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Kuhns v. Bruce A. Hiler Delaware QPRT

Court of Chancery of Delaware

March 31, 2014

PAUL G. KUHNS and ANNE M. KUHNS, Petitioners,
PAUL G. KUHNS and ANNE M. KUHNS, Counterclaim Defendants, and THE CITY OF REHOBOTH BEACH, a municipal corporation of the State of Delaware, and GREGORY FERRESE, in his capacity as the City Manager of the City of Rehoboth Beach, Third-Party Defendants.

Submitted: December 5, 2013

Date Resubmitted: February 24, 2014

Vincent G. Robertson, of GRIFFIN & HACKETT, P.A., Rehoboth Beach, Delaware, Attorney for Petitioners, Counterclaim Defendants.

John W. Paradee and Nicole M. Faries, of PRICKETT, JONES & ELLIOTT, P.A., Dover, Delaware, Attorneys for the Respondents, Counterclaim/Third-Party Plaintiffs.

Stephen E. Smith and Glenn C. Mandalas, of BAIRD MANDALAS BROCKSTEDT, LLC, Dover, Delaware, Attorneys for the City of Rehoboth Beach and Mr. Gregory Ferrese.


GLASSCOCK, Vice Chancellor

Oh, Danny Boy, the pipes, the pipes are calling From glen to glen, and down the mountain side.[1]

The pipes in question, a water lateral likely installed in the 1920s or '30s and a sewer lateral from the 1930s or '40s, have been serving their designed purpose of carrying clean water in, and black water out, for perhaps 150 years combined. Yet their call went unheeded until recently, when the Petitioners undertook repairs and the parties discovered their existence. The pipes run from the Petitioners' yard north under the Respondents' property, along the eastern boundary of the Respondents' lot, and ultimately to City water and sewer mains. No easement of record exists in favor of the Petitioners. Given that the burden on the Respondents' lot was so minimal that it went unnoticed over the course of an average human lifetime, one might assume that mutual goodwill and neighborly regard would quickly have resulted in an agreement between the parties for use to continue. If so, one would be wildly optimistic. Instead, wearisome litigation, involving many quaint and curious volumes of forgotten lore concerning the history of public water and sewerage in the Town, and now City, of Rehoboth, ensued.[2] Cross-requests for injunctive relief were filed, and damages demanded. The result is below.


But come ye back When summer's in the meadow.[3]

The properties involved in this matter were once part of Rehoboth Heights, a residential community of summer cottages located in present-day south Rehoboth and developed by the Rehoboth Heights Development Company ("RHDC") in the early twentieth century.[4]

A. The Kuhns Property

The property owned by the Petitioners, Paul and Anne Kuhns—101 Lake Drive (the "Kuhns Property")—was designated as Lots 41 and 42 on Block 23 by the RHDC.[5] In 1925, the RHDC conveyed Lots 40, 41, and 42 to Joseph E. Way.[6] The governing deed (the "Way Deed") conveyed the land, as well as "the buildings, improvements, fixtures, ways, woods, waters, watercourses, easements, rights, liberties, privileges, hereditaments and appurtenances to [that] land[] . . . ."[7] The Way Deed also provided:

. . . that such electric lines for water and gas as have been or shall be installed in this subdivision by the [RHDC] shall remain the property of the [RHDC], and are hereby reserved to the [RHDC] and that no other lines shall be installed nor franchise granted for electric gas or water service in said subdivision without the consent in writing of the [RHDC], unless and until the [RHDC] shall have been reimbursed . . . and that the foregoing restrictions are made as a part of the consideration for this conveyance and are covenants to run with the land . . . .[8]

The Kuhns, as well as the City and City Manager Gregory Ferrese (the "City Defendants"), contend that the first house built on the Kuhns Property was constructed in the mid- to late-1920s.[9] The Hilers, however, emphasize the lack of documentation to support that assertion.[10] The original house was constructed by at least 1935.[11]

In 1942, Mr. Way conveyed Lots 41 and 42 (i.e., the Kuhns Property) to Verna Mae Ten Weeges.[12] Title to the Kuhns Property subsequently underwent a series of conveyances, including transfers in 1944, 1954, and 1978.[13] On July 25, 2008, the Kuhns purchased this property from the estate of Catherine Flickinger, who had purchased the property in November 1978.[14]

B. The Hiler Property

The Respondents, Bruce Hiler and Elaine Cacheris (referred to herein as "the Hilers"), own property at 100 St. Lawrence Street in Rehoboth Beach (the "Hiler Property"), which the RHDC identified in its plot plan as Lots 27 and 28 on Block 23.[15] The Hiler Property abuts the Kuhns Property to the north. In September 1930, the RHDC sold Lots 25 through 28 (including what is now the Hiler Property) to George Chardy.[16] Whereas the Way Deed conveyed the land, as well as "the buildings, improvements, fixtures, ways, woods, waters, watercourses, easements, rights, liberties, privileges, hereditaments and appurtenances to [that] land[], "[17] the conveyance to Mr. Chardy lacked similar language, merely conveying "all those certain lots, pieces or parcels of land . . . designated and described as follows to wit: Lots numbered twenty five (25) twenty six (26) twenty seven (27) and twenty eight (28) in Block numbered twenty three (23)."[18]Further, though the Way Deed provided ". . . that such electric lines for water and gas as have been or shall be installed in this subdivision by the [RHDC] shall remain the property of the [RHDC], "[19] the deed conveying the property to Mr. Chardy lacked similar language.

The first home built on this property was constructed in 1938.[20] Like the Kuhns Property, this property also underwent a series of conveyances, including transfers in 1941, 1972, 1973, 1990, 1998, and 1999.[21] In 1999, then-owners of 102 St. Lawrence—the original property, encompassing Lots 25 through 28— applied for a partition.[22] In March 2000, the City Commissioners approved partition of this property into two tracts, one of which is the Hiler Property.[23]

In June 2002, the Hilers purchased the property at 100 St. Lawrence Street, which consists of Lots 27 and 28.[24] The Hilers have transferred their interest in this property several times, to various trusts.[25] Currently, the owners of 100 St. Lawrence Street are Bruce A. Hiler Delaware Qualified Personal Residence Trust ("QPRT") and Elaine M. Cacheris Delaware QPRT.[26] Nevertheless, for the sake of convenience, I refer to the owners of 100 St. Lawrence Street as the Hilers.

C. The Water and Sewer Laterals at Issue

The water and sewer laterals providing these utilities to the Kuhns Property run from St. Lawrence Street, where the water and sewer mains are located, along the eastern boundary of the Hiler Property, into the northern portion of the Kuhns Property.[27] Though the exact path of the laterals under the Hiler Property is unknown, [28] they generally run from the mains on St. Lawrence Street through the eastern portion of the Hiler Property.[29] I find, based on a preponderance of the evidence, that the laterals are located entirely in the side yard setback—that is, in an unbuildable portion—of the Hiler Property.[30]

1. Water

As mentioned above, the Hiler Property and the Kuhns Property were originally part of Rehoboth Heights. In the 1920s, the RHDC advertised these lots as "Where Pine and Brine are Ever Wooing."[31] Advertisements announced:

When You Buy a Lot You are Assured of: First you are getting dollar for dollar in value for your money. Second you are assured of a delightful place in which to erect a Summer Cottage. Third, a property with a splendid view of Ocean and Lake with sidewalks, curbing, water and electric light facilities.[32]

In 1926, Rehoboth Heights was part of an annexation that extended the boundary of Rehoboth Beach southward.[33] In April 1927, following annexation, then-Mayor of Rehoboth Beach appointed a committee of Commissioners to "mak[e] a survey of the Water Mains, Valves, Fittings, Fire Hydrants[, ] etc., already installed and on the ground ready for installation in the recent annexed section known as Rehoboth Heights."[34] On April 9, 1927, the committee reported that there were 18, 080 feet of four-inch Cast Iron Class "B" Pressure Pipe, 3, 800 feet of which were "on the ground;" the remainder were already installed.[35]

Thereafter, the City acquired from the RHDC the title to "the water mains, piping and appurtenances hereinafter enumerated . . . together with all rights, privileges and franchises belonging to said Rehoboth Heights Development Company with reference to said streets, including electric light franchises, gas franchises, water franchises and all other franchises and rights now or heretofore owned by the [RHDC] . . . ."[36] The July 23, 1927 contract entered into between the City and the RHDC provided that:

This contract is to cover specifically all of the following enumerated articles: . . . said water mains having, prior to the enactment above referred to, been laid on the following streets and avenues of Rehoboth to wit: . . . on St. Lawrence Street from King Charles Avenue Westward to Bayard Avenue . . . .[37]

The contract also expressly conveyed 14, 280 feet of four-inch Cast Iron Class "B" Pressure Pipe: apparently the 18, 080 feet of pressure pipe, less the 3, 800 feet on the ground, surveyed by the committee in April 1927.[38]

Although the language of this conveyance from the RHDC to Rehoboth Beach indicates that the water main on St. Lawrence Street was in place by 1927, the installation date of the water lateral is less clear. Nevertheless, the type of material from which the lateral was constructed offers insight into when that lateral was installed. The City Defendants' expert, Water Department Superintendent Howard Blizzard, [39] explained:

As a long-time plumber in this area, you learn to recognize that certain types of pipes are associated with a certain time period. With regard to water laterals, in the 1930's all of the installed pipes were made of galvanized or black iron. By the 1940's, black iron was not used anymore and everything was galvanized. In the late 1960's, copper replaced galvanized. Finally, in the late 1970's and early 1980's, water laterals transitioned to plastic.[40]

Mr. Blizzard, who viewed the water lateral at issue in the 1990s, testified that it was galvanized.[41] He elaborates in his Expert Report "that the water lateral serving the Kuhns [P]roperty is no newer than the late 1950's. In other words, I believe that the water lateral currently serving the Kuhns [P]roperty was installed in the late 1950's or earlier."[42]

Conversely, Harry Caswell, a plumber in Rehoboth Beach, testified at his deposition that the water lateral was copper, [43] which would place the installation in the late 1960s, at the earliest. To address the discrepancy between these testimonies, the City Defendants explain that Mr. Caswell viewed the lateral from the Kuhns Property, while Mr. Blizzard viewed the pipe from the water main on St. Lawrence Street.[44] In other words, the City Defendants maintain that, from the water main to the meter, the line is galvanized, and from the meter to the Kuhns Property, the line is copper.[45] Based on this testimony, the City Defendants contend that the water lateral was updated to copper in the 1960s or 1970s.[46] The Hilers, however, dispute this "supposed upgrade."[47]

In the early 1990s, water meters were installed throughout Rehoboth Beach.[48] The water meter servicing the Kuhns Property is located on the sidewalk of St. Lawrence Street abutting the Hiler Property, as is the water meter servicing the Hiler Property.[49] Both of these meters also have "a visible 'curb stop' a few feet away toward the curb of the street."[50] However, it is not obvious that the lateral serving the Kuhns Property originates in front of the Hiler Property, as there is no indication on the water meter lid of the address to which the meter corresponds. Instead, as Mr. Blizzard explained, "[w]hen you touch it with the wand, the meter will give you the address . . . ."[51]

2. Sewer

In the 1930s, Rehoboth Beach began exploring the possible installation of a City-wide sewer system. An editorial in support of this system, appearing in the August 3, 1934 edition of the Delaware Coast News, opined that "[c]esspools in Rehoboth are out of date. They are as much a thing of the past as the horse is for travel."[52]

In August 1934, the citizens of Rehoboth voted in favor of establishing a central sewer system.[53] Following this vote, the State Legislature passed an act that authorized the Commissioners of Rehoboth Beach "to borrow money and issue bonds to secure the payment thereof, for the purpose of establishing a sewer system and sewage treatment plant and to control and regulate the same when so established."[54] After the citizens of Rehoboth voted in support of the issuance of this bond, [55] the City began preparing for the installation of a central sewer system and disposal plant.

Several citizens, including Joseph Way, then-owner of the Kuhns Property, were unhappy that the planned sewer infrastructure was to be located in front of their properties on Lake Drive. In 1936, these citizens lodged a protest with the City Commissioners, "requesting that the sewer should not be continued and not extended beyond a point on King Charles Street . . . ."[56] In response, the Commissioners adopted the following resolution:

BE IT RESOLVED, that THE COMMISSIONERS OF REHOBOTH do approve of the proposed change in the course of the sewer as set forth provided the assent of all the interested owners of land along

Silver Lake Drive and the assent of the P. W. A. to such a change can be had without cost to ...

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