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Barley Mill, LLC v. Save Our County, Inc.

Supreme Court of Delaware

March 25, 2014

BARLEY MILL, LLC, Defendant-Below, Appellant/Cross-Appellee,
v.
SAVE OUR COUNTY, INC., BARBARA FURBECK, LAWRENCE GIORDANO and THOMAS S. NEUBERGER, Plaintiffs-Below, Appellees/Cross-Appellants,
v.
NEW CASTLE COUNTY, Defendant-Below, Appellee/Cross-Appellant, and THE COUNTY COUNCIL OF NEW CASTLE COUNTY, Defendant-Below, Cross-Appellee

Submitted March 5, 2014.

Case Closed April 10, 2014.

Court Below: Court of Chancery of the State of Delaware. Civil Action No. 7151-VCG.

Christian Douglas Wright, Esquire (argued), John E. Tracey, Esquire, William E. Gamgort, Esquire, Lakshmi A. Muthu, Esquire, Young Conaway Stargatt & Taylor, LLP for Appellant/Cross-Appellee, Barley Mill, LLC.

Jeffrey S. Goddess, Esquire (argued), Rosenthal, Monhait & Goddess, P.A. for Appellees/Cross-Appellants, Save Our County, Inc., et al.

Sidney S. Liebesman, Esquire (argued), R. Montgomery Donaldson, Esquire, Lisa Zwally Brown, Esquire, Montgomery, McCracken, Walker & Rhoads, LLP, for Appellee/Cross- Appellant, New Castle County.

Before STRINE, Chief Justice, HOLLAND, BERGER, and RIDGELY, Justices, and VAUGHN, President Judge,[*] constituting the Court en Banc.

OPINION

Page 52

STRINE, Chief Justice:

I. Introduction

Barley Mill, LLC (" Barley Mill" ) appeals from a Court of Chancery judgment invalidating a vote of the New Castle County Council (the " Council" ) on a rezoning ordinance. Approval of the rezoning ordinance was necessary so that Barley Mill could proceed with its plan to transform property that had been used as an office park into a much larger development that included both more office space and a regional shopping mall. The increase in traffic that would be associated with this development was of considerable concern to both the public and members of the Council itself. But the Council was advised that (i) it could not obtain the traffic information and analysis (for ease of reference, the " Traffic Information" ) that Barley Mill was required to provide to the Delaware Department of Transportation (" DelDOT" ) under 9 Del. C . § 2662 (" § 2662" ) as part of the overall rezoning process before the Council exercised its discretionary authority to vote on the rezoning ordinance and (ii) that the Traffic Information was not legally relevant to the Council's analysis. That advice was incorrect and there were no legal barriers that prevented the Council from obtaining the Traffic Information or considering it before casting its discretionary vote on the rezoning ordinance.

After the rezoning ordinance was approved, nearby resident homeowners and

Page 53

Save Our County, Inc. (" Save Our County" ) challenged the zoning ordinance in the Court of Chancery arguing that, not only was the Council allowed to consider the Traffic Information, but both § 2662 and the New Castle County Unified Development Code (the " UDC" ) required it to consider that information before its discretionary vote. They also argued that, even if the Council was not required to consider the Traffic Information before its discretionary vote, the vote on the rezoning ordinance was arbitrary and capricious because the Council had received erroneous legal advice that the Traffic Information was both unavailable and irrelevant at the time the Council cast its discretionary vote on the rezoning ordinance. As a result, the Council voted in the absence of material information that certain Council members had expressed a desire to have before the discretionary vote took place. The Court of Chancery agreed with this claim and held that the mistake of law caused the Council to vote without first obtaining the Traffic Information that was material to its vote, rendering that vote arbitrary and capricious.

On appeal, Barley Mill argues that the Court of Chancery erred when it invalidated the Council's vote. Save Our County and New Castle County cross-appealed, arguing that the Court of Chancery erred in holding that neither § 2662 nor the UDC require the Council to consider a traffic analysis before casting its discretionary vote on the rezoning ordinance. The interplay of § 2662, the UDC, and Barley Mill's rezoning application has given life to a variety of legal questions. But the one that ultimately formed the basis of the Court of Chancery's ruling was whether the Traffic Information was legally available to the Council before it cast its discretionary vote on the rezoning ordinance. That is, regardless of whether the Traffic Information was required to be completed and delivered to the Council before it cast its discretionary vote on the rezoning ordinance, was the Council allowed to obtain the Traffic Information before that vote?

The Court of Chancery grounded its finding that the Council's vote was arbitrary and capricious on the conclusion that, as a result of incorrect legal advice, Councilman Robert Weiner cast his discretionary vote on the rezoning ordinance without the benefit of the Traffic Information that was material to the Council's consideration of whether to approve the rezoning. The Court of Chancery's determination was supported by the following findings of fact and law: (i) the Council was told, by Barley Mill's attorney and by the manager of the New Castle County Department of Land Use (the " Planning Department" ), that the Council could not obtain or consider the Traffic Information before the Council exercised its discretionary vote on the rezoning ordinance; (ii) that advice was incorrect and there were no legal obstacles that prevented the Council from obtaining and considering the Traffic Information; (iii) that mistaken legal advice caused members of the Council to vote without the Traffic Information, which was material and relevant to their decision; and (iv) the mistake of law tainted the final vote because the ordinance passed by only a seven-to-six vote and Councilman Weiner's affirmative vote was necessary to its adoption. Each of those findings was correct, and thus, we affirm.

Because we affirm the Court of Chancery's decision on that basis, we do not reach the claims raised by Save Our County and New Castle County on cross-appeal that the Court of Chancery erred in holding that neither § 2662 nor the UDC require the Council to consider a traffic analysis before voting on a rezoning ordinance. Precisely because we acknowledge the importance

Page 54

of these open legal issues, we affirm the Court of Chancery on the narrow and case-specific grounds discussed below and therefore do not reach those substantial questions, leaving them for the appropriate legislative bodies to consider in the first instance, or for later judicial resolution in a case where answering them is necessary.

II. Factual And Procedural Background

We base our discussion on the facts as found by the Court of Chancery in its opinion, which were well-supported by the record.[1] In September 2007, Barley Mill purchased Barley Mill Plaza, 92 acres of land at the intersection of State Routes 141 and 48 (the " Property" ). The Property has been used as an office park since the 1980s, with the primary occupants being units of the DuPont Company. The Property contains over 1,000,000 square feet of low rise office space and no retail stores. In 2008, Barley Mill submitted an application to the Planning Department to redevelop the Property (the " First Plan" ). The First Plan contemplated demolishing all of the existing office buildings and constructing approximately 700,000 square feet of residential space, 675,000 square feet of retail space, and 1,485,000 square feet of office space on the Property. The First Plan would have more than doubled the square footage of the buildings on the Property, and much of that additional space was to be used for retail stores. The First Plan was consistent with the Property's then-existing zoning status as Office Regional and no rezoning would have been required.

Members of the community were strongly opposed to the First Plan because, among other reasons, it involved transforming a relatively quiet office park into a complex that contained both a regional shopping mall and a more substantial office park, with corresponding effects on traffic and the nature of the surrounding community. In 2010, Barley Mill entered into a negotiated agreement with Citizens for Responsible Growth -- one of the organizations representing the community opposition -- that addressed some of the community's concerns regarding both the First Plan and other large development projects that were being undertaken in the area. Under the agreement, Barley Mill agreed to submit a revised plan for the Property with reduced development (the " Second Plan" ) and, in exchange, Citizens for Responsible Growth agreed not to oppose the Second Plan. The Second Plan was submitted to the Planning Department on March 24, 2011. The Second Plan reduced the overall square footage of the development and eliminated the residential component, but it still included a regional shopping mall, sites for free-standing restaurants and other businesses, and an expanded office complex. Because the Second Plan did not include a residential component, it could only proceed if New Castle County rezoned approximately 37 acres of the Property from Office Regional to Commercial Regional.

From the inception of the County's process to consider the rezoning application for the Second Plan, the interplay of New Castle County's Unified Development Code (the " UDC" ) and § 2662 gave rise to important legal questions. Under the UDC, the rezoning process that governed Barley Mill's application involved three stages. In the first stage, the Exploratory Stage, the Planning Department reviews

Page 55

the rezoning application, familiarizes the applicant with the rezoning process, confers with the applicant, and issues a preliminary report identifying concerns related to the application and listing any other information that the applicant needs to file.[2] During the second stage, the Rezoning/Preliminary Plan Stage, the Planning Department and the Planning Board -- a New Castle County administrative body -- hold public hearings and make recommendations to the Council and, if the Planning Department recommends approval, the Council introduces a rezoning ordinance, holds a public hearing, and votes on the ordinance.[3] The second stage is a critical one because it is the last stage where the Council has genuine policy discretion to turn down a rezoning based on the factors it may consider, which include the effect a rezoning will have on traffic. After the Council casts its discretionary vote and approves a rezoning ordinance, the plan proceeds to the third stage of the rezoning, the Record Stage. After the plan has entered the Record Stage, the Council's authority is purely ministerial.[4] In other words, even if a traffic analysis indicating that the rezoning would have a detrimental ...


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