A pattern of inaction and ignored requests surrounded the Villages of Five Points association before it began imposing fines on Lewes Public Library for thousands of dollars for constructing a kiosk on library property. Correspondence shows the two sides are now on the brink of a lawsuit.
Documents shared with The Cape Gazette show that for months, the association ignored the library's request to meet about construction of a reading kiosk, well before the association levied $6,000 in fines with $50-a-day penalties over the three-door hutch where library patrons can deposit or pick up books.
Letters dating to October 2018 show a handful of requests from the library's attorney to meet with the association about the library kiosk built in March on 2 acres of library property.
In a June 27 memorandum given to three Villages of Five Points board members, the library seeks a meeting with the full board over the fines.
“Both parties will expend significant additional sums if the issues must be resolved by the courts, and the opportunity to reach a less expensive and mutually beneficial resolution will have been lost,” the memorandum states.
In letters sent since Oct. 16, 2018, Robert G. Gibbs, attorney for Lewes Public Library, has requested meetings and information. The Oct. 16 letter outlines the library's goals to eventually sell the property to offset debt incurred in building the new library in Lewes – an intention publicly made clear when the property was deeded to the library in 2012 by developer Christian Hudson as part of the Five Points development.
Before selling, however, Gibbs said deed restrictions must be removed from the property – in particular Sussex County's restriction that the property be used as a community service facility. The deed allows the library 10 years to build a facility, or the property would be transferred to a subsidiary of The Villages of Five Points Property Owners Association, which operates as a 501(c)(3) – a nonprofit category used by the Internal Revenue Service. In 2013, a certified public accountant hired by a previous association board said the association would never qualify for 501(c)(3) status.
However, John Eikrem, president of the association, said the association has applied for 501(c)(3) status, although the association's position is that it is not required in order to receive the parcel.
In order to satisfy the deed's community service facility requirement, the library decided to build a reading kiosk. Attorney Gibbs wrote in the October letter that once the library is free and clear of any deed restrictions, the library can sell to a third party. He said the library wants to eliminate the deed restrictions through the county and the association, but if need be would pursue a “quiet title action in the Court of Chancery.”
In an Oct. 24, 2018 letter to the association, Gibbs said the library was going to build a reading facility using a building permit from Sussex County. At the time, he said, both parties were engaging in good-faith negotiations, and he suggested a meeting.
By Nov. 12, however, the tone had changed as Gibbs wrote in response to the association's threat of litigation if the library built a reading facility. The Nov. 12 letter was also meant to initiate the kiosk's application process to the Villages of Five Points Architectural Review Committee – the first step needed before approval to build, according to association rules.
Gibbs asked the association to respond no later than a week.
From then on, library correspondence documents a pattern of stalling:
• Fifteen days later, the association responded with a letter requesting a $10 application fee and including an application cover sheet for the reading facility. In a Dec. 31, 2018 letter, Gibbs said a $10 check was hand delivered to the association Nov. 27, which should be considered the official application submission. Quoting the association's declaration of covenants, Gibbs said the architectural review committee failed to approve or deny the reading facility application within 30 days, and he gave them notice of failure to act.
• By January – about 60 days after the library's application filing – the application was denied because the association failed to act within a 30-day period, Gibbs wrote on March 7.
“Since the association has never followed through on its repeated representations to try to consensually resolve the disputes between our respective clients, the library exercised its rights to proceed to construct a validly permitted structure, with specific approval by Sussex County Planning and Zoning Commission of a library facility. Your client has no authority to deny the library's contractor as an association-declared trespasser,” Gibbs wrote the association attorney. “It is unfortunate that your client waited several months to follow up with further thoughts and speculation, but such delay has been a hallmark of all of your client's responses.” He again asked to meet with the association.
• A week later, Gibbs wrote requesting to meet, and opined that court action may be imminent. “We appear to be on the brink of litigation,” he said.
Two days later, Eikrem sent a memorandum to property owners in the Villages of Five Points saying the property should remain open space, and the reading kiosk and bench at the corner of the lot are illegal.
“After an exhaustive study, the [committee] denied the request, under the authority granted it by our community's Declaration of Covenants, Conditions and Restrictions,” Eikrem wrote. “This little kiosk is not a library facility. It's a cheaply made box.”
Eikrem went on to say the property should go to the Villages of Five Points, which has no interest in selling the property. “Our only interest is maintaining the beauty of our community,” he wrote.
Meeting requests continue
After receiving notification of the $6,000 fine with $50-a-day accruing fines on March 26, the library responded on April 3, protesting the fines and requesting a meeting with the board. By May 30, Gibbs wrote that the library was still waiting for a meeting.
“Again, I have not received even the courtesy of a response. This fits the association's continued pattern of nonresponses and delays,” he wrote. “The library remains committed to avoiding litigation and avoiding damage to its reputation, which comes with litigation regardless of the merits, we make this one further attempt to engage the association in nonlitigation dispute resolution.”
On June 7, Robert Valihura, association attorney, said a panel wanted to meet but only about the fines. No meeting date was set.
“My client, after full consideration of the current circumstances, wishes your client have the much delayed panel hearing, which is your client's opportunity to be heard about the penalties, held and completed before responding to the request for a meeting,” Valihura wrote.
The library's retort a week later pointed out the association's repeated lack of response, and indicated litigation may be needed to resolve the situation.
“Be assured, the library will seek the recovery of all costs and attorney's fees based upon the association's long standing and well demonstrated pattern of intentional delays, intentional interference with contractual relations and intentional refusal to negotiate issues prior to litigation,” Gibbs wrote.
Eikrem said a board committee has met with library officials concerning the fines. “The committee's recommendations will be heard by the board at its next meeting Aug. 10,” he said.
In June, the Villages of Five Points was scheduled to hold an election for its board of directors, but it was cancelled for lack of quorum, despite hundreds of residents who turned out to vote. Eikrem said the association's bylaws allow the current board to remain until the next annual meeting, to be held June 2020.