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State v. Middletown Development, Inc

Superior Court of Delaware, New Castle

March 10, 2015

STATE OF DELAWARE, upon the Relation of the Secretary of the DEPARTMENT OF TRANSPORTATION Plaintiff,
v.
MIDDLETOWN DEVELOPMENT, INC., a Delaware Corporation; 5.6080 ACRES OF LAND, more or less, as a Fee Simple Taking, situate in the Town of Middletown, New County, Delaware; 0.0221 ACRE OF LAND, more or less, as a Temporary Construction Easement Taking, situate in the Town of Middletown, New Castle County, Delaware; and MIDDLETOWN APARTMENTS PHASE I, LLC, a Delaware Limited Liability Corporation, Defendants.

Submitted: February 18, 2015

Upon Plaintiff’s Motion for Possession, GRANTED.

Upon Defendants’ Motion to Dismiss, DENIED.

Gregory B. Williams, Esquire, Fox Rothschild LLP, Wilmington, Delaware, Attorney for Plaintiff.

L. Vincent Ramunno, Esquire, Ramunno & Ramunno, P.A., Wilmington, Delaware, Attorney for Defendants.

OPINION

PAUL R. WALLACE, JUDGE.

I. Introduction

The Delaware Department of Transportation ("DelDOT") instituted condemnation proceedings against Middletown Development, Inc. and the properties to be taken (collectively "Middletown Development"). DelDOT now moves for an entry of an order granting it possession of the property. Middletown Development opposes the possession motion and moves to dismiss the condemnation action claiming that DelDOT failed to reasonably negotiate in good faith, as required under Delaware's Real Property Acquisition Act ("RPAA"). For the reasons set forth below, DelDOT's motion for possession is GRANTED, and Middletown Development's motion to dismiss is DENIED.

II. Factual and Procedural Background

The property ("Property") at issue is part of roughly 17 acres of real estate that Middletown Development owns in Middletown, Delaware. Middletown Development owns some surrounding tracts that it has developed, but the entire 17-acre parcel remains undeveloped and a source of controversy between Middletown Development and DelDOT.

In 2004, Middletown Development attempted to subdivide and rezone the 17-acre parcel of which the land DelDOT seeks is a part.[1] According to Middletown Development, the Town of Middletown denied its request and informed it that DelDOT might require a portion of that parcel for a proposed U.S. Route 301 project ("301 Project"). In 2006, and again in 2007, principal in and now counsel for Middletown Development, L. Vincent Ramunno, wrote to DelDOT to determine what, if any, portion of its 17-acre parcel DelDOT planned to condemn and take. DelDOT responded in 2007, stating that it was uncertain how much, if any, of Middletown Development's property it might need to condemn for the 301Project.[2]

Mr. Ramunno apparently again inquired about DelDOT's Route 301 project in June 2010, claiming that DelDOT had previously informed him they would be using the entire parcel for stormwater facilities. DelDOT's November 2010 response letter indicated it was unable to locate any person, minutes, or records substantiating Mr. Ramunno's claim.[3]

DelDOT made its appraisal and first offer for the Property in 2012. The Negotiation Record and Affidavit of DelDOT Real Estate Representative Robert Palandrani reflects that in a letter dated July 26, 2012, DelDOT offered to purchase the 5.6080 acres (and temporary construction easement) needed from Middletown Development for its appraised fair market value of $352, 025. The appraisal attached to the letter was prepared by an independent fee appraiser. DelDOT proposed to acquire a fee acquisition for $350, 500, "Damages to the Remainder" for $1, 175, and a temporary construction easement for $350.[4] An August 15, 2012 log note in the Negotiation Record indicates that DelDOT and Mr. Ramunno discussed the offer over the phone. The note further indicates Mr. Ramunno told Mr. Palandrani the offer was "fair" but that he believed DelDOT should purchase the entire 17-acre parcel.[5]

The parties corresponded from July 2012 through August 2014 about DelDOT's proposed acquisition.[6] At several points throughout the correspondence, DelDOT noted in the log that it believed the parties had reached an "impasse" in negotiations.[7] This was apparently due, in part, to Mr. Ramunno's claim that the Department had inversely condemned the entire parcel by preventing him from developing it.[8] It was not until May 14, 2014, that Middletown Development provided DelDOT with a counter offer of $1, 147, 000, based on its own appraisal. DelDOT then increased its offer to $390, 000 on August 11, 2014. Middletown Development rejected that offer as "totally inadequate and unacceptable."[9]

DelDOT[10] instituted condemnation proceedings on October 31, 2014, by filing a complaint against Middletown Development, Inc., 5.6080 acres of land as a taking in fee simple, 0.0221 acre of land as a temporary construction easement taking, and Middletown Apartments Phase I, LLC.[11] On November 5, 2014, DelDOT filed a Motion for Possession of the Property to be taken in condemnation, attaching a notice of the motion and an affidavit of necessity. A Certificate of Deposit was filed on ...


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