State of Delaware DelDOT v. PITB, LLC and Stafford Street Capital, LLC

• Court: Superior Court of Delaware
• Decided: August 20, 2025
• Docket: S21C-07-016 MHC
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

The STATE of Delaware, UPON the ) RELATION OF the SECRETARY OF the ) DEPARTMENT OF TRANSPORTATION, ) ) Plaintiff, ) v. ) ) PITB, LLC, a Delaware Limited Liability ) Company, 185, 651.4503 Square Feet ) (4.262 Acres) of Land; All of Tax Map and ) Parcel Number 235-8.00-83.00 Situate in ) Broadkill Hundred, ) ) C.A. No. S21C-07-016 MHC and ) ) Stafford Street Capital, LLC, a Delaware ) Limited Liability Company; 11,000.00 ) Square Feet (0.2525 Acres) of Number ) 235-8.00-83.00 Situate in Broadkill ) Hundred, ) ) Defendants. )

ORDER

Submitted: June 3, 2025 Decided: August 20, 2025

Plaintiff’s Filing Regarding Accrual of Interest

Bradley S. Eaby, Esq., Deputy Attorney General, Department of Justice, 800 South Bay Road, Dover, Delaware 19901, Attorney for Plaintiff DelDOT John W. Paradee, Esq., and Mark Denney, Esq., Baird Mandalas Brockstedt & Federico LLC, 6 South State Street, Dover, DE 19901, Attorney for Defendant PITB, LLC Richard A. Forsten, Esq., and Pamela J. Scott, Esq., Saul Ewing LLP, 1201 Market Street Suite 2300, Wilmington, DE 19801, Attorney for Defendant Stafford Street Capital, LLC.

CONNER, J

This Order addresses the post-trial issue between Plaintiff Delaware

Department of Transportation (“DelDOT”) and Defendant PITB, LLC regarding the

accrual of interest on the confirmed award of just compensation. Pursuant to 10 Del.

C. § 6110(a), DelDOT made an initial deposit of $1,483,300 as its estimated just

compensation for the property taken in this case. After a four-day trial,

commissioners awarded Defendant PITB, LLC with $4,670,000 and Defendant

Stafford Street Capital, LLC with $345,000 for their respective interests in the

property taken. The parties agree the legal rate of interest in this case is 5.25% per

annum. However, the parties disagree whether interest on DelDOT’s initial deposit

before the final award, totaling $49,907.75, should be credited to DelDOT. This

Court finds that Plaintiff DelDOT should be credited for the $49,907.75 of deposit

interest.

Section 6113 of Title 10 provides that for condemnation actions, “[i]nterest

shall accrue on the award from the date of taking possession or from the date of the

award, whichever first occurs.” Section 6110 of Title 10 provides that “[i]f the

compensation finally awarded to any defendant exceeds the amount paid to the defendant on distribution of the deposit, the Court shall credit the payment to the

final award. . . .” Defendant PITB, LLC reads this provision narrowly to only allow

Plaintiff DelDOT to credit the principal amount of the deposit, and not any

corresponding interest that the deposit would accrue once it was out of DelDOT’s

hands. To support this reading, Defendant PITB, LLC cites the Delaware Supreme

Court in Wilmington Housing Authority v. Nos. 401, 403, 405 East Seventh Street,

“[i]n the ordinary case, after making the deposit, the condemnor no longer has any

real interest in it.”1 In PITB’s view, since the condemnor no longer has any rights

to the deposit, the condemnor accordingly has no rights to the interest accrued on

that deposit and therefore should not be credited for that interest.

However, the ultimate holding of Wilmington Housing Authority v. Nos. 401,

403, 405 East Seventh Street is that “. . . a condemnee was not intended to receive

interest on that final award previously paid into Court but not withdrawn by him. . .

where the owner makes no effort to withdraw the deposit and shows no reason for

not having attempted to do so.”2 The Delaware Supreme Court explains that 10

Del.C. § 6110(b) allows the owner to withdraw the deposit without being deprived

of any rights of appeal or of proving a greater amount of compensation.3 Thus, there

is “. . . no reason why the condemnor should be penalized simply because the owners

1 195 A.2d 392, 395 (Del. 1963). 2 Id. at 396. 3 Id. failed to ask promptly for withdrawal.”4 This holding was expanded in State ex rel.

State Highway Department v. 14.69 Acres of Land, More or Less, finding that a

condemnor should not be penalized for an owner electing to partially withdraw a

deposit, and thus an owner is not entitled to interest on funds it chose not to

withdraw.5

Section 2301 of Title 6 has been construed as only providing for simple

interest.6 Accordingly, receiving interest on unpaid interest, i.e. compound interest,

is not permitted under Delaware law.7 By asking this Court to not credit Plaintiff

DelDOT for the interest on the deposit, Defendant PITB LLC is attempting to

recover the deposit interest both from the prothonotary and from DelDOT directly.

Plaintiff argues that this is interest on interest, attempting to receive the same simple

interest two times. Plaintiff is correct that Defendant is only entitled to one amount

of simple interest, not double.

Plaintiff has directed this Court’s attention to the Pennsylvania Court of

Common Pleas case of In re Buckwalter Condemnation by Manheim Township

4 Id. The Delaware Supreme Court explicitly limited the holding by noting that “[i]f withdrawal should be denied because of some interest of the condemnor,—a situation hard to conceive—we would have a case completely different than exists here.” Id. However, that does not apply to this case. 5 245 A.2d 788 (Del. 1968). 6 Weinberger v. UOP, Inc., 517 A.2d 653, 657 (Del. Ch. 1986) (citation omitted); see 6 Del. C. § 2301. 7 Rehoboth Marketplace Assocs. v. State ex rel. Sec’y of Dep’t of Transp., 625 A.2d 279 (Table) (Del. 1993) (citing Weinberger, 517 A.2d at 657). School District, which credited the condemnor for the interest accrued on deposit

money for multiple reasons.8 First, it is supported by Nichols on Eminent Domain,

which recognizes the deposited money as the condemnee’s property even during the

pendency of a potentially unsuccessful appeal.9 Second, the deposit of estimated

just compensation qualifies as property subject to the “taking clause” of the

Constitution and the earnings on the funds deposited are an incident of ownership of

that property.10 Thus, the interest is subject to the same constitutional rules as the

principal.11 Third, payment to the court amounts to a constructive payment to the

owner, and thus income on the deposit belongs to that same owner.12 Finally, not

crediting the condemnor would result in a potential windfall of duplicate payment.13

This Court is bound by existing Delaware law to treat the deposit as the

property of the condemnee; that a condemnee may not receive interest on funds

deposited into the Court that the condemnee chose not to withdraw; and to only

award simple interest once. This Court is further persuaded by Pennsylvania’s

various justifications for why the condemnor should be credited for the interest on

8 See In re Buckwater Condemnation by Manheim Twp. Sch. Dist., 1991 WL 338315 (Pa. Com. Plse. Mar. 25, 1991). The Buckwalter condemnor had an interest in the property to be condemned, like the carveout in Wilmington Housing Authority (see supra n. 4), but the Pennsylvania Court of Common Pleas dismissed this fact when the condemnors did not exercise that right. Id. at *2. As that interest is not present here and was dismissed in Buckwalter, the analysis is not distinguishable on this point. 9 Id. at *1 (citing Nichols on Eminent Domain, Revised Third Edition, Vol. 3). 10 Id. at *2. 11 See id. at *2. 12 Id. at *3. 13 See id. at *3. the initial deposit on a condemnation action. Thus, this Court credits DelDOT

$49,907.75 for the interest accrued on the money initially deposited.

IT IS SO ORDERED.

/s/ Mark H. Conner Mark H. Conner, Judge

oc: Prothonotary