Jack Lingo Asset Management, LLC v. The Board of Adjustment of the City of Rehoboth Beach, Delaware

• Court: Supreme Court of Delaware
• Decided: July 19, 2022
• Docket: 292, 2021
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

JACK LINGO ASSET § MANAGEMENT, LLC, and § No. 292, 2021 SUSSEX EXCHANGE § Court Below: Superior Court PROPERTIES, LLC, FBO LINGO § of the State of Delaware BROTHERS, LLC § § C.A. No. S20A-05-001 Petitioners Below, § Appellants, § § v. § § THE BOARD OF ADJUSTMENT § OF THE CITY OF REHOBOTH § BEACH, DELAWARE § § Respondent Below, § Appellee. §

Submitted: April 27, 2022 Decided: July 19, 2022 Before VALIHURA, TRAYNOR, and MONTGOMERY-REEVES, Justices. Upon appeal from the Superior Court. REVERSED. David C. Hutt, Esquire, R. Eric Hacker, Esquire (argued), Michelle G. Bounds, Esquire, MORRIS JAMES LLP, Georgetown, Delaware, for Petitioners Below/Appellants Jack Lingo Asset Management and Sussex Exchange Properties. Frederick A. Townsend, III, Esquire (argued), D. Barrett Edwards, IV, Esquire, HUDSON, JONES, JAYWORK & FISHER LLC, for Respondent Below/Appellee Board of Adjustment of the City of Rehoboth Beach, Delaware. TRAYNOR, Justice:

Jack Lingo Asset Management (“Lingo”) owns and occupies the property at

240 Rehoboth Avenue in Rehoboth Beach, Delaware. The second story only covers

a portion of the first, leaving a flat roof over the rest of the ground floor. In 2018,

Lingo wanted to convert the second floor from residential to office space. As part

of this project, it sought permission from the City of Rehoboth Beach (the “City”)

to build an unroofed, railed walkway extending from the second floor over the flat

roof to a stairway leading down to Christian Street. The exit walkway would not be

visible from the main thoroughfare.

The City denied Lingo’s application. It determined that the railings

surrounding the walkway would technically expand the Gross Floor Area (or

“GFA”) of 240 Rehoboth Avenue under Section 270 of the Code of Rehoboth Beach

(the “Zoning Code”). This expansion in GFA would, in turn, require Lingo to

provide an additional parking spot, which it had no room to do. Lingo appealed the

denial. The Board of Adjustment of the City of Rehoboth Beach affirmed in two

decisions, and the Superior Court agreed.

We reverse. The Rehoboth Zoning Code in effect at the time of Lingo’s

application did not clearly and unambiguously establish that the proposed egress

structure would increase the Gross Floor Area of 240 Rehoboth Avenue. Applying

2 our settled canon that zoning ambiguities be construed in the property owner’s favor,

we vacate the Board’s decision.

I

A

In October 2018, Lingo sought permission to convert the second floor of 240

Rehoboth Avenue from residential space to office space.1 Lingo’s initial application

was for a 25’ x 25’ deck on top of the first floor of the property.2 In November 2018,

the City approved the permit.3 Instead of proceeding with construction, Lingo

changed course and eventually settled on a smaller rooftop walkway that the City’s

building inspector described as “a general means of egress made up of an exterior

exit access (deck) to an exit (stairs) and exit discharge (bottom of stairs).”4 This

decision refers to Lingo’s final proposal as the Lingo Proposal or the “egress

structure.”

The City rejected the Lingo Proposal on June 10, 2019.5 In an email to Lingo,

the City’s building inspector explained that “the proposed 2nd level egress walkway

is an increase in size requiring one (1) additional parking space as provided under

the City of Rehoboth Beach, Zoning Section 270.29B.”6 Because “there is no room

1 App. to Answering Br. at B24. 2 Id. 3 Id. 4 App. to Opening Br. at A151. 5 Id. at A146. 6 Id.

3 on the property for the new (additional) parking space,” Lingo appealed the City’s

permit denial and, in the alternative, sought a variance from the parking-spot

requirement.7

B

The Board issued two decisions denying Lingo’s appeal. At issue in each was

Section 270-04 of the Zoning Code, which then provided in pertinent part that Gross

Floor Area is “[t]he sum of the gross horizontal areas of the several floors of a

building measured from the exterior face of the exterior walls[.]” The City has since

amended the Zoning Code, and it now specifies that porches, decks, and exterior

stairwells contribute to Gross Floor Area.8 This decision applies the version of the

Zoning Code that was in effect when Lingo sought its permit.

Relying on the old version of the Zoning Code before the Board, Lingo argued

that its proposed egress structure did not increase Gross Floor Area because,

although it was enclosed by a railing, it was outside the building’s exterior walls.9

The Board disagreed and, on September 23, 2019, voted 5-0 “to uphold the [City’s]

determination that the deck enclosed by the railing makes for additional GFA

because the railing constitutes an exterior wall.”10 The Board also voted 3-2 to deny

7 App. to Opening Br. at A141–42. 8 Answering Br. at 14 n.56. 9 App. to Opening Br. at A19. 10 Id. at A21.

4 Lingo’s request for a variance from the parking spot requirement.11 The Board

acknowledged that “the proposed structure in question would serve as a walkway,

not as a gathering place[.]”12

After the Board’s first decision in this case, the City published the following

“Building & Licensing Notice” on its website:

Property Owners, Contractors and Design Professionals note that enclosed spaces of decks, balconies, and porches will be counted as contributing to the sum of gross floor area (GFA) for purposes of calculating floor area ratio (FAR). The floor area ratio (FAR) is the relationship between the total amount of floor area that a building has or has been permitted to have and the total area of the lot on which the building stands.

The City of Rehoboth Beach Board of Adjustment on September 23, 2019, upheld the Building Inspector’s interpretation to include the square footage of such structures for computing gross floor area (GFA). Plans submitted prior to September 24, 2019, will be reviewed to [the] previous code interpretation.13

In response, Lingo petitioned the Board for re-hearing, arguing that “[s]ince

[Lingo’s] application was submitted prior to September 24, 2019[,] the Board and

[City] should apply ‘the previous code interpretation,’ . . . i.e., that deck railings do

not constitute ‘exterior walls[.]’”14 In its rebuttal to Lingo’s petition, the City

acknowledged that recent residential inspections “ha[d] not included the outdoor

11 Id. 12 Id. at A20. 13 Id. at A206 (emphasis added). 14 Id. at A212.

5 areas with enclosures in the calculation of gross floor area,” but maintained that

commercial inspections had generally done so.15 The failure of the Building &

Licensing Department’s notice to identify this distinction between commercial and

residential inspections was, according to the City, “an oversight.”16 So, too, the City

said, was its approval of Lingo’s initial application for a 25’ x 25’ deck.17

In April 2020, the Board issued its decision on re-hearing, affirming the denial

of Lingo’s permit application.18 Because Lingo specifically appealed this ruling, we

refer to it as “the Decision” or the “Board’s decision.”19 The Decision carried by a

3-2 vote, with those in favor citing various arguments in support of the City. Those

opposed “were not persuaded” that the drafters of the Zoning Code “intended to

include gross floor area square footages presented by open external staircases and

decks” and concluded that “the code was ambiguous in this respect[.]”

C

Lingo appealed the Board’s decision to the Superior Court via the statutory

writ of certiorari.20 The court affirmed, agreeing with the City that “[a] building

inspector could reasonably determine” that structures like Lingo’s proposed exit

walkway “qualify as buildings subject to GFA calculations because they are usually,

15 Id. at A225. 16 Id. at A234. 17 App. to Answering Br.at B37–38. 18 App. to Opening Br. at A24–26. 19 Id. at A6. 20 Id.; 22 Del. C. § 328.

6 although need not be, roofed, walled, and built for permanent use.”21 The court then

determined that “the [Zoning] Code is reasonably susceptible to one interpretation—

the inclusion of decks, porches, balconies, and staircases in the GFA calculations.”22

II

Our review of a decision by a Board of Adjustment “is limited to correction

of errors of law and to determining whether or not substantial evidence exists on the

record to support the Board’s findings of fact and conclusions of law.”23 This case

concerns a claimed error of law: the Board’s interpretation of the Zoning Code.24

III

Our principles of statutory interpretation are well-settled: we aim “to ascertain

and give effect to the intent of the legislators, as expressed in the statute.”25 If the

plain statutory text admits only one reading, we apply it.26 But we also recognize

that statutes are not always drafted clearly. So, when the statutory text is “reasonably

susceptible” of different conclusions or interpretations, we normally consider

21 Jack Lingo Asset Mgmt., LLC v. Bd. of Adjustment of City of Rehoboth Beach, 2021 WL 3661211, at *4 (Del. Super. Ct. Aug. 13, 2021). 22 Id. at *5 (emphasis in original). 23 Snyder v. New Castle Cty., 135 A.3d 763, 2016 WL 1375393, at *2 (TABLE) (Del. 2016) (quoting Janaman v. New Castle Cnty. Bd. of Adjustment, 364 A.2d 1241, 1242 (Del. 1976)). 24 Lingo also argues that the Board’s decision was not supported by substantial evidence. Because we vacate the Board’s decision on statutory construction grounds, we have no occasion to reach this additional argument. 25 Noranda Aluminum Holding Corp. v. XL Ins. Am., Inc., 269 A.3d 974, 977 (Del. 2021) (citing Dewey Beach Enters., Inc. v. Bd. of Adjustment of Town of Dewey Beach, 1 A.3d 305, 307 (Del. 2020)); see also Spintz v. Div. of Fam. Servs., 228 A.3d 691, 698 (Del. 2020). 26 Dir. of Revenue v. Verisign, 267 A.3d 371, 378 (Del. Nov. 29, 2021) (citing In re Port of Wilmington Gantry Crane Litig., 238 A.3d 921, 937 (Del. 2020));

7 extrinsic evidence, such as legislative history and any historical applications of the

text at issue.27 In the zoning context, however, we need not consider extrinsic

evidence because we have long held that, when an ambiguity is present, “the

interpretation that favors the landowner controls.”28

Thus, in order to enforce its interpretation of the Zoning Code against Lingo,

the Board must be able to defend its reading as the only reasonable construction.

This the Board cannot do. As we explain in more detail below, the Zoning Code in

effect when Lingo sought its permit did not define “exterior walls,” and Lingo offers

a common-sense, natural reading of the term that does not cover the railings at issue

in its proposal. On the other hand, the Board proffers a reading that is strained at

best. Because we resolve zoning ambiguities in favor of the property owner, the

Board’s decision must be reversed.

27 Judicial Watch v. Univ. of Del., 2021 WL 5816692, at *5 (Del. Dec. 6, 2021); Chase Alexa, LLC, v. Kent Cnty. Levy Ct., 991 A.2d 1148, 1151 (Del. 2010). 28 Dewey Beach Enters., 1 A.3d at 310 (“[T]o the extent that there is any doubt as to the correct interpretation, that doubt must be resolved in favor of the landowner.”); Chase Alexa, 991 A.2d at 1152 (citing Mergenthaler v. State, 293 A.2d 287, 288 (Del. 1972) (“[W]e must keep in mind that zoning laws are to be interpreted in favor of the occupants of the land.”)); Carl M. Freeman Assocs., Inc. v. Green, 447 A.2d 1179, 1182 (Del. 1982) (“The [General Assembly] delegates authority to the [counties] to adopt zoning regulations. . . . Because zoning ordinances are in derogation of common law property rights, [there must be] strict compliance with the [legislated] procedures.”) (quoting Kalakowski v. Town of Clarendon, 431 A.2d 478, 479 (Vt. 1981); see 83 Am. Jur. 2d Zoning and Planning § 5 (“Generally, land use statutes are in derogation of the common law, and their provisions must be strictly construed.”).

8 A

Section 270-04 of the Zoning Code defined Gross Floor Area as, in pertinent

part:

The sum of the gross horizontal areas of the several floors of a building measured from the exterior face of the exterior walls or from the center line of a wall separating two attached buildings, including basements but not including any space where the floor-to-ceiling height is less than six feet, six inches[.]29

The Zoning Code defined “wall” as, among other things, “[t]he vertical exterior

surface of a building[.]”30 And it defined “building” as “[a] structure, usually roofed,

walled and built for permanent use, as for a dwelling or for commercial purposes.”31

Reading these defined terms together, “Gross Floor Area” aggregates the area of

each floor of a “building” between its “exterior walls”; “walls” are, in this setting,

the vertical side of a “building”; and a “building” is “usually roofed” and “built for

permanent” residential and commercial use.

Lingo argues that the term “exterior walls”—which is not defined in the

Zoning Code—“refers to those walls of a building that connect the floor to the

29 App. to Answering Br. at B105. The Zoning Code defines the term as “Floor Area, Gross.” For the reader’s convenience, this decision refers to it as “Gross Floor Area,” as the parties have. 30 Id. at B108. Wall is also defined as “[a] structure of brick, masonry or similar materials erected so as to enclose or screen areas of land” and “[t]he vertical interior surfaces which serve to divide a building’s space into rooms.” Id. Because the GFA calculation evaluates the area “of the several floors of a building from the exterior face of the exterior walls,” these other types of walls are not relevant to this appeal. It is our view, though, that the Lingo Proposal would not qualify as either, because is does not appear to be made of brick or stone and it does not create new rooms. 31 Id. at B103.

9 ceiling (or the foundation to the roof) and that have at least one side facing outside

the building,” and that this plain meaning “does not include a deck or walkway

railing.”32 We agree that, even though the Zoning Code did not define “exterior

walls,” the Zoning Code’s other defined terms strongly suggest that the railings in

Lingo’s egress structure would not have qualified. For starters, it is difficult to see

how the “general means of egress” proposed by Lingo counts as a “building.” After

all, Lingo’s egress structure is not of the type that is “usually roofed”—indeed, the

plans do not propose a roof—and neither party argues that it was to be “built for

permanent use, as for a dwelling or for commercial purposes.”33 Instead, the Board

acknowledges that “the proposed structure in question would serve as a walkway,

not as a gathering place[.]”34 In sum, we struggle to follow how Lingo’s walkway

railings may be fairly classified as “exterior walls” of a “building.”

At least one generally accepted definition of “exterior walls” offers additional

support for the proposition that the term, properly and naturally understood, refers

to the outer surfaces of a building that connect floors to ceilings. The International

Building Code (“IBC”) defines “exterior wall” as “[a] wall, bearing or nonbearing,

that is used as an enclosing wall for a building, other than a fire wall, and that has a

32 Opening Br. at 2, 21. 33 App. to Opening Br. at A147, 34 Id. at A20.

10 slope of 60 degrees (1.05 rad) or greater with the horizontal plane.”35 This definition

plainly does not encompass the railings at issue in the Lingo Proposal; those railings

do not enclose a building, but instead surround an exit walkway. 36

In our view, Lingo offers a reasonable, intuitive reading of the critical term in

this case: “exterior walls” may be naturally understood to refer to the outer surfaces

of a building that connect floors to ceilings. Understood in this way, the term does

not fairly cover the walkway railing proposed by Lingo.

After previously interpreting “exterior walls” similarly to how Lingo does in

this appeal,37 the Board now maintains that “[t]he plain language of the Zoning Code

unambiguously encompasse[d] decks and stairways within the GFA[.]”38 We

disagree. The Board’s reading is strained and does not preclude the statutory

construction offered by Lingo. Because we have long settled zoning ambiguities in

35 2018 Int’l Bldg. Code § 202, adopted at Code of the City of Rehoboth Beach § 102-1 (“The International Building Code, 2018 Edition, including Appendix Chapters E, F and J, . . . is hereby adopted as the Building Code of the City of Rehoboth Beach[.]” (emphasis removed); see Opening Br. at 23. 36 The City has adopted the IBC in full as the City’s own building code. Id. While it has not incorporated the IBC into the Zoning Code, we take note of the City’s endorsement of the model statute in a closely related context. 37 As discussed above, the City approved Lingo’s initial application for a 25’ x 25’ deck on top of the first floor of the property. App. to Answering Br. at B24. Lingo additionally details an apparently extensive history of the City not counting decks, porches, and other similar structures as Gross Floor Area. Opening Br. at 10–11; App. to Opening Br. at 175–205. We need not consider this extrinsic evidence given our well-established rule of construction that zoning ambiguities be construed in favor of the property owner. 38 Answering Br. at 12.

11 favor of the property owner, we must therefore reverse the Board’s denial of Lingo’s

application.

As discussed, the Zoning Code, in pertinent part, defined Gross Floor Area as

“[t]he sum of the gross horizontal areas of the several floors of a building measured

from the exterior face of the exterior walls or from the center line of a wall separating

two attached buildings[.]39 The Board argues that this definition, read alongside

other defined terms, unambiguously applies to the Lingo Proposal. The Board’s

three-pronged logic proceeds as follows:40

• First, the Board observes that Zoning Code defined “structure” as

“[a]nything constructed or erected, including any part thereof, the use

of which requires permanent location on the ground or attachment to

something having a permanent location on the ground[.]”41 The Board

says that the Lingo Proposal contemplates the erection of a “structure”

under this definition.42

• Second, the Board argues that the Lingo Proposal seeks permission to

add not only a structure but also a “building.”43 As mentioned, the

Zoning Code defined “building” as “[a] structure, usually roofed,

39 App. to Answering Br. at B105. 40 Answering Br. at 17. 41 App. to Answering Br. at B107. 42 Answering Br. at 13–15. 43 Id. at 15.

12 walled and built for permanent use, as for a dwelling or for commercial

purposes.”44

• Third, the Board offers that, because the Lingo Proposal envisions a

“structure” and a “building,” its railings are walls because the Zoning

Code defined “wall” as “[t]he vertical exterior surface of a

building[.]”45

The Board acknowledges that its reading “may in fact be long-winded and tortured[,]

as Lingo suggests,”46 but assures us that “the definitions of structure, building, and

wall all work together to create an unambiguous interpretation of the GFA

definition.”47

Although we agree with the Board that the Lingo Proposal calls for a

“structure” as the Zoning Code defined that term, for the reasons discussed above

we cannot confidently say that the Lingo Proposal envisions a “building” with

“exterior walls.” Nevertheless, the Board argues that another provision of the

Zoning Code reveals that the Board’s approach is the only reasonable path. The

Board calls this provision the “Open Porch Exclusion,” which provided in pertinent

part that

44 Id.; App. to Answering Br. at B103. 45 App. to Answering Br. at B108. 46 Answering Br. at 16. 47 Id. at 18 (emphasis in original).

13 [t]he first 250 square feet of an open front porch shall be excluded from the gross floor area, provided that such porch is on the street side of the building, at the first-floor level, roofed, one floor with no living space or deck above the porch, meets the definition of open porch in § 270-4, and is not heated or air-conditioned. Any square footage in excess of 250 square feet shall be included in the gross floor area.48

According to the Board, “[i]f porches were never intended to be included in the GFA

calculation, there would be no need for this narrowly drawn exception pertaining to

porches.”49

In our view, the Board’s Open Porch argument overlooks that the Zoning

Code separately defined “Open Porch” as a structure that may be roofed and entirely

screened in.50 Specifically, Open Porches may have guardrails, railings, floor-to-

ceiling mesh screens “together with necessary framework,” and “[n]ecessary posts

or pillars required to support the porch roof.”51 Thus, the vertical exterior of any

Open Porch may actually be load bearing, as well as screened for the comfort of

gatherers within. This is entirely different than the uncovered, railed walkway

proposed by Lingo. In our view, it would not be inconsistent for the drafters of the

Zoning Code to intend to count some or all of an Open Porch within Gross Floor

48 App. to Answering Br. at B110. 49 Answering Br. at 25. 50 Code of the City of Rehoboth Beach § 270-04, https://ecode360.com/7276706 (emphasis added). The Board’s answering brief quotes the defined terms “structure,” “building,” and “wall,” but does not—in its body or appendix—reproduce the definition of “Open Porch.” 51 Code of the City of Rehoboth Beach § 270-04, https://ecode360.com/7276706.

14 Area while excluding a railed egress structure designed to “serve as a walkway, not

as a gathering place[.]”52

In sum, we do not believe that the Board offers the only reasonable

interpretation of the Zoning Code in this case. Rather, even if it is technically

possible to construct the Board’s reading from the Zoning Code’s defined terms, the

Board’s construction is strained and does not preclude Lingo’s interpretation.

IV

Local governments are empowered to reasonably restrict property use through

zoning.53 When they do so, they must define the restrictions in clear and

unambiguous terms.54 We hold that, in this case and for the reasons set forth above,

the Zoning Code of the City of Rehoboth Beach did not unambiguously prohibit

Lingo from building an unroofed exit walkway on its property. As a result, the City

should have permitted the Lingo Proposal. We therefore reverse the Board’s

decision.

52 App. to Opening Br. at A20. 53 Mayor and Council of New Castle v. Rollins Outdoor Advertising, Inc., 475 A.2d 355, 360 (Del. 1984). 54 Chase Alexa, 991 A.2d at 1152.