Supreme Court hears Ruddertowne challenge

A group of Dewey Beach property owners sought to stop construction of the 45-foot mixed-use development at Ruddertowne, but they may have waited too long to challenge the document that allowed construction to begin.

A panel of Delaware Supreme Court Justices heard oral arguments April 10 in the case of town property owners against Dewey Beach and Ruddertowne developer Dewey Beach Enterprises.

Property owners Tony Murray, Charles McKinney, David Kaminsky and Elizabeth Cadell filed the initial lawsuit Aug. 15, 2011, challenging the validity of an agreement between the town and the developer.  The Feb. 26, 2011 agreement allowed DBE to build in excess of a townwide, 35-foot height limit in exchange for certain amenities, such as designated town space, public restrooms and a baywalk.

Chancery Court Vice Chancellor John Noble dismissed the initial complaint May 31, 2012, siding with DBE attorney Shawn Tucker, who argued property owners did not file the appeal of the Ruddertowne decision within 60 days – the legal deadline.

The property owners asked Noble to reconsider the case in a motion for reargument, but Noble denied the motion in July 2012.

On Aug. 30, 2012, the property owners appealed to Delaware Supreme Court.

In oral arguments, Michael McDermott, attorney for the property owners, said the 60-day statute of repose is valid only for ordinances and amendments to ordinances.  The Ruddertowne agreement was approved by resolution.

McDermott said the agreement constituted contract zoning, and no changes were enacted to the town’s comprehensive plan or zoning code.  “A contract is not an enactment,” he said.

The property owners are challenging a contract, so they should not be barred by the 60-day statute, he said.

The agreement between the town and DBE scheduled a final public hearing in June 2011 to discuss amenities included in the agreement, McDermott said.  The initial complaint was filed within 60 days of the June 2011 public hearing.

Tucker argued the agreement was a legislative action susceptible to the 60-day statute of repose.  “This is not contract rezoning,” Tucker said.  “This in fact was a regulation.”

Tucker said the process DBE and the town used to approve the agreement was consistent with section of Delaware Code that mandates a 60-day deadline for a legal challenge.

According to Delaware Code, the legislative action must be published in a general circulation newspaper, and then opponents have 60 days to challenge the action.

In addition to the public notice, Tucker said, DBE and the town provided a public hearing, as required by the Dewey Beach Comprehensive Plan, and three separate public workshops that were not required.  “They did know about it; they did participate,” Tucker said of the plaintiffs.

In their initial claim, the property owners argued they attempted to appeal the decision to the town’s Board of Adjustment, but former Town Manager Diana Smith failed to send the appeal to the board, leaving them with no adequate remedy at law.

During oral arguments, Megan Mantzavinos, attorney for Dewey Beach, said the property owners should have appealed to Superior Court for a Board of Adjustment hearing.  She said the board would have then been able to review Building Inspector Bill Mears’ approval of the plat plan and issuance of a building permit for Ruddertowne.

Chief Justice Myron Steele said the Board of Adjustment and the building inspector could have held the building permit, but neither could have overturned an agreement signed by town council.  “If you can’t challenge the fundamental underpinning…what’s the point?” Steele asked.  “How is it an adequate remedy at law?”

Mantzavinos said the property owners’ goal was to stop construction, which could have been accomplished if the board of adjustment denied a building permit for Ruddertowne.  She said if the real issue was the legality of the agreement, the plaintiffs had 60 days to challenge it, and they did not.

Justices left the courtroom after more than one hour of arguments.  Steele said only they would consider the information presented by both parties.  Not date is set for a decision to be issued.