Jennifer August v. The Glade Property Owners Association, Inc.
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Opinion
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
JENNIFER AUGUST, ) ) Plaintiff, ) ) v. ) C.A. No. 2020-0834-BWD ) THE GLADE PROPERTY OWNERS ) ASSOCIATION, INC., THE BOARD OF ) DIRECTORS AND OFFICERS OF THE ) GLADE PROPERTY OWNERS ) ASSOCIATION, INC., 2018-2019, 2019-2020 ) AND 2020-2021, and SEASCAPE PROPERTY ) MANAGEMENT, INC., ) ) Defendants. )
MASTER’S FINAL REPORT
Final Report: May 1, 2023 Date Submitted: February 28, 2023
Jennifer August, Rehoboth Beach, Delaware; Plaintiff.
Aaron Moore, MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN, P.C., Wilmington, Delaware; Attorneys for Defendants.
DAVID, M. This final report resolves Plaintiff’s and Defendants’ competing motions for
summary judgment (together, the “Motions”) on Count I of Plaintiff’s Verified
Complaint (the “Complaint”).
The pro se Plaintiff in this action, Jennifer August, is a homeowner in the
Holland Glade community located in Rehoboth Beach, Delaware (the
“Community”), a common interest community as defined in the Delaware Uniform
Common Interest Ownership Act (“DUCIOA”). The Community is maintained by
The Glade Property Owners Association, Inc. (the “Association”), a Delaware
nonprofit, nonstock corporation. In September 2020, Plaintiff initiated this action,
lodging dozens of grievances against the Association and its property manager,
SeaScape Property Management, Inc. (“SeaScape”). Chief among those complaints,
Count I of the Complaint challenges a 2019 amendment to the Community’s
Declaration of Covenants and Restrictions (the “Declaration”) imposing occupancy
and rental restrictions on homes in the Community (the “Amendment”).
The procedural and substantive objections Plaintiff has raised to challenge
what she believes was a “puppeteered election” using “sham voting procedures,”
resulting in an “unconscionable,” “discriminatory, arbitrary, [and] unenforceable”
2 Amendment, are numerous.1 This final report attempts to make sense of each
argument with the leniency typically afforded pro se litigants, while still holding all
parties to the same summary judgment standard that prohibits either side from
relying on “mere allegations or denials” once the other has demonstrated the absence
of a material fact.
For the reasons explained below, I conclude, contrary to Defendants’
arguments, that Plaintiff has standing under 8 Del. C. § 225(b) to bring her claim
challenging the Amendment. I further conclude, however, that neither the law nor
the record supports Plaintiff’s procedural and substantive attacks on the
Amendment. Accordingly, I recommend that Plaintiff’s motion for summary
judgment be denied, and Defendants’ motion for summary judgement be granted, as
to Count I.
I. BACKGROUND
The following facts are drawn from documents submitted in support of the
Motions.2 Although the parties submitted evidence covering dozens of issues over
1 Verified Compl. to Set Aside the Am. Covenant Restrictions 12.2.1; to Recover and Distribute Assets; for Repairs and Maintenance Under the Deed; and for Other Equitable Relief ¶¶ 4, 8, 126, 131, Dkt. No. 1 [hereinafter, “Compl.”]. 2 In support of their motion, Defendants submitted copies of the Governing Documents and two other documents relevant to Counts II and III. All other documents were submitted by Plaintiff. 3 time periods far broader than those addressed in the Complaint, I summarize only
the record evidence relevant to Count I of the Complaint.
A. The Community, the Association, and the Governing Documents The Community is a residential community in Rehoboth Beach, Delaware.
The Community is a “common interest community” as defined in the DUCIOA. 25
Del. C. § 81-116. Because it was established in 1991, nearly two decades before the
DUCIOA was enacted, the Community is considered a “preexisting” community
under the act. 25 Del. C. § 81-119.
The Association is a Delaware nonprofit, nonstock corporation tasked with
“managing, maintaining, and caring for the common facilities, common lands, and
recreational amenities of” the Community. Pl.’s Omnibus Mot. For Declaratory J.
and Summ. J. on Counts I, II and III Under Chancery Ct. R. 56(a), 56(c) and 57, Ex.
1, Dkt. No. 137 [hereinafter, “Certificate”]. As a Delaware corporation and a
common interest community, the Association is governed by both “external
authorities”3—the Delaware General Corporation Law (“DGCL”) and the
DUCIOA—and “internal authorities”—the Declaration, a certificate of
incorporation (“Certificate”), and corporate bylaws (“Bylaws,” and with the
Declaration and Certificate, the “Governing Documents”).
3 Beck v. Greim, 2020 WL 6742708, at *2 (Del. Ch. Nov. 17, 2020). 4 The Declaration provides that “[e]ach owner of any property now or hereafter
subjected to this Declaration shall automatically become a Member [o]f the
Association.” Compl., Ex. 2 at Section 3.2.1, Dkt. No. 1 [hereinafter,
“Declaration”]. The Declaration also provides that:
The Association shall have one (1) class of voting membership consisting of the Members of the Association. All Members shall be entitled to vote on all matters coming before the membership. Votes shall be cast or exercised by each Member in such manner as may be provided in the By-Laws of the Association. The Members shall have one (1) vote for each Unit which has been conveyed by fee simple title to the Owner and the deed therefore recorded in the public records of the County.
Declaration at Section 3.3. An amendment to the Declaration
must be approved by the affirmative vote of at least sixty six percent (66%) of the Members of record entitled to vote. There shall be only one vote per Unit in person, by proxy, or by mail ballot when so canvassed. Proposed amendments shall be mailed to the entire Membership and placed on the agenda at least two weeks prior to a special or regular meeting of the Association duly called and held upon notice, or in the case of a mail canvassing, at least two weeks prior to the required return date of the mailed ballots. Covenant amendments may not be submitted from the floor. Only Members entitled to vote may make proposals or vote to amend this Declaration; voting shall be in accordance with Sections 3.3 and 3.5.
Id. at Section 14.2.1.
The Certificate empowers the Association to “perform, administer, and
enforce the covenants, conditions, restrictions, and other provisions set forth in the
[Declaration], the rules and regulations promulgated by the Corporation, and the
traffic regulations promulgated by the Corporation.” Certificate at art. 3. The 5 Certificate states that conditions for membership in the Association “shall be as
stated in the By-laws,” and, like the Declaration, establishes “one (1) class of voting
membership consisting of the Members of the Corporation,” such that “[e]ach
Member who is in good standing shall be entitled to vote at every meeting of
Members.” Id. at art. 9-10.
The Bylaws further delineate the voting rights of Members:
The Association shall have one (1) class of voting membership consisting of the Members of the Association entitled to vote. There shall be only one (1) vote cast for each Unit (as defined in the [Declaration]). The person casting a vote with respect to a Unit must be identified on a deed recorded in the Office of the Recorder of Deeds in and for Sussex County as an owner or as a trustee of a trust that is an owner of that Unit within the Holland Glade subdivision.
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
JENNIFER AUGUST, ) ) Plaintiff, ) ) v. ) C.A. No. 2020-0834-BWD ) THE GLADE PROPERTY OWNERS ) ASSOCIATION, INC., THE BOARD OF ) DIRECTORS AND OFFICERS OF THE ) GLADE PROPERTY OWNERS ) ASSOCIATION, INC., 2018-2019, 2019-2020 ) AND 2020-2021, and SEASCAPE PROPERTY ) MANAGEMENT, INC., ) ) Defendants. )
MASTER’S FINAL REPORT
Final Report: May 1, 2023 Date Submitted: February 28, 2023
Jennifer August, Rehoboth Beach, Delaware; Plaintiff.
Aaron Moore, MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN, P.C., Wilmington, Delaware; Attorneys for Defendants.
DAVID, M. This final report resolves Plaintiff’s and Defendants’ competing motions for
summary judgment (together, the “Motions”) on Count I of Plaintiff’s Verified
Complaint (the “Complaint”).
The pro se Plaintiff in this action, Jennifer August, is a homeowner in the
Holland Glade community located in Rehoboth Beach, Delaware (the
“Community”), a common interest community as defined in the Delaware Uniform
Common Interest Ownership Act (“DUCIOA”). The Community is maintained by
The Glade Property Owners Association, Inc. (the “Association”), a Delaware
nonprofit, nonstock corporation. In September 2020, Plaintiff initiated this action,
lodging dozens of grievances against the Association and its property manager,
SeaScape Property Management, Inc. (“SeaScape”). Chief among those complaints,
Count I of the Complaint challenges a 2019 amendment to the Community’s
Declaration of Covenants and Restrictions (the “Declaration”) imposing occupancy
and rental restrictions on homes in the Community (the “Amendment”).
The procedural and substantive objections Plaintiff has raised to challenge
what she believes was a “puppeteered election” using “sham voting procedures,”
resulting in an “unconscionable,” “discriminatory, arbitrary, [and] unenforceable”
2 Amendment, are numerous.1 This final report attempts to make sense of each
argument with the leniency typically afforded pro se litigants, while still holding all
parties to the same summary judgment standard that prohibits either side from
relying on “mere allegations or denials” once the other has demonstrated the absence
of a material fact.
For the reasons explained below, I conclude, contrary to Defendants’
arguments, that Plaintiff has standing under 8 Del. C. § 225(b) to bring her claim
challenging the Amendment. I further conclude, however, that neither the law nor
the record supports Plaintiff’s procedural and substantive attacks on the
Amendment. Accordingly, I recommend that Plaintiff’s motion for summary
judgment be denied, and Defendants’ motion for summary judgement be granted, as
to Count I.
I. BACKGROUND
The following facts are drawn from documents submitted in support of the
Motions.2 Although the parties submitted evidence covering dozens of issues over
1 Verified Compl. to Set Aside the Am. Covenant Restrictions 12.2.1; to Recover and Distribute Assets; for Repairs and Maintenance Under the Deed; and for Other Equitable Relief ¶¶ 4, 8, 126, 131, Dkt. No. 1 [hereinafter, “Compl.”]. 2 In support of their motion, Defendants submitted copies of the Governing Documents and two other documents relevant to Counts II and III. All other documents were submitted by Plaintiff. 3 time periods far broader than those addressed in the Complaint, I summarize only
the record evidence relevant to Count I of the Complaint.
A. The Community, the Association, and the Governing Documents The Community is a residential community in Rehoboth Beach, Delaware.
The Community is a “common interest community” as defined in the DUCIOA. 25
Del. C. § 81-116. Because it was established in 1991, nearly two decades before the
DUCIOA was enacted, the Community is considered a “preexisting” community
under the act. 25 Del. C. § 81-119.
The Association is a Delaware nonprofit, nonstock corporation tasked with
“managing, maintaining, and caring for the common facilities, common lands, and
recreational amenities of” the Community. Pl.’s Omnibus Mot. For Declaratory J.
and Summ. J. on Counts I, II and III Under Chancery Ct. R. 56(a), 56(c) and 57, Ex.
1, Dkt. No. 137 [hereinafter, “Certificate”]. As a Delaware corporation and a
common interest community, the Association is governed by both “external
authorities”3—the Delaware General Corporation Law (“DGCL”) and the
DUCIOA—and “internal authorities”—the Declaration, a certificate of
incorporation (“Certificate”), and corporate bylaws (“Bylaws,” and with the
Declaration and Certificate, the “Governing Documents”).
3 Beck v. Greim, 2020 WL 6742708, at *2 (Del. Ch. Nov. 17, 2020). 4 The Declaration provides that “[e]ach owner of any property now or hereafter
subjected to this Declaration shall automatically become a Member [o]f the
Association.” Compl., Ex. 2 at Section 3.2.1, Dkt. No. 1 [hereinafter,
“Declaration”]. The Declaration also provides that:
The Association shall have one (1) class of voting membership consisting of the Members of the Association. All Members shall be entitled to vote on all matters coming before the membership. Votes shall be cast or exercised by each Member in such manner as may be provided in the By-Laws of the Association. The Members shall have one (1) vote for each Unit which has been conveyed by fee simple title to the Owner and the deed therefore recorded in the public records of the County.
Declaration at Section 3.3. An amendment to the Declaration
must be approved by the affirmative vote of at least sixty six percent (66%) of the Members of record entitled to vote. There shall be only one vote per Unit in person, by proxy, or by mail ballot when so canvassed. Proposed amendments shall be mailed to the entire Membership and placed on the agenda at least two weeks prior to a special or regular meeting of the Association duly called and held upon notice, or in the case of a mail canvassing, at least two weeks prior to the required return date of the mailed ballots. Covenant amendments may not be submitted from the floor. Only Members entitled to vote may make proposals or vote to amend this Declaration; voting shall be in accordance with Sections 3.3 and 3.5.
Id. at Section 14.2.1.
The Certificate empowers the Association to “perform, administer, and
enforce the covenants, conditions, restrictions, and other provisions set forth in the
[Declaration], the rules and regulations promulgated by the Corporation, and the
traffic regulations promulgated by the Corporation.” Certificate at art. 3. The 5 Certificate states that conditions for membership in the Association “shall be as
stated in the By-laws,” and, like the Declaration, establishes “one (1) class of voting
membership consisting of the Members of the Corporation,” such that “[e]ach
Member who is in good standing shall be entitled to vote at every meeting of
Members.” Id. at art. 9-10.
The Bylaws further delineate the voting rights of Members:
The Association shall have one (1) class of voting membership consisting of the Members of the Association entitled to vote. There shall be only one (1) vote cast for each Unit (as defined in the [Declaration]). The person casting a vote with respect to a Unit must be identified on a deed recorded in the Office of the Recorder of Deeds in and for Sussex County as an owner or as a trustee of a trust that is an owner of that Unit within the Holland Glade subdivision.
Each member entitled to vote shall, at every meeting of the membership, be entitled to one vote in person, by proxy signed by the member (no proxy shall be voted on after three (3) years from its date, unless it provides for a longer period), or by absentee ballot on a form as approved by the Board of Directors. Such right to vote shall be subject to the right of the Board of Directors to close the membership books or to fix a record date for voting members as hereinafter provided and if the Directors shall not have exercised such right, no vote shall be voted on at any election for Directors, or for any other purpose, which shall have transferred on the books of the corporation within twenty days next preceding such election. Proxies and absentee ballots should be received at the Clubhouse Management Office not later than one (1) week prior to the meeting. . . .
Absentee ballot voting is permitted for any matter in accordance with the prescribed quorum and voting requirements. The Board of Directors shall provide each member entitled to vote with an absentee ballot with respect to all matters which it knows shall be put to a vote at a meeting.
6 All matters put to a vote shall be carried by a majority of the members voting, unless stated otherwise in a specific section of the [Declaration], or the Bylaws.
Bylaws at Section 3.
B. The Amendment Prior to the adoption of the Amendment challenged in Count I, Section 12.2.1
of the Declaration provided that “All Residences shall be used only as single family,
private, residential dwellings and for no other purpose. No business or commercial
buildings may be erected on any lot and no business may be conducted on any part
thereof.” Declaration at Section 12.2.1.
The Amendment states, in part:
12.2.1(a). All Residences shall be used only as single family, private, residential dwellings and for no other purpose. No business or commercial buildings may be erected on any lot and no business, except for telecommuting, may be conducted on any part thereof. A Residence shall be further defined to mean a residential dwelling designed or occupied by not more than one of the following as a single housekeeping unit with single culinary facilities:
(1) A Family, defined as a group consisting of one person or a married couple with any number of natural children, foster children, stepchildren, adopted children, parents, grandparents, and/or grandchildren;
(2) Two single persons and their Families (as defined above) functioning as a single housekeeping unit;
(3) A group of not more than four persons not necessarily related by blood or marriage functioning as a single housekeeping unit;
7 (4) One person or two persons, one of whom shall be elderly and/or disabled, and one or both of whom own the dwelling unit, plus one Family; or
(5) Family (as defined above) or two single persons and their Families (as defined above) functioning as a single housekeeping unit, plus a caretaker and/or an exchange student.
(6) For the purpose of this section, “disabled” includes any person or person with a handicap or disability as those terms are defined in the Delaware Fair Housing Act, Title 6, Chapter 46, of the Delaware Code, as may be amended.
Residential Guests of an Owner (or of a tenant if a rental property) shall not be considered in determining compliance with the occupancy limitations set forth in this section. A Residential Guest is hereby defined as a temporary visitor occupying a Residence, or portion thereof, for no consideration. In the event a Residential Guest remains on the property for a period in excess of two (2) weeks, then the Owner shall register the Residential Guest with the Association. No Residence may be used as a rooming house, motel, hotel or otherwise for transient tenants who temporarily reside in or lease the Residence (or portion thereof, which in and of itself is prohibited).
Compl., Ex. 4 at Section 12.2.1(a), Dkt. No. 1 [hereinafter, “Amend.”].
The Amendment also includes rules and regulations governing leases. See,
e.g., Amend. at Section 12.2.1(b)(2) (“A Residence may be leased no more than once
in any twelve (12) month period and the minimum initial term shall not be less than
three (3) months.”). Additionally, Section 12.2.1(b)(6) of the Amendment includes
an enforcement mechanism “[i]f any Owner or any tenant(s) is in violation of any of
the provisions of the governing documents.” That provision permits the Board to
levy fines and, in certain circumstances, authorizes the Board to “bring an action in
8 its own name or in the name of the Owner, or both, to terminate the lease and have
the tenant evicted and/or to recover damages (including but not limited to the full
amount of rent paid and/or due to the Owner from the tenant(s)).” Id. at Section
12.2.1(b)(6).
C. The Members Approve the Amendment By Ballot Without a Meeting.
At a September 21, 2018 meeting of the Association’s board of directors (the
“Board”), “[a] proposed Covenant change was presented that would limit the length
of a lease of a property within the [Community] to one year.” Pl.’s Reply Br. in
Supp. of Pl.’s Mot. for Summ. J. [hereinafter, “PRB”] Ex. 19, Dkt. No. 143. After
discussion, the Board decided it would consult an attorney “for recommended
wording” of a potential amendment. Id.
On March 1, 2019, the Board held a meeting at which SeaScape President
Chris Nichols discussed “two methods to achieve approval of a Covenant change by
the [Association] membership”—either by holding a Member vote at “a Community
meeting,” or by disseminating “a mail request for a vote with a specific date for
return of the vote which could be accompanied by informational meetings for the
[Association] membership.” Id. at 2.4 After discussion, “it was unanimous among
4 Because the exhibits attached to Plaintiff’s Reply Brief combine multiple documents with different pagination, the page numbers cited herein refer to the page numbers of the combined PDFs filed on the docket. 9 the Board members that the vote of the Covenant changes regarding rentals would
be handled by mail.” Id. The Board further determined that the Association would
hold informational meetings on April 6, May 4 and June 1, 2019, to “acquaint the
homeowners” with the Amendment, and would provide the Members with a “packet
of information detailing the changes proposed for the Covenants as well as a voting
ballot” with a deadline for returning the ballots to be set “no later than July 1, 2019.”
Id.5
On March 29, 2019, the Board held another meeting. PRB, Ex. 48. At that
meeting, the Board again noted that informational sessions were scheduled for April
6, May 4 and June 1, 2019, to “share information about the proposed Covenant
change, receive input from the property owners,” and “generate participation in
voting.” PRB, Ex. 48.
In April 2019, the Board circulated fliers to the Members informing them of
the upcoming informational meetings. PRB, Ex. 17. The Complaint alleges that at
the April 6, 2019 meeting, former Association President James Wigand
“misrepresented that owners’ mortgage rates could be inflated unless owners voted
to pass the Amendment,” and further remarked that “[t]his is the reason our
properties don’t do as well as nearby communities” and “[w]e will continue to suffer
5 The March 1, 2019 Board meeting minutes also note that “any change to the Covenants requires a positive vote of 66 2/3% of the membership.” PRB, Ex. 17 at 2. 10 unless the Amendment is passed.” Compl. ¶¶ 14-15. The Motions do not attach
minutes of the April 6 meeting, but according to the Complaint, when Plaintiff
“appropriately objected to the process, definitions, and terms of the Amendment,”
Wigand “sternly repeated her name,” “slapped his leg as she began to speak,” and
“huffed and rolled his eyes before the Owners as she spoke.” Id. ¶ 19.
On June 20, 2019, the Board distributed solicitation materials on the
Amendment that included a cover letter, a copy of the proposed Amendment,
“Q&A’s,” and a ballot. PRB, Ex. 18 at 1, 3.6 The next day, on June 21, 2019, the
Board held a meeting at which the Amendment was discussed. Id. at 1. The minutes
of that meeting indicate ballots on the Amendment “went out yesterday[,] June 20,
2019,” and that “[a]t the [June 22] Annual Meeting the homeowners w[ould] receive
the agenda and the proposed Covenant change,” but ballots would not be provided
at that meeting. Id.
Throughout the month of July, Members received communications
encouraging them to return their ballots on the proposed Amendment. A July 2019
Association newsletter stated: “The Board encourages you to return your ballot
immediately, no matter which side of the issue you fall on. The Board would like to
hear from every voice in the community. PLEASE RETURN YOUR BALLOT!”
6 Although documents in the record refer to the June 20, 2019 solicitation materials, the parties did not submit a copy of those materials with their Motions. 11 PRB, Ex. 20 at 3. On July 8, 2019, Nichols emailed the Members, reminding them
to “VOTE NOW! MAKE YOUR VOICE BE HEARD!” PRB, Ex. 23 at 2. On July
15, 2019, Nichols emailed the Members again, encouraging them to return their
ballots and stating, “We need to receive a signed ballot from each homeowner.” Id.
at 3. On July 17, 2019, Nichols circulated a mailer by email that stated: “WE WANT
YOUR VOICE TO BE HEARD. EACH VOTE IS IMPORTANT!” Id. at 4. On
July 24, 2019, another mailer was circulated, reporting that “As of this date, we have
received ballots from over 55% of our homeowners. Our team of volunteers has
been working diligently to get all of you to VOTE so that your voice will be heard.
. . . Our goal? 100% return of ballots.” Id. at 7. And on July 29, 2019, Nichols
emailed the Members once more, informing them that they had “ONLY THREE
DAYS LEFT TO VOTE!” Id. at 8. Nichols further noted that “[w]e need to receive
your signed ballot by midnight JULY 31, 2019,” identified a number of methods for
returning the ballots, and echoed: “WE NEED TO HEAR YOUR VOICE! A signed
ballot from each homeowner lets the POA Board know how you feel on this issue.
Your voice, each homeowner’s vote, is important.” Id. at 8.7
7 Plaintiff contends that SeaScape “reissued” ballots five times. Ballots were not “reissued,” but a copy of the ballot was reattached to several electronic communications for ease of access. 12 On July 26, 2019, Plaintiff emailed Defendants “legal notice of [Plaintiff’s]
REFUSAL TO CONSENT to the current proposed [A]mendment . . . .” PRB, Ex.
21. Plaintiff did not return a ballot on the Amendment. PRB, Ex. 15.
On August 9, 2019, a public count of the ballots was performed by three
Members, observed by the Board and several other Members. PRB, Ex. 21. Of 257
Members outstanding, 35 Members voted against the Amendment and 181 Members
vote in favor, reflecting approval by 70% of the outstanding Members. PRB, Ex.
15; see also Amend. at 1. On August 11, 2019, Association President Eileen Terry
sent a letter to the Members informing them of the results of the vote on the
Amendment. PRB, Ex. 23.
On September 11, 2019, the Amendment was recorded with the Office of the
Recorder of Deeds in and for Sussex County. Amend. at 1.
D. Procedural History Plaintiff filed the Complaint on September 25, 2020, approximately one year
after the Amendment was recorded. The Complaint was filed in two parts,
containing 150 paragraphs, three counts and 25 requests for relief. See Dkt. No. 1.
Count I of the Complaint challenges the Amendment; Counts II and III raise
unrelated grievances with the Association and SeaScape that will be addressed in a
separate report.
13 Eleven months after the Complaint was filed, on August 18, 2021, Plaintiff
filed motions to expedite and for a temporary restraining order, which the Chancellor
denied on October 15, 2021. Dkt. Nos. 34-35. The parties then engaged in
discovery. Over a period of approximately six months, Master Griffin, to whom the
case was previously assigned, resolved three motions to compel, one motion for a
protective order, one motion to supplement the Complaint and two motions to amend
the scheduling order filed by Plaintiff, and one motion for a protective order, one
motion to quash and one motion to compel filed by Defendants. See, e.g., Dkt. Nos.
77, 87, 111, 115, 125. By letter dated June 29, 2022, Master Griffin directed the
parties to combine any dispositive motions that they intended to pursue into one
omnibus motion. Dkt. Nos. 127-28.
The present Motions were filed on August 1, 2022, and briefing was
completed on September 14, 2022. This action was reassigned to me on January 10,
2023. On February 28, 2023, I held oral argument on the Motions.
II. ANALYSIS
The parties have cross moved for summary judgment. Summary judgment
will be granted if “there is no genuine issue as to any material fact and . . . the moving
party is entitled to judgment as a matter of law.” Ct. Ch. R. 56(c). “When the Court
is faced with cross-motions for summary judgment the same standard must be
applied to each of the parties’ motions and the mere existence of cross-motions does
14 not necessarily indicate that summary judgment is appropriate for one of the parties.”
Baring v. Condrell, 2004 WL 2340047, at *3 (Del. Ch. Oct. 18, 2004). “Thus when
presented with cross-motions for summary judgment a movant will be granted relief
only if the Court determines that the record does not require a more thorough
development to clarify the law or its application to the case.” Id.
Under Court of Chancery Rule 56, “[t]he movants have the initial burden of
demonstrating the absence of a material factual dispute. If the movants meet their
burden, the burden shifts to the nonmovant to present some specific, admissible
evidence that there is a genuine issue of fact for a trial.” Ogus v. SportTechie, Inc.,
2023 WL 2746333, at *9 (Del. Ch. Apr. 3, 2023) (quotation marks omitted). At that
point, “an adverse party may not rest upon the mere allegations or denials of the
adverse party’s pleading . . . .” Ct. Ch. R. 56(e).
The summary judgment standard does not change simply because Plaintiff has
appeared pro se. When reviewing submissions from a pro se litigant, like the
Plaintiff here, this Court may “exhibit some degree of leniency . . . in order to see
that [the litigant’s] case is fully and fairly heard,” but “self-representation is not a
blank check for defect.” Durham v. Grapetree, LLC, 2014 WL 1980335, at *5 (Del.
Ch. May 16, 2014) (quotation marks omitted). To comprehend and assess Plaintiff’s
claims, I have attempted to consider all of the statements made in her Complaint,
15 motion, briefs, deposition, and at oral argument; yet I cannot accept as true “mere
allegations or denials” where no material issue of fact otherwise exists.
The following analysis (1) rejects Defendants’ argument that Plaintiff lacks
derivative standing to challenge the Amendment, concluding that Plaintiff has
standing under Section 225 of the DGCL to pursue her claim; (2) considers each of
the purported procedural defects raised in Plaintiff’s papers to challenge the
Amendment; and (3) resolves Plaintiff’s contentions that the Amendment is facially
invalid. Because Plaintiff’s procedural and substantive challenges to the
Amendment are not supported by the law or the factual record, I conclude that
Plaintiff’s motion for summary judgment on Count I should be denied, and
Defendants’ motion for summary judgment on Count I should be granted.
A. Does Plaintiff Have Standing To Challenge The Amendment?
As a threshold matter, Defendants argue that Plaintiff lacks standing to
challenge the Amendment because “[s]he has not brought a derivative action against
The Glade.” Opening Br. in Support of Def. Mot. for Summ. J. on Behalf of Def. at
21, Dkt. No. 135 [hereinafter, “DOB”]. According to Defendants, Plaintiff’s claim
is derivative because the Amendment “concerns all of The Glade’s members, and if
the relief sought by [Plaintiff] is granted the effect on all of the members would be
equal.” Id. Plaintiff cannot pursue a derivative claim because she has neither
16 engaged an attorney8 nor made any attempt to satisfy the demand futility
requirements of Court of Chancery Rule 23.1. Id. at 22.
Defendants’ standing argument misses the mark. The Association is a
Delaware nonstock corporation governed, in part, by the DGCL. See 25 Del. C.
§ 81-108 (“[T]he laws of this State that apply to the association’s form of entity
apply to the association except to the extent that law is inconsistent with this chapter,
in which case this chapter governs.”); 25 Del. C. § 81-326 (“Any association that is
a Delaware corporation shall also be subject to the Title 8, which shall govern and
control to the extent not inconsistent with this chapter.”). The DGCL provides a
mechanism through which a stockholder—or in the case of a nonstock corporation,
a member—may challenge voting results. Specifically, as applied to nonstock
corporations,9 Section 225(b) provides that “[u]pon application of any [member] or
upon application of the corporation itself, the Court of Chancery may hear and
determine the result of any vote of [members] upon matters other than the election
8 See Kelly v. Fuqi Intern, Inc., 2013 WL 135666, at *7 (Del. Ch. Jan. 2, 2013) (“A derivative action may not be brought pro se.”). 9 See 8 Del. C. §114(a) (“Except as otherwise provided in subsections (b) and (c) of this section, the provisions of this chapter and of chapter 5 of this title shall apply to nonstock corporations in the manner specified in the following paragraphs (a)(1)-(4) of this section: (1) All references to stockholders of the corporation shall be deemed to refer to members of the corporation”). 17 of directors or officers.” 8 Del. C. §225(b).10 Defendants do not contest Plaintiff’s
status as a Member of the Association, or that the vote on the Amendment is a
“matter[] other than the election of directors or officers.” Accordingly, Plaintiff has
statutory standing to challenge the Amendment.
B. When does the DUCIOA apply?
Many of Plaintiff’s procedural and substantive attacks on the Amendment are
premised on purported noncompliance with the DUCIOA. Resolving those
arguments requires identifying which statutory provisions do, and do not, apply to
the Community as a pre-existing community under the DUCIOA.
“The DUCIOA states that ‘[e]xcept as provided in this subchapter,’ its
provisions apply ‘to all common interest communities created within this State’ after
its effective date of September 30, 2009.” Bragdon v. Bayshore Prop. Owners Ass’n,
Inc., 251 A.3d 661, 674 (Del. Ch. 2021) (citing 25 Del. C. § 81-116). Pre-existing
communities created prior to the September 30, 2009 effective date, on the other
hand, are subject only “to certain specified sections of the statute,” referred to herein
as “Enumerated Provisions.” Id.; see also Beck, 2020 WL 6742708, at *2 (citing 25
Del. C. § 81-119). The Enumerated Provisions applicable to pre-existing
communities include:
10 Cf. Beck v. Greim, 2016 WL 3962053, at *3 (Del. Ch. July 22, 2016) (holding pro se plaintiff had standing to challenge director removal under Section 225). 18 § 81-120 (Exception for small preexisting cooperatives and planned communities), and § 81-124 and except as limited by § 81-122 of this title hereof, §§ 81-105, 81-106, 81-107, 81-127, 81-203, 81-204, 81- 217(i), 81-221, 81-301, 81-302(a)(1) through (6) and (11) through (17), 81-302(f), 81-302(g), 81-303, 81-306, 81-307(a), 81-308A, 81-309(a), 81-310, 81-311, 81-314, 81-315, 81-316, 81-318, 81-321, 81-322 [repealed], 81-323, 81-324, 81-409, and 81-417 of this title, and § 81- 103 of this title to the extent any definitions are necessary in construing any of the foregoing sections to the extent the definitions do not conflict with the declaration . . . .
25 Del. C. § 81-119 (emphasis added).
“Other than the Enumerated Provisions, the DUCIOA does not apply to Pre-
Existing Communities at all, unless the community has opted in.” Bragdon, 251
A.3d at 674. While “the Enumerated Provisions apply to the exclusion of any
conflicting provisions in the governing documents of a Pre-Existing Community,”
the Enumerated Provisions also “do not invalidate existing provisions of the
[governing documents] that do not conflict with” the DUCIOA. Id. at 674-75
(emphasis added).
The Community here is a pre-existing community under the DUCIOA.
Therefore, challenges premised on non-compliance with provisions of the DUCIOA
other than the Enumerated Provisions cannot succeed.
C. Did the Amendment Comply with the DUCIOA’s Procedures for Actions by Ballot Without a Meeting? Plaintiff argues that the Amendment violates Section 81-310(f) of the
DUCIOA, which addresses actions taken by ballot without a meeting.
19 Plaintiff alleges that “[t]he Amendment was taken off the agenda promised
for the June 22, 2019 Annual Meeting (which issued one day before the meeting)
and the deadline to return the ballots was extended past midnight on July 31, 2019.”
Compl. ¶ 23. Although her argument is not clear, Plaintiff appears to contend that
the Amendment was initially scheduled for a vote at the June 22, 2019 annual
meeting, but the Board then changed course and decided instead to put the
Amendment to a vote by ballot without a meeting, extending “the deadline to return
the ballots . . . because not enough positive votes had been received by the deadline.”
Id. ¶ 23.
Plaintiff does not explain how this course of events violated Section 81-
310(f). Section 81-310(f), which is an Enumerated Provision, states that “[a]ction
may be taken by ballot without a meeting as follows:”
(1) Unless prohibited or limited by the declaration or bylaws, any action that the association may take at any meeting of members may be taken without a meeting if the association delivers a written or electronic ballot to every member entitled to vote on the matter. A ballot shall set forth each proposed action and provide an opportunity to vote for or against each proposed action.
(2) All solicitations for votes by ballot must: (A) indicate the number of responses needed to meet the quorum requirements; (B) state the percentage of approvals necessary to approve each matter other than election of directors; (C) specify the time by which a ballot must be delivered to the association in order to be counted, which time shall not be less than 3 days after the date that the association delivers the ballot; and (D) describe procedures (including time and size and manner) by 20 when unit owners wishing to deliver information to all unit owners regarding the subject of the vote may do so.
25 Del. C. § 81-310(f)(1)-(2) (emphasis added).
If Plaintiff means to argue that action by ballot without a meeting was not
permitted, that argument fails. Section 81-310 expressly permits action to be taken
by ballot without a meeting. Similarly, Section 14.2.1 of the Declaration permits
votes on amendments by “mail canvassing.” Declaration at Section 14.2.1.
If Plaintiff’s argument is that the Board improperly changed course by taking
the vote by mail ballot instead of at the annual meeting, that is contradicted by the
record evidence, which shows that the Board decided in March 2019 to take action
on the Amendment by mail ballot and included the Amendment on the annual
meeting agenda only as a discussion topic. PRB, Ex. 17. In any event, Plaintiff has
not explained how any supposed change in plans to conduct the vote by mail might
provide a basis to invalidate the Amendment.
Finally, to the extent Plaintiff believes the voting deadline was improperly
“extended” to July 31, 2019, this theory likewise is untenable. Section 81-
310(f)(2)(C) requires solicitation materials to “specify the time by which a ballot
must be delivered to the association in order to be counted, which time shall not be
less than 3 days after the date that the association delivers the ballot.” 25 Del. C.
§ 81-310(f)(2)(C). Section 14.2.1 of the Declaration requires that proposed
amendments be provided, “in the case of a mail canvassing, at least two weeks prior 21 to the required return date of the mailed ballots.” Declaration at Section 14.2.1
(emphasis added). While the DUCIOA and the Declaration provide a minimum time
period for receiving ballots—which was satisfied here—neither prohibits the Board
from reasonably extending the deadline to accept additional ballots.11
D. Did Improper Conduct at Board Meetings Prior to the Member Vote Render the Amendment Invalid?
Although the vote on the Amendment occurred by ballot without a meeting,
Plaintiff also argues that the Amendment should be invalidated because at Board
meetings preceding the vote, (1) Plaintiff was prevented from voicing her objections
on the Amendment, and (2) the Association President made inaccurate statements
about the Amendment.
First, Plaintiff argues that the Amendment is invalid because she was
prevented from fully voicing her objections at meetings prior to its adoption. Compl.
¶ 19. Section 81-308A of the DUCIOA, which is an Enumerated Provision, requires
that meetings of the executive board “be open to the unit owners except for executive
sessions.” That section also requires board meetings to be noticed “not fewer than
10 nor more than 60 days in advance of the meeting” with an agenda that
11 Because the parties have not submitted the June 19, 2019 solicitation materials in support of their Motions, I do not consider whether those materials otherwise comply with Section 81-310(f)(2). In any event, except as described above, Plaintiff has not argued that the solicitation materials violated the DUCIOA or the Declaration in any other respect. See Emerald Partners v. Berlin, 726 A.2d 1215, 1224 (Del. 1999) (“Issues not briefed are deemed waived.”). 22 “include[es] an opportunity for unit owners to offer comments to the executive board
regarding any matter affecting the common interest community.” 25 Del. C. § 81-
308A(b)-(c).
Plaintiff contends that when she “appropriately objected to the process,
definitions, and terms of the Amendment” at an informational meeting held on April
6, 2019, the former Association President, James Wigand, “sternly repeated her
name,” “slapped his leg as she began to speak,” and “huffed and rolled his eyes
before the Owners as she spoke.” Compl. ¶ 19. However, in making this allegation,
Plaintiff effectively concedes that she was, in fact, given an opportunity to offer
comments on the Amendment, even if her objections were ill received by the
Association President.12 This does not support a violation of the DUCIOA.
Second, Plaintiff disagrees with statements made by Wigand during the April
6, 2019 informational meeting, including that “owners’ mortgage rates could be
inflated unless owners voted to pass the Amendment,” “[t]his is the reason our
properties don’t do as well as nearby communities,” and “[w]e will continue to suffer
unless the Amendment is passed.” Compl. ¶¶ 14-15. If Plaintiff means to suggest
that Wigand’s comments misinformed the Members who voted on the Amendment,
this argument fails because a reasonable person would have recognized that
12 It also is not clear from the record that the April 6, 2019 “informational meeting” was a “meeting of the executive board” governed by Section 81-308A. 23 Wigand’s statements simply reflected his own opinions. See Smart Loc. Unions &
Councils Pension Fund v. BridgeBio Pharma, Inc., 2022 WL 17986515, at *18 (Del.
Ch. Dec. 29, 2022); Albert v. Alex. Brown Mgmt. Servs., Inc., 2005 WL 2130607, at
*3 (Del. Ch. Aug. 26, 2005). Plaintiff’s disagreement with those opinions does not
cast doubt on the validity of the vote on the Amendment.
E. Does SeaScape’s Participation in the Process Provide a Basis to Invalidate the Amendment? Plaintiff also questions the validity of the Amendment based on SeaScape’s
solicitation of ballots from Members. According to Plaintiff, the DUCIOA and the
Governing Documents require the Association’s Secretary to “issue, collect, [and]
control the ballots,” but instead, the Board improperly delegated that responsibility
to Chris Nichols at SeaScape, who “handled the voting procedures for the
Amendment voting” by “issu[ing] and re-issu[ing] ballots and solicit[ing] votes on
behalf of ‘The Board.’” Pl.’s Omnibus Mot. For Declaratory J. and Summ. J. on
Counts I, II and III Under Chancery Ct. R. 56(a), 56(c) and 57 ¶ 25, Dkt. No. 137
[hereinafter, “Pl.’s Mot.”]; see also Compl. ¶¶ 62, 64, 76.
Plaintiff’s argument fails on the law and the undisputed facts. As an initial
matter, nothing in the DUCIOA or the Governing Documents requires the corporate
secretary—as opposed to any other director, officer, or agent—to personally collect
ballots when a Member vote is taken without a meeting. Plaintiff bases her argument
on Section 81-309(a)(2), but that provision states quorum requirements; it does not
24 impose any specific obligations on the Secretary. And although the Bylaws do
impose certain duties on the Secretary—for instance, to act as clerk for, and to give
proper notice of, meetings13—the Bylaws do not address the Secretary’s role in
actions by ballot without a meeting.
In any event, the undisputed record evidence shows that in connection with
the Amendment, the Board (including the Secretary) oversaw SeaScape’s
involvement. Solicitation materials were disseminated to Members at the direction
of the Board and “[u]nder the guidance of Jennine Anderson, Secretary.” PRB, Ex.
23. The full Board, including the Secretary, observed the public ballot count.
Amend. at 1. And while SeaScape undisputedly played a role in the process, nothing
in the DUCIOA or the Governing Documents prohibits directors and officers,
including the Secretary, from seeking assistance from agents and employees in
fulfilling their corporate duties. In fact, both the DUCIOA and the Bylaws expressly
contemplate that they may do so. See 25 Del. C. § 81-302(a)(3) (authorizing the
Association to “hire . . . managing agents and other employees, agents, and
independent contractors”); Bylaws at Section 6 (empowering the Board “[t]o appoint
agents, clerks, assistants, factors, employees and trustees”).14
13 Bylaws at Sections 3, 13. 14 Plaintiff also alleges in her Complaint that Nichols’ involvement “jeopardized the fairness of The Glade elections” because in prior elections, ballots “went missing and were not available to be counted.” Compl. ¶¶ 87-88; see also id. ¶ 127 (“The voting procedure on the Amendment cannot be trusted because prior elections ignored voting standards 25 In short, Plaintiff has not identified any persuasive reason to invalidate the
Amendment based on SeaScape’s involvement with the vote.
F. Was The Amendment Approved by the Requisite Vote of the Members?
Plaintiff also contends that the Amendment was not validly approved by the
Members because (1) the vote did not satisfy the quorum requirements in Section
81-309 of the DUCIOA; (2) the Amendment did not receive sufficient votes for
approval under Section 81-217(f) of the DUCIOA; (3) ballots not signed by all co-
owners were improperly counted in the vote; (4) a ballot signed by one non-Member
was improperly counted in the vote; and (5) ballots submitted on behalf of the
Community’s common lots were improperly counted in the vote. I address each of
those arguments below.
contained in the Declaration and the Bylaws and paved the way for more non-compliant voting procedures.”). However, since reviewing the ballots in discovery, Plaintiff has not submitted evidence—or even argued—that any ballots on the Amendment went missing, or that SeaScape’s involvement changed the results of the vote in any way. Plaintiff also alleges that in a July 17, 2019 email, Nichols stated that “only positive votes count.” Compl. ¶ 79. While the meaning of this supposed statement is debatable, contrary to Plaintiff’s allegation, the document attached to her motion does not include that statement. PRB, Ex. 23. The record evidence on which Plaintiff relies contains several communications from Nichols encouraging Member participation in the vote without expressing a view on the outcome. 26 1. Quorum Requirements
Plaintiff argues that under Section 81-309 of the DUCIOA, the Member vote
on the Amendment did not satisfy quorum requirements. See Compl. ¶ 62; DOB,
Ex. C at 35:2-3 [hereinafter, “August Dep. Tr.”].
Section 81-309(a), which is an Enumerated Provision, states that:
Unless the bylaws provide otherwise, a quorum is present throughout any meeting of the association if:
(1) Persons entitled to cast at least 20 percent of the votes in the association are present in person, by proxy or by ballot at the beginning of the meeting, provided that at least 25 percent of the unit owners not related to the declarant are present; or
(2) Ballots solicited in accordance with § 81-310(f) of this title [governing action taken by ballot without a meeting] are delivered to the secretary in a timely manner by persons who, together with those persons present in person or by proxy or ballot at the beginning of the meeting, would comprise a quorum for that meeting.
25 Del. C. § 81-309(a) (emphasis added). The Bylaws increase the default quorum
requirement in the DUCIOA from 20% to 25%. See Bylaws at Section 3 (“For the
purpose of voting on any matter, the 25% quorum requirement shall consist of the
total of the number of members entitled to vote who are present in person or
represented by proxy, plus the number of absentee ballots cast on said matter.”).
Of 257 Members outstanding, 216 ballots were delivered (181 voting for, and
35 voting against, the Amendment). This represented 84% of the Members
outstanding, satisfying the 25% quorum requirement.
27 2. Vote Required for Approval
Plaintiff next argues that the Amendment failed to receive sufficient Member
votes to be approved.15
The Amendment was approved by approximately 70% of the Members
outstanding. See Amend. at 1; PRB, Ex. 15. Measured against Section 14.2.1 of the
Declaration, which requires “the affirmative vote of at least sixty six percent (66%)
of the Members of record entitled to vote,” the Amendment was approved.
Declaration at Section 14.2.1; Amend. at 1; PRB, Ex. 15. Plaintiff argues, however,
that to amend a declaration to “prohibit or materially restrict the permitted uses of
or behavior in a unit or the number or other qualifications of persons who may
occupy units,” Section 81-217(f) of the DUCIOA requires the affirmative “vote or
agreement of unit owners of units to which at least 80 percent of the votes in the
association are allocated . . . .” 25 Del. C. § 81-217(f) (emphasis added); Compl.
¶ 126.
This challenge cannot succeed because Section 81-217(f) is not an
Enumerated Provision applicable to pre-existing communities. The 80% voting
threshold in Section 81-217(f) does not apply. Section 14.2.1 of the Declaration
15 See Compl. ¶ 13 (“the DUCIOA § 217(f) requires an 80% affirmative vote ‘to materially restrict the uses or behavior in or other qualifications of persons who may occupy units’ and 100% affirmative consent ‘to change the allocated interests of a unit”). 28 controls, and the Amendment was approved by more than 66% of the Members
entitled to vote.
3. Signature of Co-Owners Plaintiff also challenges the Amendment on the basis that 28 or 35 ballots
submitted by Members who jointly own property in the Community were not signed
by all owners of the property. Pl.’s Mot. ¶ 17 (“thirty-five of the ‘Yes’ votes on the
Amendment were signed by only 1 record owner for two-owner properties”); Pl.
Jennifer August’s Omnibus Op. Br. in Supp. of her Mot. for Declaratory J. and
Summ. J. Directed to Defs. at 33, Dkt. No. 136 (“‘There are 28 invalid affirmative
votes of two-owner properties’”); PRB at 10-11; August Dep. Tr. 33:7-22.
Plaintiff’s contention appears to be that all owners of a unit are required to
vote in order for that unit’s vote to be valid. However, Section 81-310 of the
DUCIOA, which is an Enumerated Provision, provides that “[i]f only 1 of several
owners of a unit is present at a meeting of the association, that owner is entitled to
cast all the votes allocated to that unit.” 25 Del. C. § 81-310(a). Plaintiff’s argument
is also contradicted by the Bylaws, which provide that “[t]here shall be only one (1)
vote cast for each Unit,” and require that “[t]he person casting a vote with respect to
a Unit must be identified on a deed . . . as an owner.” Bylaws at Section 3 (emphasis
added). In other words, the Bylaws contemplate that one “person” identified on the
29 deed as “an owner” may cast the vote, and signatures of all other joint owners are
not required.
4. Vote of One Non-Member Plaintiff also challenges the validity of one ballot submitted by the
Association President, Eileen Terry, whom she claims does not own property in the
Community. See Compl. ¶ 12 (“the Amendment . . . was voted upon and executed
by . . . a non-owner”); Pl.’s Mot. ¶ 12 (“Eileen Terry, Glade non-owner . . . cast a
vote ‘for’ the Amendment”); August Dep. Tr. 33:1-2 (“[O]ne non-owner was
allowed to vote on the covenant amendment.”). Plaintiff is correct that only
Members could validly vote on the Amendment. Declaration at Sections 3.2.1, 3.3.
Even so, because excluding one ballot would not change the results of the vote, this
challenge cannot succeed.
5. Votes of Common Lots In her Complaint, Plaintiff alleges that “the Board self-dealt ballots for the
seven common lots in The Glade and cast affirmative votes through these
instruments . . . .” Compl. ¶ 65. Defendants explained in their verified interrogatory
responses that only two lots are owned by the Association,16 and Plaintiff did not
16 Dkt. No. 136, Ex. A (Def.’s Resp. to Pl.’s Second Set of Interrog. Directed to Def. No. 151). 30 press this argument in briefing or at argument, nor has she submitted any evidence
to support it.17
6. Verification of Signatures Plaintiff also contends that the vote on the Amendment is invalid because
signatures on the ballots were not “verified.” PRB at 11; August Dep. Tr. 36:14.
Plaintiff has not identified any statute or provision in the Governing Documents
requiring that signatures on ballots be verified, and I am aware of none.
Accordingly, this challenge also fails.
G. Is the Amendment Facially Invalid? In addition to her procedural challenges, Plaintiff also argues that the
Amendment is facially invalid.
“In asserting [her] facial challenge, the plaintiff must show that the [governing
documents’] provisions ‘cannot operate lawfully or equitably under any
circumstances.’ Plaintiff[] must demonstrate that the [governing documents’]
provisions ‘do not address proper subject matters’ as defined by statute, ‘and can
never operate consistently with law.’” Salzberg v. Sciabacucchi, 227 A.3d 102, 113
(Del. 2020).
17 The Complaint also suggests proxies issued more than three years before the vote might have been cast, Compl. ¶ 16, but Plaintiff has not pursued this argument or identified any evidence supporting it. See Emerald Partners, 726 A.2d at 1224 (“Issues not briefed are deemed waived.”). 31 The Amendment here addresses a proper subject matter under the broad,
enabling provisions of the DUCIOA and the Unit Property Act (“UPA”). Notably,
Section 81-205(b) of the DUCIOA provides that “[t]he declaration may contain any
other matters the declarant considers appropriate, including any restrictions on the
uses of a unit or the number of other qualifications of persons who may occupy
units.” 25 Del. C. § 81-205(b).18 While Section 81-205 is not an Enumerated
Provision, the UPA states, in similarly broad fashion, that “[t]he code of regulations
. . . may include other lawful provisions.” 25 Del. C. § 2208.
Accordingly, to support her claim of facial invalidity, Plaintiff must establish
that the Amendment violates the law. In an attempt to do so, Plaintiff raises two
arguments: (1) that the definition of “family” in the Amendment is discriminatory
under state and federal law; and (2) that the enforcement procedure in the
Amendment, authorizing the Association in certain circumstances to bring an action
against a tenant in the name of the property owner, violates the law.
1. Is the Amendment Discriminatory?
Plaintiff argues that the Amendment violates state and federal fair housing
laws. Citing the federal and state Fair Housing Acts, Plaintiff contends that the
18 Section 81-217(f), also not an Enumerated Provision, specifically provides that “an amendment to the declaration may prohibit or materially restrict the permitted uses of or behavior in a unit or the number or other qualifications of persons who may occupy units. The amendment must provide reasonable protection for a use or occupancy permitted at the time the amendment was adopted.” 25 Del. C. § 81-217(f). 32 Amendment “targets disabled and elderly owners and, through the definition, strips
them of their ‘Family’ status.” Pl.’s Mot. ¶ 52; see also Compl. ¶¶ 8-9.
In support of her argument, Plaintiff cites 42 U.S.C. § 3603 [Effective dates
of certain prohibitions] and 42 U.S.C. § 3607 [Religious organization or private club
exemption], but seemingly intends to allege violations of 42 U.S.C. § 3604
[Discrimination in the sale or rental of housing and other prohibited practices].
Section 3604 prohibits discrimination “against any person in the terms, conditions,
or privileges of sale or rental of a dwelling, or in the provision of services or facilities
in connection therewith, because of race, color, religion, sex, familial status, or
national origin.” 42 U.S.C. § 3604(b); see also 24 C.F.R. § 100.60; 24 C.F.R.
§ 100.70. Similarly, 6 Del. C. § 4603(b)(1) prohibits discrimination in the sale or
rental of a dwelling “because of race, color, national origin, religion, creed, sex,
marital status, familial status, source of income, age, sexual orientation, gender
identity or disability.” 6 Del. C. § 4603(b)(1). “Familial status,” under both the
federal and state Fair Housing Acts, refers to the presence of children under the age
of 18 in a household. 42 U.S.C. § 3602(k); 24 C.F.R. § 100.20; see also 6 Del. C.
§ 4602(14).19
19 Plaintiff also cites to 10 Del. C. § 901(12), which defines “Family” for purposes of the Family Court’s jurisdiction. That statute is not relevant here. 33 On its face, the Amendment does not discriminate on the basis of any of the
protected classes identified in the federal or state Fair Housing Acts. Plaintiff
contends that the Amendment “targets disabled and elderly owners” by
“prevent[ing] elderly and disabled persons from moving into a ‘family’s’ home in
the The Glade without a lease,” and by prohibiting individuals with disabilities
“from continuing to own property without leasing it to themselves.” Compl. ¶ 8.20
It does not. The Amendment provides that “[a]ll Residences shall be used only as
single family, private, residential dwellings and for no other purpose,” defining a
“Residence” as “a residential dwelling designed or occupied by not more than one
of the following as a single housekeeping unit with single culinary facilities.”
Amend. at Section 12.2.1(a). The list of permitted occupants includes “[a] Family,
defined as a group consisting of one person or a married couple with any number of
natural children, foster children, stepchildren, adopted children, parents,
grandparents and/or grandchildren.” Amend. at Section 12.2.1(a)(1). That
definition does not exclude members of a Family who may be disabled or elderly.
Permitted occupants also include “[o]ne person or two persons, one of whom shall
be elderly and/or disabled, and one or both of whom own the dwelling unit, plus one
Family.” Amend. at Section 12.2.1(a)(4) (emphasis added). That class of occupants
20 See also Compl. ¶ 8 (“The Amendment does not allow elderlies or disabled persons to simply move in with their family, illegally restricting use and dismantling prosocial notions of a common interest community.”). 34 is more—not less—inclusive than the definition of “Family,” which itself does not
exclude individuals with disabilities or who are elderly.
Accordingly, Plaintiff’s contention that the Amendment is invalid as
discriminatory fails.
2. Is the Enforcement Provision Invalid?
Plaintiff also challenges as facially invalid Section 12.2.1(b)(6) (the
“Enforcement Provision”), which provides an enforcement mechanism “[i]f any
Owner or any tenant(s) is in violation of the provisions of the governing
documents . . . .” Amend. at Section 12.2.1(b)(6). Under the Amendment, after
levying a first and second fine, “the Board may . . . bring an action in its own name
or in the name of the Owner, or both, to terminate the lease and have the tenant
evicted and/or to recover damages . . . .” Id. at Section 12.2.1(b)(6).
First, Plaintiff argues that the Enforcement Provision is “contrary to DUCIOA
§81-303(b).” Compl. ¶ 11. But Section 81-303(b) prohibits the Board from acting
on behalf of the Association “to amend the declaration or the bylaws, to terminate
the common interest community, or to elect members of the executive board or
determine the qualifications, power and duties, or terms of office of executive board
members”—it does not prohibit the Board from enforcing provisions of the
Association’s Governing Documents.
35 Plaintiff also argues that the Enforcement Provision violates Section 5703 of
the Residential Landlord-Tenant Code, which states that an eviction proceeding
before the Justice of the Peace Court “may be initiated by: (1) The landlord; (2) The
owner; (3) The tenant who has been wrongfully put out or kept out; (4) The next
tenant of the premises, whose term has begun; or (5) The tenant.” 25 Del. C. § 5703.
As Plaintiff correctly identifies, Section 5703 does not expressly permit a
homeowner’s association to initiate an eviction proceeding. On the other hand,
Section 81-302(c) of the DUCIOA authorizes an association to enforce any rights
against a tenant that the landlord could lawfully have exercised under a lease:
If a tenant of a unit owner violates the declaration, bylaws or rules of the association, in addition to exercising any of its power against the unit owner, the association may . . .
(4) Enforce any other rights against the tenant for the violation which the unit owner as landlord could lawfully have exercised under the lease or which the association could lawfully have exercised directly against the unit owner, or both.
25 Del. C. § 81-302(c).
Although characterized as a challenge to the facial validity of the Amendment,
what Plaintiff seeks in actuality is an advisory ruling on the enforceability of an
Amendment that purports to give the Association standing to pursue certain
remedies in the Justice of the Peace Court, when no such remedies have actually
been sought. “[O]ur courts do not render advisory opinions about hypothetical
situations that may not occur.” Boilermakers Loc. 154 Ret. Fund v. Chevron Corp., 36 73 A.3d 934, 959 (Del. Ch.), judgment entered sub nom. Boilermakers Loc. 154 Ret.
Fund & Key W. Police & Fire Pension Fund v. Chevron Corp. (Del. Ch. 2013). That
question is better put to the Justice of the Peace Court in a ripe controversy before
it, and does not support Plaintiff’s facial challenge here.21
Accordingly, Plaintiff’s challenge to the facial validity of the Amendment
fails.22
III. CONCLUSION
For the reasons explained above, Plaintiff has failed to present any valid
procedural or substantive bases for challenging the Amendment, nor has she
overcome Defendants’ showing, based on the undisputed record, that they are
21 I note that, under Section 203 of the DUCIOA—an Enumerated Provision—“[a]ll provisions of the declaration and bylaws are severable,” so even if the Enforcement Provision were unenforceable, that would not support a wholesale invalidation of the Amendment as Plaintiff seeks here. 25 Del. C. § 81-203(a). 22 Plaintiff also argues that the Enforcement Provision converts “lease monies to the Association . . . violating the ‘private’ and ‘independent use’ of units described in the U.P.A. §2202(19).” Compl. ¶ 10. That statute defines “Unit” under the UPA; it does not support Plaintiff’s challenge here. See 25 Del. C. § 2202(19) (“‘Unit’ means a part of the property designed or intended for any type of independent use which has a direct exit to a public street or way . . . .”). Plaintiff further contends that the Amendment changes “the allocated interests of a unit” without “unanimous consent of the unit owners.” 25 Del. C. § 81-217(d). Setting aside that Section 81-217(d) is not an Enumerated Provision, Plaintiff has not explained, and it is not apparent to me, how the Amendment has changed the allocated interests of any units. Finally, Plaintiff also argues that the Amendment creates a “nuisance,” citing 10 Del. C. § 1827, which is not a statute in our Code. Compl. ¶ 136. Plaintiff has not explained this argument, which does not create a triable issue of fact that could preclude summary judgment. 37 entitled to summary judgment on these issues. Accordingly, I recommend that
Plaintiff’s motion for summary judgment be denied, and Defendants’ motion for
summary judgment be granted, on Count I of the Complaint.23
This is a final report pursuant to Court of Chancery Rule 144. In the interests
of efficiency and judicial economy, exceptions to this report are stayed pending my
forthcoming ruling on the parties’ motions for summary judgment on Counts II and
III of the Complaint.
23 Plaintiff has also moved for a declaratory judgment pursuant to Court of Chancery Rule 57. I recommend denial of that motion for all the reasons discussed herein. 38
Related
Cite This Page — Counsel Stack
Jennifer August v. The Glade Property Owners Association, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/jennifer-august-v-the-glade-property-owners-association-inc-delch-2023.