JACK W. LAWSON and, MARY ANN LAWSON, Defendants Below, Appellant,
STATE OF DELAWARE, upon the Relationship of the Secretary of the DEPARTMENT OF TRANSPORTATION, Plaintiffs Below, Appellee
Submitted January 29, 2014
Motion for Reargument filed 4/30/14.
Case Closed May 9, 2014.
Court Below: Superior Court of the State of Delaware, in and for New Castle County. C.A. No. N12C-01-128.
Richard L. Abbott, Esquire (argued), Abbott Law Firm, Hockessin, Delaware for Appellants.
Gregory B. Williams (argued), Austen C. Endersby (argued), and Wali W. Rushdan, II, Esquires, Fox Rothschild LLP, Wilmington, Delaware, for Appellee.
Before HOLLAND, BERGER, and JACOBS, Justices.
By Opinion dated July 22, 2013, this Court ordered the dismissal without prejudice of a condemnation proceeding instituted in the Superior Court by the plaintiff-below/appellee, the State of Delaware Department of Transportation (" DelDOT" ), against the defendants-below/appellants, Jack and Mary Ann Lawson (the " Lawsons" ). Thereafter, the Lawsons moved in the Superior Court proceeding for an award of litigation expenses and costs, which the Superior Court denied by order dated September 25, 2013. The Lawsons appeal from that order. They claim entitlement to reimbursement for the litigation expenses they incurred by virtue of the condemnation proceeding, under both the Real Property Acquisition Act, and the
common law bad faith exception to the so-called " American Rule." They also claim that they are statutorily entitled to an award of costs.
This appeal requires us to construe, for the first time, certain language in 29 Del. C . § 9503, the reimbursement provision of the Real Property Acquisition Act (the " Act" ). We hold that that provision requires reimbursement for litigation expenses related to a condemnation proceeding where a court determines that the subject property cannot be acquired by the governmental entity's particular exercise of its underlying eminent domain power in that specific proceeding. Accordingly, we determine that the Superior Court erred by denying the Lawsons' motion for litigation expenses under 29 Del. C . § 9503. We also conclude, however, that the Superior Court correctly determined that the Lawsons were not entitled to litigation expenses under the bad faith exception to the American Rule. Finally, we hold that the Superior Court erred by not addressing the Lawsons' application for costs.
We therefore affirm in part, reverse in part, and remand the case to the Superior Court to determine the litigation expenses and costs to which the Lawsons are statutorily entitled.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The Lawsons own approximately ten acres of real property located at 323 Strawberry Lane in Middletown, Delaware. That property is zoned as " CR, Regional Commercial District," although the Lawsons currently use the property for their single-family residence--a legal nonconforming use. Were the Lawsons to develop their property for commercial use (as the property's zoning designation permits), they would need to widen the property's current 12-foot-wide driveway to obtain the requisite DelDOT commercial entrance permit.
Beginning in 2010, DelDOT sought to acquire approximately 1.51 acres of the Lawsons' property to construct a storm water management pond parallel to Strawberry Lane. The acreage DelDOT sought to acquire included all the Lawsons' property that fronted Strawberry Lane. That acquisition, if agreed to, would leave the Lawsons without access to the road. To resolve that problem, DelDOT planned to build a raised berm across the storm water management pond, over which it would construct a new 12-foot-wide driveway for the Lawsons.
In December 2010, DelDOT obtained an appraisal of the Lawsons' property that valued the fee interest at $130,000. That appraisal was calculated by subtracting the estimated post-taking fair market value of the Lawsons' property ($420,000) from that property's ...