhl, 2006 WL 3720134, at *6 (Del. Ch. Dec. 5, 2006). 94 In re Anthem-Cigna Merger Litig., 2020 WL 5106556, at *90 (Del. Ch. Aug. 31, 2020) (quoting Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006)). 95 N. Am. Leasing, Inc. v. NASDI Hldgs., LLC, 276 A.3d 463, 467 (Del. 2022); see also Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012) (“Unless there is ambiguity, Delaware courts interpret contract terms according to their plain, ordinary meaning.”).
17 If the document conveying an interest in land is ambiguous the Court will look
to grantor’s intent “in the light of the intent of the parties as determined by the facts
and circumstances surrounding the transaction,” otherwise known as extrinsic
evidence.96 “The contract’s construction should be that which would be understood
by an objective reasonable third party” and “[a]bsent some ambiguity, Delaware
courts will not destroy or twist contract language under the guise of construing it.”97
The parties here do not dispute formation of either the Easement Agreement
or the partial assignment agreements that the Plaintiff brings its breach of contract
claims under.98 The question left for the Court is therefore one of interpretation of
the language within the documents and whether the defendants failed to perform
their obligations. In this section, I address the Plaintiff’s claims for breach under
sections 2.1, 2.2, 2.4, 2.5, and 15.1, and I save my analysis of the claim for breach
of section 6 for the portion of my analysis that addresses the Plaintiff’s termination
rights under the agreement.
96 Buckeye P’rs, L.P., 2022 WL 906521, at *30 (citing Francis v. Macklin, 1990 WL 100799, at *2 (Del. Ch. July 19, 1990). 97 Thermo Fisher Sci. PSG Corp. v. Arranto Bio MA, LLC, 2023 WL 2771509, at *17 (Del. Ch. Apr. 4, 2023) (internal quotation marks omitted). 98 See D.I. 82 at ¶¶11–13.
18 1. The construction of the sidewalk was within the scope of use granted through the Easement Agreement, however RHR has breached sections 2.1, 2.2, 2.4, 2.5, and 15.1.
GWA insists that the Easement Agreement did not provide for the
construction of sidewalks running the entire length of W. 37 th St..99 The plain
language of the Easement Agreement provides for the construction of sidewalks
when it specifies its use for the ingress and egress of pedestrians.100 I find this
language to be unambiguous considering the Easement Agreement also grants RHR
the express right to construct improvements onto the easement area.101
Even if this Court were to look to extrinsic evidence to aid in the interpretation
of the parties’ intent for the scope of use of the granted easement, the facts and
circumstance surrounding the execution of the Easement Agreement imply that a
sidewalk was within its scope. GWA received a copy of the DVA which placed them
on notice of RHR’s intention of building the sidewalks to satisfy the needs of
BHCA.102 RHR entered into the Easement Agreement to construct the necessary
items that were demanded in the DVA, including an access point “for the purpose of
99 D.I. 93 at 4; JX 101 at 14. 100 JX 32 at §2.1. 101 JX 32 at §2.2 (“The RHR Parcel Owner shall have the right, at its sole cost and expense, to install, construct, use, connect, maintain, repair, and replace such improvements on the Easement Area . . . as are necessary to connect the RHR Parcel to the public right of way identified as ‘37th Street’ on the RHR Plan[.]”). 102 JX 22; JX 25; Tr. 314:4–7.
19 facilitating pedestrian and vehicular access” which includes the construction of a
sidewalk.103 The construction of the sidewalks in addition to the second entryway
does not constitute a breach because sidewalks were contemplated within the
Easement Agreement.
Section 2.1 of the Easement Agreement, read with the physical description of
the easement area outlined in the exhibits to the agreement, indicates that RHR was
only permitted to construct the sidewalk within the easement area. 104 The sidewalk
was constructed outside the designated easement area and onto GWA Property in
multiple sections, in breach of the Easement Agreement.105
RHR agreed to abide by section 2.2 of the Easement Agreement which grants
RHR the right to construct improvements on the easement provided “all work in
connection with the easement area be done . . . in accordance with all applicable
laws, regulations, and standards[.]”106 Section 2.5 also states that RHR is “liable to
the Shopping Center Parcel to obtain and continuously maintain, at its sole cost and
expense, all certificates, approvals, permits, licenses and other consent respecting
103 Tr. 488:13–20; Tr. 489:2–22. 104 JX 32 at §2.1; JX 32, Ex. A–C. 105 Tr. 287:10–22; Tr. 354:16–355:12; Tr. 422:24–423:23 (referencing JX 29); Tr. 426:12– 427:2 (referencing JX 44); see also JX 101. 106 JX 32 at §2.2.
20 the Easement Area that are required[.]”107 The Defendants did not obtain the
appropriate certificates, approvals, permits, licenses, or other consent respecting the
construction of the side walk, which contravenes its responsibilities under sections
2.2 and 2.5.108 The Defendants claim that they sought to get the necessary paper
work for construction but no government agency would review the plans but
provided insufficient evidence to prove this as fact while GWA provided testimony
that revealed that an entrance permit was necessary.109 RHR therefore breaches
sections 2.2 and 2.5 of the Easement Agreement for failing to fulfill the necessary
permitting and legal requirements in the construction on GWA’s property.
RHR agreed in section 2.4 of the Easement Agreement that “prior to any entry
upon the Easement Area . . . and prior to any work being performed . . . RHR shall
provide to GWA . . . plans and specification for the Easement Area Improvements
and RHR’s plans for the installation and maintenance thereof, for GWA’s prior
107 .JX 32 at §2.5. 108 D.I. 82 at ¶B18; Tr. 325:19–327:1 (referencing JX 22, Ex. B); Tr. 424:19–425:15 (referencing JX 44); see also D.I. 10 at ¶25 (“it is admitted only that Defendants had the sidewalk and curbing installed without a performance or payment bond, without permits, and without general liability insurance naming GWA as an additional insured[.]”). 109 D.I. 95 at 18–19; JX 104 at 10; Tr.190:4–12 (“I believe DelDOT might have treated this as a commercial entrance permit, even though you were coming from a private parcel to another private parcel, but you’re interacting with this corridor that has been designated for access. So, it’s conceivable that DelDOT might have required a commercial entrance permit for that.”).
21 approval[.]”110 RHR, in violation of this provision, did not provide GWA with the
required documents, or seek GWA’s approval, before the construction of the
improvements on the easement area.111 Section 15.1 of the Easement Agreement
requires that RHR procure and maintain insurance for the duration of the
agreement.112 RHR did not originally obtain the insurance required under section
15.1 of the Easement Agreement.113
In sum, RHR breached the Easement Agreement for constructing the
sidewalks outside the easement area, not requesting GWA’s approval before the start
of the construction, and not getting the necessary insurance or documentation to
begin construction.
2. RHR is no longer able to cure because its’ reasonable opportunity to do so has passed.
Under section 7 of the Easement Agreement breaching parties are entitled to
the reasonable opportunity to cure a breach after written notice was given to them of
the breach.114 Section 7 also provides, “[i]n the event of uncured breach of this
110 JX 32 at §2.4. 111 D.I. 82 at ¶B21 (“After the execution of the Easement Agreement, neither RHR, LCC, nor the City contacted GWA prior to the installation of the sidewalks and curbing to expressly state that the sidewalks and curbing were going to be installed.”); Tr. 29:3–18. 112 JX 32 at §15.1. 113 Tr. 342:7–20; D.I. 10 at ¶25 (“it is admitted only that Defendants had the sidewalk and curbing installed . . . without general liability insurance naming GWA as an additional insured[.]”). 114 JX 32 at §7.
22 Agreement by the RHR Parcel Owner, it is expressly acknowledged and agreed that,
given the subject matter and consideration involved hereunder [GWA] shall be
entitled to all remedies available at law or in equity[.]”115 The plain language of this
provision shows that GWA is entitled to broad legal and equitable remedies if a
breach of the agreement is not cured within a reasonable amount of time after notice
has been given.116 On December 23, 2022, GWA sent a letter to RHR informing
them of their breach of sections 2.1 and 2.5 and requesting RHR cure the breach
within 30 days through the immediate removal of all sidewalks and other
improvements improperly installed.117 GWA gave notice of all of the breaches to the
Easement Agreement on April 27, 2023 in a letter labeled “Notice of Termination”
informing the Defendants that unless they comply with the requests of the letter
within 7 days they would “seek any other remedy to which GWA is entitled under
the Agreement.”118
The notice of breach in December 2022 for sections 2.1 and 2.5 and the notice
sent in April 2023, the latter of which came almost a full 10 months before GWA
filing the complaint that began this action, provided RHR with sufficient notice and
115 JX 32 at §7. 116 JX 32 at §7; see also Akorn, Inc. v. Fresenius Kabi AG, 2018 WL 4719347, at *81 (Del. Ch. Oct. 1, 2018) (interpreting an opportunity to cure provision in a contract based on the plain language of the provision). 117 JX 52. 118 JX 62.
23 a reasonable opportunity to cure any defective conduct in relation to the Easement
Agreement.119 RHR has not cured a breach pursuant to section 2.1 relating to the
sidewalk’s encroachment on GWA’s land and is thus in breach of this section of the
Agreement.120
RHR offers to retroactively cure its deficiencies under sections 2.2 and 2.5 of
the Easement Agreement by filing for the proper legal documentation required for
the construction it has performed on the property.121 RHR has had a reasonable
opportunity to perform this cure since being given notice 10 months before the start
of this litigation but did not do so.122 RHR has therefore breached sections 2.2 and
2.5.123
RHR claims to have cured its breach of section 2.4 when it provided GWA
with the plans for the easement area improvements in discovery for this matter.124
This is not sufficient to cure RHR’s breach as it cannot solve its deficiency in not
seeking GWA’s approval of the plans and permission to begin construction in the
119 JX 53; JX 62. 120 JX 32 at §2.1. 121 D.I. 95 at 20–21. 122 JX 62. 123 JX 32 at §§2.2, 2.5. 124 D.I. 95 at 18.
24 first place. Despite eventually providing the plans, RHR breached section 2.4 of the
Easement Agreement by not providing the plans in advance for GWA’s approval.125
RHR argues that GWA has not proven any damages in relation to the section
15.1 breach and RHR has since cured its breach on March 18, 2024, when RHR’s
Counsel sent GWA’s counsel a certificate of insurance dated March 13, 2024, after
the complaint was filed, naming GWA as an additional insured.126 GWA argues it
gave notice of all of the breaches to the Easement Agreement on April 27, 2023, yet
RHR did not make any attempt to cure this breach until almost a year later and after
litigation already commenced.127 This is outside the reasonable opportunity to cure
and therefore RHR had breached section 15.1.
B. The City is not liable to GWA for breach of contract.
The plain language of the assignment explicitly grants the City rights in
relation to the Easement Agreement and not obligations.128 There is no language
within the assignment that indicates the City is required to take any action to cure on
RHR’s behalf, and there was no evidence presented at trial that the City and RHR’s
intention when entering into the agreement was to place an obligation onto the
125 JX 32 at §2.4. 126 D.I. 95 at 18; JX 84. 127 JX 62 at 2–3. 128 JX 41.
25 City.129 The assignment states specifically that “[i]n the event that Assignee
exercises any of its rights under this Assignment, Assignee shall promptly provide
Notice to Assignor[,]” and also required RHR as the assignor to provide a
representation and warrantee that the City “has no obligation to GWA other than as
expressly set forth in the Easement[,]” indicating the non-obligatory nature of the
rights being afforded to the City.130 The Assignment agreement does not create any
kind of enforceable duty owed by the City, the only right it creates is that which is
in the hands of the City to be able to fulfill, not to be obligated to fulfill, certain
terms of the Easement Agreement on RHR’s behalf. So, despite the City’s heavy
involvement with the parties, execution of the Assignment, and insistence on
entrenching itself with property outside its boundaries, I do not find the City liable
to GWA under the Assignment agreement to cure RHR’s breaches of the Easement
Agreement.
C. GWA cannot terminate the Easement Agreement.
“A party is excused from performance under a contract if the other party is in
material breach thereof.”131 Conversely, “a slight breach by one party, while giving
rise to an action for damages, will not necessarily terminate the obligations of the
129 JX 41 at §§2.1.1–2.1.3 (using the language “shall have the right to”); see Tr. 507:3–20. 130 JX 41 at §§2.2.3, 3.2. 131 BioLife Sols., Inc. v. Endocare, Inc., 838 A.2d 268, 278 (Del. Ch. 2003).
26 injured party to perform under the contract.”132 In determining whether a breach is
material, the Court considers five factors:
(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking into account of all the circumstances including any reasonable assurances; [and] (e) the extent to which behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.133
The substantial compliance “standard is ‘necessarily imprecise and flexible’ and
must be ‘applied in the light of the facts of each case in such a way as to further the
purpose of securing for each party his expectation of an exchange of
performances.’”134
Here the Easement Agreement provides specifically for GWA to terminate the
agreement in the event of RHR’s breach of the allotted period for certain
construction.135 Section 6 of the Easement Agreement states:
RHR shall develop the RHR Parcel and construct improvements thereon in order to lease and manage upscale, market-rate multifamily
132 Murphy Marine Servs. of Del., Inc. v. GT USA Wilm., LLC, 2022 WL 4296495, at *15 (Del. Ch. Sept. 19, 2022) (quoting Level 4 Yoga, LLC v. CorePower Yoga, LLC, 2022 WL 601862, at *27 (Del. Ch. Mar. 1, 2022)). 133 LPPAS Representative, LLC v. ATH Hldg. Co., 2023 WL 3197819, at *16 (Del. Ch. May 2, 2023) (quoting Restatement (Second) of Contracts §§241(a)–(e)). 134 Id. (quoting Restatement (Second) of Contracts §241)). 135 JX 32 at §6.
27 housing and that the RHR Parcel shall continuously be used primarily for such purpose throughout the term of this Agreement. RHR further represents that the commencement of the work relating to the construction and installation of the Easement Area Improvement will be completed no later than thirty-six (36) months from the date of this Agreement. In the event that the Easement Area improvements are not completed within thirty-six (36) [months] from the date of this Agreement, the Shopping Center Parcel Owner shall have the right to terminate this Agreement as of the expiration of such 36-month period.136
That period required the construction on the easement to be completed by
April 22, 2023.137 The Parties argue whether completion of the construction includes
RHR receiving all necessary permitting and legal requirements in relation to the
construction and RHR completing its overall construction of the apartment
buildings, or if it simply requires the material completion of construction of the
improvements on the easement areas.138 I am moved towards the latter. In reading
the provision it specifically provides for the “construction of and installation of the
Easement Area Improvement,” which does not include any language about
appropriate paperwork, only the physical act of installation and construction, and
does not reference the preceding sentence in a way that indicates it implies the RHR
apartment construction must be completed in this time frame.139
136 Id. 137 Id. 138 D.I. 93 at 37; D.I. 95 at 9–12. 139 See JX 32 at §6.
28 The construction on the easement area, including the entrance, curbing,
sidewalks, and ramps, were completed no later than June 5, 2022, well within the
designated 36-month period.140 Although the parties dispute whether the
construction is completed because the topcoat still must be put on the relocated
entrance, testimony showed that the topcoat is traditionally added after all the
improvements are complete because construction vehicles could damage the final
product.141 Therefore, the lack of a topcoat does not change my assessment on
whether the construction was complete.
The construction required for the easement area is sufficiently completed such
that the lack of topcoat would not deprive GWA of the benefit, the additional access
point, it reasonably expected.142 If RHR fails to complete this construction in full
they are likely to be able to be compensated for the cost to complete it themselves if
they so choose, but it is also likely that RHR will cure this defect.143 RHR is likely
to take a loss on the construction if the Easement Agreement is completely
terminated, as it would no longer benefit from the sidewalk it paid to build and may
risk having to pay for its removal after it substantially completed its obligations for
140 JX 32 at §6; D.I. 82 at ¶B17. 141 Tr. 323:7–19; Tr. 388:22–389:13. 142 Restatement (Second) of Contracts §241(a); Tr. 447:14–448:1. 143 Restatement (Second) of Contracts §241(b), (d); Tr. 323:7–19; D.I. 95 at 10.
29 construction under the agreement.144 I therefore cannot find that the lack of topcoat
to be a material breach to completion of construction on the easement areas such that
it justifies the termination of the easement agreement.
As for the breaches of sections 2.1, 2.2, 2.4, 2.5, and 15.1, I do not find they
meet the muster necessary to justify termination. GWA does admittedly lose benefits
incurred from these clauses, including RHR’s responsibility for obtaining proper
documentations for construction, insurance policy, and zoning requirements.145
GWA also loses the benefit of being able to approve the construction plans and have
the sidewalk constructed in the designated easement area.146 These losses can be
properly remedied through monetary damages. RHR stands to lose far more if the
Easement Agreement is terminated by being forced to bear the cost of the
construction on the easement area that would no longer exist and would greatly affect
RHR’s development on the land it purchased.147 RHR has conducted itself in good
faith and has offered to cure in the areas it can, specifically in the documentation
required for the new structures it built on GWA’s property.148
144 Restatement (Second) of Contracts §241(c), (e). 145 JX 32 at §§2.1, 2.2, 2.5, and 15.1. 146 JX 32 at §2.4. 147 See JX 109 (quoting the cost of removal of the sidewalk at $27,000). 148 See D.I. 95 at 20.
30 I also find it necessary to note the primary purpose of the Easement
Agreement is to provide RHR with access onto GWA’s property and to create a
second entry point for pedestrian and vehicular access, and in consideration of that
RHR must pay $25,000 and then $2,000 monthly.149 RHR substantially completed
the improvements on the easement area and has not missed a single payment even
with the commencement of this litigation.150 Although RHR has breached multiple
terms of the Easement Agreement, I still do not find them to amount to a substantial
breach such that it would justify the termination of the Easement Agreement. I
therefore do not find any of RHR’s breaches to the agreement considered
individually or collectively to be substantial enough to justify GWA’s complete
termination of the Easement Agreement.151 Accordingly, GWA’s request for quiet
title is denied.
In short, the Plaintiff has not proven substantial breach of the Easement
Agreement such that they are able to terminate the contract. There is no cloud upon
their title, since they voluntarily entered the agreement, RHR continues to pay, and
149 JX 32 at §§2–3. 150 Tr. 55:1–6. 151 See DeMarie v. Neff, 2005 WL 89403, at *4 (Del. Ch. Jan 12, 2005) (quoting Saienni v. G & C Cap. Gp., Inc., 1997 WL 363919, at *3 (Del. Super. May 1, 1997)) (“Not all breaches will authorize the other party to abandon or refuse further performance. To justify termination, ‘it is necessary that the failure of performance on the part of the other go to the substance of the contract.’”).
31 they have no right to terminate based on these breaches to the agreement. GWA is
not entitled to their claim for quiet title.
D. The sidewalk constructed by RHR under the Easement Agreement did trespass onto the GWA Property.
“The elements of trespass, a strict liability offense, are as follows: (1) the
plaintiff must have lawful possession of the property; (2) the defendant must have
entered onto the plaintiff’s land without consent or privilege; and (3) the plaintiff
must show damages.”152 “Any unlawful entry upon another’s land constitutes a
trespass, and the law implies damages for such a trespass, but the amount depends
upon the damages actually done.”153 The Delaware Supreme Court adopts the
Restatement (Second) of Torts definition of possession as including someone who
“is in occupancy of land with intent to control it[.]”154
There are portions of the sidewalk that were constructed onto GWA’s land
outside both the easement area and the 26 foot right of way, and these portions do
constitute a continuing trespass.155 The issue this Court must address is whether the
152 Kuhns v. Bruce A. Hiler Del. QPRT, 2014 WL 1292860, at *19 (Del. Ch. Mar. 31, 2014) (quoting O’Bier v. JBS Const., LLC, 2012 WL 1495330, at *2 (Del. Super. Apr. 20, 2012). 153 Id. at *2. 154 State ex rel. Jennings v. Monsanto Co., 299 A.3d 372, 388 (Del. 2023) (quoting Restatement (Second) of Torts §157). 155 See Jagger v. Schiavello, 93 A.3d 656, 660–61 (Del. Super. 2014) (“As to continuing trespass, such a claim occurs when the defendant tortiously places or erects a structure or
32 constructed sidewalks on the 26 foot right of way identified here as W. 37th St. and
the 10-foot construction easement constitute a trespass. RHR argues that the
sidewalk that was built on these portions are not a trespass because the W. 37 th St. is
dedicated to public use, and the scope of the construction easement allows for the
construction of the sidewalk.156
W. 37th St. is a private road dedicated to public use, that has been dedicated
as such since the 1990s.157 W. 37th St. a 26-foot dedicated right of way, which at the
time of the sidewalk construction had not been accepted into state maintenance.158
The street despite not being accepted into the state maintenance system is “eligible
for improvements funded by the Community Transportation program” including the
construction of a sidewalk.159 DelDOT transferred to the City maintenance rights in
the Maintenance Agreement entered into in December 2023.160 Along W. 37th St.
other thing on the land of another person and constitutes a trespass for the entire length of time such thing is wrongfully on that land.”); JX 101, Ex. 10-B, C (indicating a portion of the sidewalk built onto the construction easement and then, at the southern end, a portion of the sidewalk build onto unencumbered GWA Property). 156 D.I. 95 at 22–28. 157 Hastings Dep. Tr. 29:2–13; see also Hastings Dep. Tr. 29:16–21 (“Dedicated to public use means that a private road can be used by the general public without the need to live there or own the property.”). 158 JX 104 at 4–5; D.I. 83 at 1; Tr. 202:23–203:7; Hastings Dep. Tr. 71:3–72:9. 159 2 Del. Admin. C. §2309-8.7.2; see also Hastings Dep. Tr. 85:23–86:11. 160 JX 83.
33 sits a construction easement, ten feet to either side of the road.161 A construction
easement sometimes only grants the state the ability to occupy the space with the
movement of equipment or the storage of materials when construction is occurring
on the road.162 A permanent construction easement will grant the State the right to
make improvements, such as construct a sidewalk.163
Notably both the right of way and the construction easement grant DelDOT
and/or the City a right of access to GWA’s property.164 However, RHR is not
DelDOT or the City, and although they seemingly have the City’s support in the
construction of the sidewalk, it does not change the fact that when they underwent
construction, they did so under private interests and not at the express direction of
the holder of the access rights to the right of way and the construction easement.
161 JX 104 at 3–4; JX 94; JX 96; JX 97; JX 98. 162 Rudy Dep. Tr. 103:10–105:13 (“It’s a construction easement which allows operation, movement of equipment, of material. I can occupy that space while I build that reduced area road or do what improvements I need to do in there.”) 163 Rudy Dep. Tr. 106:15; Donlon Dep. Tr. 104:13–24 (indicating uncertainty as to what type of construction easement was present here but that “currently DelDOT asked for a permanent easement on most jobs that run adjacent to rights-of-way for them to construct sidewalks or pedestrian paths[.]”). 164 Rudy Dep. Tr. 112:14–17 (“Q. Okay. So fair to say that DelDOT is the one who has rights under the permanent construction easement? A. Yes.”); Hastings Dep. Tr. 86:23– 87:7 (discussing DelDOT’s authority on the public right of way stating that “[t]hrough it being dedicated to public use, [DelDOT has] the authority to go on and do certain types of improvements and we’re not required to get that underlying property owner to agree to them. Typically, in a neighborhood the people want whatever it is we’re doing, but we don’t have that requirement.”).
34 Therefore, I find RHR to be liable for trespass, and the existence of DelDOT or the
City’s right of access for the purpose of improvement does not change GWA’s
possession and ownership of the land and does not bear effect on RHR’s right of
access, or in this case lack thereof, onto GWA’s property.
E. I do not find it appropriate at this time to order the sidewalk be removed, and I decline at this time to address Plaintiff’s request for injunctive relief.
To obtain a permanent injunction, a party must show: “(1) actual success on
the merits of the claims; (2) that the plaintiff will suffer irreparable harm if injunctive
relief is not granted; and (3) that the harm to the plaintiff outweighs the harm to the
defendant if an injunction is granted.”165 Proof of these three elements is by “the
preponderance of the evidence,” which requires “proof that something is more likely
than not.”166
GWA has not succeeded in its claim to carry out termination of the Easement
Agreement such that this Court can order the removal of the sidewalk in its entirety.
As for the encroaching portions, after weighing the harm to the parties in granting
the requested injunctive relief to remove the encroaching portions of the sidewalk, I
165 Benner v. Council of Narrows Ass’n of Owners, 2014 WL 7269740, at *11 (Del. Ch. Dec. 22, 2014) (citing Examen, Inc. v. VantagePoint Venture P’rs 1996, 2005 WL 1653959, at *2 (Del. Ch. July 7, 2005)). 166 Rosenbaum v. CytoDyn Inc., 2021 WL 4775140, at *13 (Del. Ch. Oct. 13, 2021); McKenna v. Singer, 2017 WL 3500241, at *13 (Del. Ch. July 31, 2017) (quoting Agilent Techs., Inc. v. Kirkland, 2010 WL 610725, at *13 (Del. Ch. Feb. 18, 2010)).
35 am not inclined to order the sidewalk be removed at this time. The cost of removing
portions of the sidewalk that are not within the easement area would be great.167
GWA has presented little evidence of any actual harm it has incurred or will incur
outside the speculative testimony of its risk of potential liability, which RHR has
both taken action to attempt to mitigate and has expressed a willingness to cure any
further issues regarding the maintenance responsibility moving forward.168 The
balance of the harm tips heavily in favor of the Defendants.169
Rather than grant the injunctive relief requested, I direct these parties to
engage in good-faith negotiations regarding a workable settlement for the portions
of the sidewalk that sit outside the easement area, including agreements to handle
the future maintenance and liability responsibilities that align with the needs of all
parties involved. Depending on the results of these settlement discussions, parties
are to return to the Court with either a joint form of order or separate competing
forms of order if the parties cannot come to an agreement.
167 See JX 109. 168 D.I. 95 at 18; JX 84; D.I. 95 at 20–21. 169 See New Castle Shopping LLC v. Trs. of New Castle Common, 2024 WL 4432778, at *7 (Del. Ch. Oct. 7, 2024) (ORDER) (finding that although the law implies damage for trespass, injunctive relief was not appropriate where the defendant has already paid a significant amount in remediation efforts and the plaintiff has presented little evidence as to actual harm from the trespass).
36 F. Attorneys’ Fees and Costs
Delaware follows the American rule which states that “[l]itigants are normally
responsible for paying their own litigation costs.”170 An exception to this rule is the
bad faith exception, which requires the party seeking to shift fees to satisfy “the
stringent evidentiary burden of producing ‘clear evidence’ of bad faith.”171 None of
the parties have engaged in conduct that would justify an award of bad faith fee
shifting.
Another “exception to the American rule ‘is found in contract litigation that
involves a fee shifting provision.’ When a contract contains a fee shifting provision,
Delaware courts will enforce that provision.”172 This Court must interpret fee
shifting provisions as it would any contract provision, by interpreting them
according “to their plain meaning.”173
Section 7 of the easement agreement states, “The RHR Parcel Owner shall
reimburse the Shopping Center Parcel owner for any and all reasonable costs and
expenses, including reasonable attorney’s fees, which the Shopping Center Parcel
170 Mahani v. Edix Media Gp., Inc., 935 A.2d 242, 245 (Del. 2007). 171 Dearing v. Mixmax, Inc., 2023 WL 2632476, at *5 (Del. Ch. Mar. 23, 2023) (ORDER) (quoting Beck v. Atl. Coast PLC, 868 A.2d 840, 851 (Del. Ch. 2005)). 172 GB-SP Hldgs., LLC v. Walker, 2024 WL 4799490, at *24 (Del. Ch. Nov. 15, 2024) (quoting Bako Pathology LP v. Bakotic, 288 A.3d 252, 280 (Del. 2022)) (internal citation omitted). 173 Bako Pathology LP, 288 A.3d at 281 (quoting Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Est. Fund, 68 A.3d 665, 683 (Del. 2013)).
37 owner may directly incur in connection with the enforcement of this Agreement.”174
Considering this, I find it appropriate to award the fees requested by GWA under
section 7 of the Easement Agreement.175 LCC and the City do not owe GWA fees
under section 7, as they are not the RHR parcel owner.
RHR has acknowledged that GWA is entitled to the reimbursement of some
legal fees but argues the additional claims are beyond what was agreed to in the
agreement.176 The enforcement of the agreement included, in part, making claims
relating to the construction of the sidewalk within the designated area; therefore I
find the trespass claims are relating to and arising out of the enforcement of the
agreement.177 Plaintiff shall submit an affidavit in accordance with Court of
Chancery Rule 88, to which Defendant RHR may file a response within twenty days
after filing.
III. CONCLUSION
For these reasons, I find that although RHR has breached the Easement
Agreement, GWA does not have the right to terminate the agreement because the
breaches are not material to the substance of the agreement which has been
substantially fulfilled by RHR. The Easement Agreement remains in place and RHR
174 JX 32 at §7. 175 Id. 176 D.I. 95 at 31. 177 JX 32 at §2.1; JX 32, Ex. A–C.
38 maintains all rights of access afforded therein. The City is not liable for breach of
contract.
I do not find it appropriate to order the encroaching portions of the sidewalk
be removed at this time and instead encourage the parties to engage in good-faith
negotiations to reach a settlement that addresses the encroachment, maintenance
obligations moving forward, and reconciliation of any lacking documentation
required for the construction on GWA’s property.
GWA is entitled to monetary damages representative of any harm imposed
from RHR’s breach of contract. The record was not sufficiently developed for the
Court to make a determination on the amount of monetary damages GWA is entitled
to. The parties should consider this in their settlement discussions on the issues
discussed above. If the parties are not able to come to an agreement, further briefing
and documentation on damages may be required.
Absent the filing of exceptions, the plaintiff shall file a status report within
thirty days. This is my final report, and exceptions may be filed under Court of
Chancery Rule 144.178
178 See Ct. Ch. R. 144(d)(1) (In “[a]ctions that are not summary or expedited… [a] party taking exceptions must file a notice of exceptions within 11 days of the date of the Final report or Draft Report.”).
Related
Cite This Page — Counsel Stack
G-Wilmington Associates v. Riverside Hospital Redevelopment, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/g-wilmington-associates-v-riverside-hospital-redevelopment-llc-delch-2025.