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Bd. of Pub. Works v. City of Lewes

SUPERIOR COURT OF THE STATE OF DELAWARE
Jan 27, 2020
C.A. No. S19C-07-021 ESB (Del. Super. Ct. Jan. 27, 2020)

Opinion

C.A. No. S19C-07-021 ESB

01-27-2020

BOARD OF PUBLIC WORKS OF THE CITY OF LEWES, Plaintiff, v. CITY OF LEWES, Defendant.

Sidney S. Liebesman, Esquire and E. Chaney Hall, Esquire, FOX ROTHSCHILD LLP, Citizens Bank Center, 919 N. Market Street, Suite 300, Wilmington, DE 19801; and Michael J. Hoffman, Esquire, Tarabicos Grosso, LLP, One Corporate Commons, 100 W. Commons Blvd., Suite 415, New Castle, DE 19720, Attorneys for Plaintiff. Thomas P. McGonigle, Esquire, Joseph C. Schoell, Esquire, Renee M. Dudek, Esquire, DRINKER BIDDLE & REATH LLP, 222 Delaware Avenue, Suite 1410, Wilmington, DE 19801, Attorneys for Defendant.


ORDER Sidney S. Liebesman, Esquire and E. Chaney Hall, Esquire, FOX ROTHSCHILD LLP, Citizens Bank Center, 919 N. Market Street, Suite 300, Wilmington, DE 19801; and Michael J. Hoffman, Esquire, Tarabicos Grosso, LLP, One Corporate Commons, 100 W. Commons Blvd., Suite 415, New Castle, DE 19720, Attorneys for Plaintiff. Thomas P. McGonigle, Esquire, Joseph C. Schoell, Esquire, Renee M. Dudek, Esquire, DRINKER BIDDLE & REATH LLP, 222 Delaware Avenue, Suite 1410, Wilmington, DE 19801, Attorneys for Defendant.

INTRODUCTION

If two heads are greater than one, then a two-headed enemy is truly a formidable foe. In all of human history, perhaps the best person to attest to this truth is the great hero Heracles. To complete his twelve labours as penance for an unspeakable act, Heracles was forced to fight a nine-headed hydra, a three-headed giant, and a pair of multi-headed dogs. I now face a similar being, although my task is arguably more difficult. Rather than fight this two-headed creature before me, I am called upon to settle a disagreement between its minds. My only wish is that I knew what wrong I committed to deserve this fate.

The City of Lewes (the "City") is a relatively quiet beach town that even in the busy summer months offers a distinctly different atmosphere than its more commercialized southern neighbor. But recently, this scenic exterior has belied a raging battle over the provision of City utilities. Incredibly, this dispute is not between the City and members of the public or any particular owner of real property. Instead, the City is in the midst of a contentious disagreement with its Board of Public Works (the "BPW") over conditioning the extension of utility services on the execution of an agreement to allow the City to annex a property into its corporate limits.

The City believes it is within its power to force the BPW to require property owners to agree to this condition prior to the extension of utility service to their property. The BPW disagrees and has filed this action requesting that the Court issue a judgment upholding their autonomy over the management of Lewes utilities. Ultimately, I have decided to grant the City's Motion to Dismiss this action solely on the grounds that the BPW lacks the statutory authority to maintain the current suit.

BACKGROUND

The Delaware General Assembly officially established the Town of Lewes by charter in 1818. The current Lewes charter was enacted by the General Assembly in 1969, with subsequent amendments. The City is governed by a city council composed of the Mayor and four other councilpersons (the "City Council").

5 Del. Laws c. 175 (Feb. 2, 1818).

57 Del. Laws c. 170 (Jan. 19, 1969) ("Lewes Charter").

The BPW was first established by charter in 1901. The current BPW charter was enacted in 2009. The BPW Charter directs the Mayor and City Council to continue the BPW for the purpose of operating the Lewes public utilities. The BPW is authorized "to establish, to control and to regulate" the utility systems in Lewes, including the City's electrical, water, and sewage systems. The BPW Charter permits the BPW to supply utility services to "properties which are located within two (2) miles of the corporate limits of the City as presently constituted or hereafter extended under such terms and conditions as the Board may deem proper."

22 Del. Laws c. 196 (Mar. 15, 1901).

77 Del. Laws c. 10 (Apr. 9, 2009) ("BPW Charter").

Id. at § 1.

Id.

Id. at § 4.20.

The City and the BPW have an interesting and unique relationship. As the BPW is responsible for the operation of the utility systems ultimately owned by the City, they are fundamentally linked. The BPW Charter requires that the BPW make monthly payments and provide annual financial reports to the City. With regard to legal liability, the BPW Charter indicates that the City and the BPW are to be considered a singular entity.

Id. at § 4.3.

Id. at § 4.17.

Id. at § 8 ("No action, suit or proceeding shall be brought or maintained against the City on behalf of the BPW for damages . . .") (emphasis added).

Notwithstanding its statutory connections to the City, the BPW largely operates as an independent and autonomous organization. The BPW is composed of five elected directors and one ex-officio person appointed by the Mayor. The Mayor's ex-officio seat has no voting power. The BPW employs and manages its own employees with a different compensation structure than City employees. The BPW maintains its own bank accounts and books and records. With the exception of real property jointly owned with the City, the BPW owns and maintains its own property.

Id. at § 2.1.

The BPW Charter appears to vest sole decision-making authority over the Lewes utility systems with the BPW. The Mayor and City Council are required to follow the BPW's direction and acquire land whenever the BPW deems such land necessary "for any purpose connected with the utility systems." Furthermore, the Mayor and City Council "have no authority to cease to operate, or to sell, lease, abandon or in any other way dispose of any public utility owned by it, [without first holding a public referendum vote to approve said sale.]"

See generally Id. at § 4.

Id. at § 4.8.

Id. at § 9.6.

For many years, the BPW conditioned the extension and provision of utility services outside the corporate limits of Lewes upon the property owner's agreement to allow the City to annex the property if and when the City so decided (the "Pre-Annexation Condition"). This procedure was memorialized by BPW Resolution No. 07-002, adopted March 27, 2007, titled "A Resolution of the Board of Public Works of the City of Lewes to Establish a Procedure for Application for Utility Services for Areas Beyond the Limits of the City of Lewes." A slight modification of this procedure occurred with the adoption of Resolution No. 13-004 on December 4, 2013, with the Pre-Annexation Condition remaining intact.

In 2016, the BPW expressed its intention to abandon the Pre-Annexation Condition. In light of the City's objection, the BPW instead began considering Pre-Annexation Condition waiver requests from affected property owners on a case-by-case basis. The City and the BPW are currently at odds over a requested exemption to the Pre-Annexation Condition submitted on March 11, 2019. The BPW wishes to grant the requested waiver and to completely abandon the Pre-Annexation Condition over the City's objection.

On June 24, 2019, the City adopted a resolution prohibiting the BPW from providing utility services to areas beyond City limits unless the property owner first annexes the property into the City or agrees to the Pre-Annexation Condition (the "June 24 Resolution"). Additionally, also on June 24, 2019, the City adopted an ordinance amending the Lewes municipal code to codify the Pre-Annexation Condition policy as law (the "June 24 Ordinance"). Shortly thereafter, on June 26, 2019, the BPW held a meeting where it unanimously rejected the City's authority to adopt the June 24 Resolution and the June 24 Ordinance.

The BPW filed its Complaint for Declaratory Judgment on July 17, 2019. The BPW filed its Verified First Amended Complaint for Declaratory Judgment on August 29, 2019 (the "Amended Complaint").

D.I. 1.

D.I. 8.

On August 15, 2019, the City submitted its Motion for Leave to Present Briefing on Motion to Dismiss (the "Motion for Leave"). The BPW filed its Response to the Motion for Leave on August 30, 2019. At the BPW's request, I allowed the parties to simultaneously present briefing on the BPW's Motion for Summary Judgment and the City's Motion to Dismiss.

D.I. 3.

D.I. 11.

D.I. 16.

The City filed its Motion to Dismiss on October 7, 2019 (the "Motion to Dismiss"). The BPW also filed its Motion for Summary Judgment on October 7, 2019 (the "Motion for Summary Judgment"). The parties have fully briefed their respective Motions.

D.I. 18.

D.I. 19.

LEGAL STANDARD

On a motion to dismiss for lack of subject matter jurisdiction under Superior Court Civil Rule 12(b)(1), "the burden of establishing the Court's subject matter jurisdiction rests with the party seeking the Court's intervention." For the motion to be granted, the movant "need only show that the Court lacks jurisdiction."

Airbase Carpet Mart, Inc. v. AYA Associates, Inc., 2015 WL 9302894, at *2 (Del. Super. Dec. 15, 2015).

Id.

On a motion to dismiss for failure to state a claim under Superior Court Civil Rule 12(b)(6), "all well-pleaded allegations must be accepted as true." The motion must be denied if the plaintiff could "recover under any reasonably conceivable set of circumstances susceptible of proof under the complaint." The Court must read the complaint generously and view all well-pleaded allegations in a light most favorable to the plaintiff. Dismissal is warranted only when "under no reasonable interpretation of the facts alleged could the complaint state a claim for which relief might be granted."

Spence v. Funk, 396 A.2d 967 (Del. 1978).

Id.

Bryce Thompson Inst. v. Medimmune, Inc., 2009 WL 1482237, at *4 (Del. Super. May 19, 2009).

Hedenberg v. Raber, 2004 WL 2191164, at *1 (Del. Super. Aug. 20, 2004).

When considering a motion for summary judgment under Superior Court Civil Rule 56, the Court will grant the motion only when it is satisfied that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The moving party bears the burden of establishing the non-existence of material issues of fact. Once the moving party meets its burden, the burden shifts to the non-moving party to establish the existence of material issues of fact. The Court views the evidence in a light most favorable to the nonmoving party.

See Super. Ct. Civ. R. 56 (c).

Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979).

Id. at 681.

Id. at 680.

DISCUSSION

In its Motion to Dismiss, the City first asserts that the BPW lacks standing to challenge the June 24 Ordinance through a suit against the City. Next, the City argues that the BPW fails to state a claim for which relief can be granted because the City has ultimate authority over the BPW and the Lewes utility systems. Finally, the City contends that the Amended Complaint should be dismissed because it seeks an impermissible advisory opinion.

In its Motion for Summary Judgment, the BPW seeks a Court order holding that the Pre-Annexation Condition is legally unenforceable and that the City lacks the statutory authority to direct and control the BPW or its provision of utility services.

The City's Motion to Dismiss

As a threshold matter, I must first address the City's argument that the BPW lacks standing to bring this suit as a means of challenging the City's adoption of the June 24 Ordinance. "Standing" refers to the right of a party to invoke the jurisdiction of a court to enforce a claim or to redress a grievance. The issue of standing is concerned "only with the question of who is entitled to mount a legal challenge and not with the merits of the subject matter in controversy." The parties agree that if the BPW has standing to the bring this suit, then such authority would, necessarily, come from the BPW Charter.

See Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1382 (Del. 1991).

Id. (emphasis in original).

When interpreting a statute like the charter at issue here, courts first determine whether the statute is ambiguous. A statute is ambiguous if it can be interpreted in two reasonably different ways. If that is the case, courts consider the statute as a whole, rather than in parts, and read each section in light of all others to produce a harmonious whole. If a statute is unambiguous, then it should be read to the give the words in the statute their plain meaning. Courts are to "ascribe a purpose to the General Assembly's use of statutory language, construing it against surplusage, if reasonably possible."

Dewey Beach Enters., Inc. v. Bd. of Adjustment, 1 A.3d 305, 307 (Del. 2010).

Id.

Taylor v. Diamond State Port Corp., 14 A.3d 536, 538 (Del. 2011).

Id.

Id.

In support of its standing to bring this suit, the BPW points to previous cases in which the BPW was a party in its own right. However, I find these cases unhelpful in this instance as the BPW's standing did not appear to be raised as an issue, and was therefore not discussed, in either case.

See Bd. of Public Works v. Greener, 2005 WL 1249039 (Del. Super. May 25, 2005); Barcroft Co. v. Bd. of Public Works of the Town of Lewes, 1980 WL 81867 (Del. Ch. Mar. 11, 1980).

Notably, the BPW Charter lacks a general provision granting it the authority to sue and be sued. This stands in contrast to the Lewes Charter, which grants the City the ability "to sue and be sued, plead and be impleaded, answer and be answered, defend and be defended in all courts of judicature whatsoever . . ." The BPW Charter only mentions the ability of the BPW to sue or be sued under a few, specific circumstances.

Lewes Charter, § 1.

First, the BPW Charter allows the BPW to file liens against real property "for the non-payment of utility rents, fees, rates, assessment charges or any other charge, or fee . . ." To collect such fees or charges, the BPW is authorized to foreclose on a lien according to the rules and procedures of this Court.

BPW Charter, § 4.12.3.

Id.

Second, the BPW is authorized to levy monetary fines or penalties for violations of its rules and regulations. The BPW may attempt to collect such penalties either "administratively or in a court of competent jurisdiction."

Id. at § 5.

Id.

Third, the BPW Charter directs the BPW to indemnify its directors or officials in any suit arising out of their good faith actions taken in connection with the performance of their official duties. However, the BPW is explicitly permitted not to indemnify such parties in actions "by or in the right of the BPW itself."

Id. at § 7.

Id.

Fourth, the BPW Charter provides that no suit or proceeding for damages may be "brought or maintained against the City on behalf of the BPW" unless proper notice is given within one year of the date of the injury.

Id. at § 8. --------

Taken together, the provisions discussed above only contemplate a few specific scenarios in which the BPW may sue. Most importantly, the BPW is only expressly authorized to bring actions against parties that owe it money as well as its own directors and officials. Although less relevant to the issue in this case, I do note that when it comes to being sued, the BPW Charter implies that the BPW and the City are to defend such actions together, in the name of the City.

I am unable to find any other language in the BPW Charter even so much as hinting that its drafters intended for the BPW to have the general authority to sue and be sued. While it may be arguable whether this lack of language represents a legislative oversight, I reject the BPW's contention that it creates a statutory ambiguity. Read plainly, the BPW Charter only authorizes the BPW to sue rate-payers for fees and penalties or its own directors or officers for actions made in bad faith. If the General Assembly intended to provide the BPW with the general authority to sue or be sued then it is up to that body to amend the BPW Charter. It would be inappropriate for this Court to create such a provision out of whole cloth, and I decline to do so here.

Accordingly, I find that the City is entitled to dismissal of this action due to the BPW's lack of standing. Given this decision, I make no finding with regard to the core issues surrounding the enforceability of the Pre-Annexation Condition or the City's purported "authority and control" over the BPW. Although the City has technically prevailed, it is unclear what it gains from this victory. While the City has presented numerous arguments as to why the BPW should acquiesce to its desire to enforce the Pre-Annexation Condition, the City quite evidently lacks the actual ability to force the BPW to do so. This leads me to the unfortunate conclusion that my decision here does not represent an end to the litigation in this matter.

CONCLUSION

The BPW's Motion for Summary Judgment is hereby DENIED. The City's Motion to Dismiss is hereby GRANTED.

IT IS SO ORDERED.

/s/_________

E. Scott Bradley


Summaries of

Bd. of Pub. Works v. City of Lewes

SUPERIOR COURT OF THE STATE OF DELAWARE
Jan 27, 2020
C.A. No. S19C-07-021 ESB (Del. Super. Ct. Jan. 27, 2020)
Case details for

Bd. of Pub. Works v. City of Lewes

Case Details

Full title:BOARD OF PUBLIC WORKS OF THE CITY OF LEWES, Plaintiff, v. CITY OF LEWES…

Court:SUPERIOR COURT OF THE STATE OF DELAWARE

Date published: Jan 27, 2020

Citations

C.A. No. S19C-07-021 ESB (Del. Super. Ct. Jan. 27, 2020)