Delaware Case Summary: State Supreme Court Rules on Applicability To Commence Subdivision Process After Enacted County Ordinances

February 2011Newsletters In the Zone

In Chase Alexa, LLC v. Kent County Levy Court, et al., 991 A.2d 1148 (Del. 2010), the Delaware Supreme Court weighed in on the issue of the applicability of various Kent County development ordinances enacted after the submittal of an application for preliminary subdivision plan approval. In reversing the decision of the Court of Chancery, the Supreme Court, applying “settled principles of statutory construction,” ruled against Kent County by finding that under Kent County Code § 187-17(D), a preliminary subdivision application submitted within six months of the developer’s preliminary conference with county officials would not have to comply with new development ordinances enacted after the date of the preliminary conference.

In connection with a proposed residential subdivision to be located on a 166-acre parcel of land in Kent County, Delaware, Chase Alexa, LLC submitted a concept plan and held a preliminary conference in May 2005 with county land use officials. During the following 10 months, Chase Alexa closed on its purchase of the property, met with land use planners and paid various fees and expenses totaling more than $700,000. In March 2006, Chase Alexa submitted a revised concept plan and held its second preliminary conference. In June 2006, four “Adequate Public Facilities Ordinances” (AFPOs) were introduced in Kent County Levy Court relating to central water supply, school capacity, traffic and emergency medical services, which proposed to require the existence of these essential public facilities in minimum standards for the approval of new developments. A month later, Chase Alexa submitted to the Kent County Planning Office its application for preliminary subdivision plan approval, and in September 2006, the Kent County Regional Planning Commission approved the preliminary plan. The four AFPOs, which provided that they would be effective retroactively to the date of their introduction in Levy Court, were enacted at various times between October 2006 and March 2007.

Although Chase Alexa was aware of the new ordinances, it believed they would not apply to its project. In April 2007, upon learning Kent County intended to apply the new ordinances to its subdivision and while continuing to obtain approvals needed to file its subdivision plan, Chase Alexa filed suit in the Court of Chancery against Kent County Levy Court, Kent County Regional Planning Commission and their members. In April 2009, the Court of Chancery decided cross motions for summary judgment in favor of Kent County, ruling Kent County Code §187-17(D) did not create a “safe harbor” for Chase Alexa’s plan and the facts did not support the developer’s claims of vested rights or equitable estoppel. The developer appealed.

The Delaware Supreme Court started its analysis by reviewing Kent County Code § 187-17 relating to the requirement of a preliminary conference in connection with major subdivision plat proposals. Code § 187-17(D) provides as follows:

D. The preliminary application must be submitted within six months of the preliminary conference meeting or another preliminary conference will be required and the project must meet all current standards.

Chase Alexa’s position was that its plan should not be subject to the AFPOs, as the plain language of § 187-17(D) protects a project from having to comply with any changes in statutes or regulations after the date of a preliminary conference as long as the preliminary application is filed within six months of the preliminary conference. Alternatively, Chase Alexa argued if the statute is deemed ambiguous, its interpretation should prevail because ambiguous zoning laws must be construed in favor of the landowner. Kent County’s position was that the developer’s reading of § 187-17(D) would lead to an absurd result of depriving the county of its discretion to adopt progressive zoning regulations in the public interest and to apply them to applications pending their review at a later stage of the approval process. In addition, Kent County argued since the statute does not expressly provide that applicants that meet the six-month requirement will not be subject to any new laws, a safe harbor should not be construed by its silence.

In analyzing initially whether the statute is ambiguous, the Supreme Court stated the fact that parties may disagree about the meaning of a statute does not create ambiguity, and if a statute is unambiguous, then the plain meaning of its language controls. The court additionally stated a statute is ambiguous only if it is reasonably susceptible of different interpretations. Concluding § 187-17(D) is plain and unambiguous, the court found that because the statute only requires applicants that miss the six-month deadline to attend another preliminary conference and comply with current standards, it follows that applicants that meet the six-month deadline need only comply with the standards in effect at the time of their preliminary conference. Further, even if the statute were deemed ambiguous, Chase Alexa’s interpretation would prevail, because if there are two reasonable interpretations of a statute, the interpretation that favors the landowner controls. Finally, noting that approval of a preliminary plan is valid for 18 months, plans must be approved by Levy Court and recorded within 24 months of preliminary approval, and construction must begin within five years from the date a plan is recorded, the court observed that under such regulatory scheme, if a developer does not take the required steps by the applicable deadlines, it will need to obtain a new approval that will be subject to any new laws.

For more information, please contact J. Breck Smith at 302.622.4208 or [email protected]