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Bay Breeze Estate Homeowners Assoication Inc. v. Dunham

Court of Chancery of Delaware

February 27, 2017

Bay Breeze Estate Homeowners Assoication, Inc. Plaintiff,
v.
Charles E. Dunham and Lynda R. Dunham Defendants.

          Submitted: November 7, 2016

          Draft Report: February 13, 2017

          MASTER'S REPORT

         A homeowners association ("HOA") filed a complaint under 10 Del. C. § 6501 et seq. and 10 Del. C. § 348 alleging that two homeowners are in violation of an amended deed restriction because they parked a motor home in their driveway for more than 15 consecutive days and more than a total of 45 days in 2015. The homeowners denied the complaint, alleging that the recent amendment to the community's deed restrictions was invalid and, in any event, their motor home did not fit the description of the type of motor home governed by the amended deed restriction. Pending before me are the homeowners' motion to compel discovery, the HOA's motion for partial summary judgment and the homeowners' cross-motion for summary judgment. For the reasons stated below, I recommend that the Court grant the homeowners' cross-motion for summary judgment and dismiss the remaining motions as moot.

         Factual Background

         Defendants Charles and Lynda Dunham own a house in the Bay Breeze Estates, a subdivision located within the City of Lewes, Delaware. They also own a large motor home that cost in excess of $200, 000. The Dunhams use their motor home for vacationing in the north during the summer and in the south during the winter. When not away on four-month long trips, the Dunhams reside in Lewes and park their motor home in the driveway of their lot in Bay Breeze Estates, evidently to the annoyance of some neighbors.

         The lots and common areas within this subdivision are subject to certain restrictive covenants under a Declaration and Restrictions of Bay Breeze Estates ("the Declaration") that was originally recorded on December 8, 1986 in the Recorder of Deeds Office in Sussex County. Section 10(E) of the Declaration states in relevant part that:

No camper, trailer, recreational vehicle, truck (other than a pick up truck), or any vehicle or any principal component thereof shall be parked stored, or maintained for more than three consecutive days per month on any lot or street unless the vehicle is used and designed principally for personal transportation and is not capable of or principally designed for temporary or permanent habitation.[1]

         The Declaration was amended on April 4, 1992, and Section 10(E) was revised in relevant part to state:

No vehicle designed for permanent or temporary habitation, be it camper, trailer or recreational vehicle shall be parked or maintained on the streets at any time except for temporary duration not to exceed forty-eight (48) hours. Any owner's guests [sic] vehicles for vacation, i.e., camper trailer or recreational vehicle shall not be allowed to be parked in a driveway for more than seven (7) days without express written consent of the Board. Parking of commercial vehicles over two axles is prohibited at all times.[2]

         Another amendment to the Declaration on September 5, 1992, modified Section 10(E) by deleting the words "over two axles" and inserting in its place "larger than a conventional pick-up truck."[3]

         In June 2014, members of the HOA voted to amend the Declaration a fourth time. The Fourth Amendment to Declaration and Restrictions for Bay Breeze Estates ("Fourth Amendment") was passed by a total of 61 affirmative votes and was executed on August 5, 2014.[4] The Fourth Amendment revised Section 10(E) so that it now states:

No motorized vehicle designed for permanent or temporary habitation, referred to as a camper, recreational vehicle or motor home, but only those vehicles designed for permanent or temporary habitation installed on a commercial truck or commercial bus chassis, shall be parked or maintained on the streets at any time except for temporary duration not to exceed forty-eight (48) hours. Any motorized vehicle referred to as a camper, recreational vehicle or motor home, but only those vehicles designed for permanent or temporary habitation installed on a commercial truck or commercial bus chassis shall not be parked within any residential lot for more than fifteen (15) consecutive days and for no more than forty-five (45) days annually after January 1, 2015. No commercial vehicle over two (2) axels [sic] is allowed on the streets or within any lot of the Subdivision. Further, no stripped down, partially wrecked, or junk motor vehicle or sizable part thereof, shall be permitted to be parked on any street in the Subdivision or any lot in such manner as to be visible to the occupants or owners of other lots in the Subdivision. Further, no motorized vehicle designed for permanent or temporary habitation, referred to as a camper, recreational vehicle or motor home, shall be parked in any common area not part of the streets within the Bay Breeze Subdivision. No trailer or camper, being a non-motorized vehicle designed for permanent or temporary habitation is allowed in any part of the Bay Breeze Subdivision, whether it is a street, common area or lot within the subdivision.[5]

         By letter dated November 13, 2015, the HOA notified the Dunhams that they had violated Section 10(E) three times by parking their motor home in their driveway in excess of 15 consecutive days on two separate occasions and by parking their motor home in their driveway for a total of 47 days, in excess of the 45-day limit.[6] In this letter, the HOA also notified the Dunhams that they would be assessed a fine of not less than $25.00 per day for each further violation of the motor home restrictions. The Dunhams refused to accept the letter that had been sent to them by priority mail express.[7] A copy of the November 13th letter was then sent to the Dunhams by first class mail.[8]

         Procedural Background

         On February 25, 2016, the HOA filed its complaint in this Court, seeking a declaratory judgment against the Dunhams, declaring that they are bound by the Declaration and specifically mandated to follow the Fourth Amendment's revised Section 10(E) regarding parking motor homes "subject to the criteria of such Section in 2016 and in each year thereafter under the Declaration unless amended[, ]" and are liable for violations of the restrictions in an amount to be determined, with interest at the Delaware legal rate from November 27, 2015, and attorney's fees and costs.[9]

         On April 14, 2016, the Dunhams responded to the HOA's complaint by claiming that the Fourth Amendment is void or voidable because it did not receive the required number of votes and also that it is vague and ambiguous. The Dunhams also allege that the HOA is estopped from enforcing the Fourth Amendment against them because they had purchased their house and motor home in reliance on the ability to park the motor home temporarily in their driveway.[10] Finally, the Dunhams allege that their motor home does not fit the description of vehicles governed by the Fourth Amendment's Section 10(E).

         On July 8, 2016, the HOA moved for partial summary judgment on the issue of the validity of the Fourth Amendment.[11] According to the HOA, the Dunhams are estopped from now challenging the Fourth Amendment because they failed to challenge it within one year of the date of its recording, citing 25 Del. C. § 81-217(b).[12] On July 15, 2016, the Dunhams moved to compel the HOA to respond to their first request for production of documents pertaining to the adoption of the Fourth Amendment.[13] Then, on August 31, 2016, the Dunhams filed a cross motion for summary judgment, arguing that the limitations period of 25 Del. C. ยง 81-217(b) ...


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