Judge hears arguments in BeachWalk case

A Delaware Court of Chancery judge is awaiting closing arguments before making a decision in the long-running case of the BeachWalk project, a proposed 63-unit condominium development in Rehoboth Beach.

Judge Sam Glasscock heard arguments in Georgetown July 23 over the timeline of the case, which stretches back to 2008, when Keith and Mary Beth Monigle, owners of the Rehoboth Beach Plaza shopping center, began exploring redeveloping the parcel. Inspired by the Cottages at Philadelphia Place, an eight-unit condo development on Philadelphia Street, the Monigles filed plans for BeachWalk in June 2015, which includes 58 single-family detached units and five multifamily units.

Keith Monigle served as the primary witness during the trial, which was based around the question of how much he relied on the city code and the statements of city officials before he filed plans with the city. The city argued that Monigle didn’t rely on the good faith of the code before he filed because he did not read it. 

In his testimony, Monigle gave a full timeline of events. He bought a stake in the property in 1996, and a few years later, he bought out his partner and became sole owner. In 2008, he said the site was in need of updating and he began exploring his options, whether that be updating the shopping center or a residential development. Monigle said he determined that a residential development would be a better fit for the location, would be quieter and require less parking. He said a residential development could also include amenities like a clubhouse and a pool. 

Monigle said he decided to build a condominium development around 2012 because the majority of the residents would likely be retirees or second homeowners. He said he was advised by his attorney at the time, Rob Robinson, that a condo development would only need site-plan review by the city, not a subdivision plan, which would be a lengthier process. Monigle intended to build the complex on a single lot. 

He said he consulted with realtor Kathy Newcomb, who met with then-city building inspector Terri Sullivan to determine if a condo project could be done. Monigle testified that correspondence between Newcomb and Sullivan indicated to him that the project could be done.

In early 2014, Monigle said, Rob Robinson left private practice to work for the Public Defender’s Office, and Dennis Schrader came on as his attorney. Monigle said Schrader met with City Solicitor Glenn Mandalas, following which, Schrader sent Monigle an email that said “Met with Mandalas, says condominium is not a subdivision. Have a ball.” 

In June 2015, plans were submitted to the city. The next month, Monigle said Sullivan made comments on the project but did not indicate to him that the project was a subdivision. But in August 2015, Sullivan left and was replaced by Dam Molina. Toward the end of 2015, Molina ruled that BeachWalk could not move forward after he determined that more than one building could not be built on a lot. That ruling was based on a footnote in the city’s table of use regulations. 

Schrader and Monigle appealed Molina’s decision to the board of adjustment, which determined in May 2016 that the city’s code was ambiguous and overruled Molina’s decision. 

The lawsuits started in February 2018, after the city commissioners upheld the planning commission’s decision that BeachWalk was a subdivision. A suit in Delaware Superior Court ended when Judge E. Scott Bradley denied the city’s motion to dismiss and remanded the matter back to the city for further review. A second lawsuit was filed in Chancery Court after the city tried to enforce an ordinance on BeachWalk that stated only one building can be built on a lot, an ordinance that was passed after BeachWalk filed its application. Monigle and his trial attorney, Richard Forsten, argued that the city could not enforce the ordinance because he had vested rights; in other words, he was grandfathered in. 

In April, Glasscock mandated a trial, which was held in person July 23. 

During cross-examination of Monigle, city attorney Max Walton sought to establish that Monigle did not rely on knowledge of the code or of Delaware’s Uniform Common Ownership Interest Law, which regulates the uses of condominiums, among other types of residential development. Under questioning, Monigle testified that he did not know if he looked at DUCOIA or the city’s table of use regulations. On the latter point, Monigle had earlier testified that he and his team had read the code many times prior to submission. When asked by Walton how he couldn’t have been aware of the footnote preventing more than one building on a single lot, Monigle said he did not think it was part of the code. 

When Walton asked whether one of Monigle’s previous attorneys, Michael Smith, had advised him that he should look at whether a subdivision would be required, Monigle said he did not recall. Walton also asked why Monigle did not show city officials sketches and plans for the development prior to submission. Monigle said he did not because once he did so, the plans would have become public before his current tenants became aware of what he was planning to do. Walton said other evidence Forsten and Monigle submitted, such as Newcomb’s correspondence, did not address the BeachWalk property specifically. 

Additional witnesses included Newcomb, who testified to her discussions with Sullivan on Monigle’s behalf, and Schrader, who testified about his discussions with Mandalas over whether BeachWalk was a subdivision. While further witnesses were queued up, both attorneys decided not to call on them because their testimony would be redundant.

Forsten and Walton will submit closing arguments in writing to Glasscock, who will then weigh all the evidence for his decision. The timeframe of both of those events is still undetermined, as Walton wanted a copy of the trial transcript before submitting his arguments.