Elmer Yu, Trustee of the Elmer Yu Revocable Trust v. James Cahill

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
SELENA E. MOLINA LEONARD L. WILLIAMS JUSTICE CENTER
MAGISTRATE IN CHANCERY 500 NORTH KING STREET, SUITE 11400
WILMINGTON, DE 19801-3734

Final Report: September 6, 2024
Date Submitted: May 23, 2024

Brian V. DeMott, Esquire Donald L. Gouge, Jr., Esquire
Allison Neff, Esquire Donald L. Gouge, Jr., LLC
McCollom D’Emilio Smith 800 King Street, Suite 303
Uebler LLC Wilmington, DE 19801
2751 Centerville Road, Suite 401
Wilmington, DE 19808

Re: Elmer Yu, Trustee of the Elmer Yu Revocable Trust, et al. v. James
Cahill, et al., C.A. No. 2022-0014-SEM

Dear Counsel,

Through this action, neighbors seek to enforce deed restrictions which have

governed their development since 1945. Pending before me are the parties’ cross-

motions for summary judgment, whereby the parties have stipulated to a decision on

a stipulated record, in lieu of trial. For the reasons I will explain, I find in favor of

the petitioners and recommend that injunctive relief be issued to remedy the

respondents’ noncompliance with the restrictions. This is my final report.
2022-0014-SEM
September 6, 2024
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I. BACKGROUND 1

This action was brought by Dr. Elmer Yu and Wilma Yu, as trustees of the

Elmer Yu Revocable Trust U/A/D 08/11/2021 and the Wilma Yu Revocable Trust

U/A/D 08/11/2021 (the “Trusts”), and Christine Welch (collectively, the

“Petitioners”) against James and Elaine Cahill (the “Respondents” and, together with

the Petitioners, the “Parties”). The Petitioners seek a mandatory injunction related

to the installation of a fence on real property located at 28 Boulder Brook Drive, in

Wilmington, Delaware, within the Boulder Brook residential development (the

“Boulder Brook Development”). Per the Petitioners, the fence violates deed

restrictions, more fully described below, which bind the properties at issue (the

“Restrictions”). I begin with some background on the community, before turning to

the Restrictions, the Parties, and the dispute before me.

A. Boulder Brook

The Boulder Brook Development is a “small neighborhood[,]” 2 which

includes approximately 33 properties.3 The neighborhood was described by one

1
This background comes from the parties’ stipulated record. See Docket Item (“D.I.”) 52
(“Stip.”). Deposition testimony is cited to as “[First Initial.] [Last Name] Dep.” See D.I. 55
(“Pet’rs’ Mot.”), Ex. B (“W. Yu Dep.”), C (“C. Welch Dep.”), D (“E. Cahill Dep.”), E (“E.
Yu Dep.”).
2
W. Yu Dep. 4:16.
3
Stip. ¶ 3(e).
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resident as “a very cohesive, friendly neighborhood[,]” which would come together

for “neighborhood garage sales, . . . holiday get-togethers at Christmastime, [and]

summer picnics.”4

The Boulder Brook Development is managed, to some extent, by the Boulder

Brook Civic Association (the “Civic Association”). The Civic Association

“monitors the activity of the neighborhood, helps with the snow removal, [and] helps

with neighbors that have situations[.]”5 At the time of depositions in this action, the

Civic Association was run by a president and treasurer. 6 The secretary seat had been

vacant for several years because “nobody want[ed] to do it anymore.”7 Thus, the

Civic Association appears to operate leanly. It also has no separate architectural

review committee.8

B. The Restrictions

Properties within the Boulder Brook Development are governed by the

Restrictions, which were recorded in the Office of the Recorder of Deeds in and for

4
W. Yu Dep. 4:17–24.
5
E. Yu Dep. 11:5–8.
6
W. Yu Dep. 4:7–9, 5:6–8.
7
Id. at 5:16–18, 7:24–8:2. But Dr. Yu testified that there was a new secretary recently
installed. E. Yu Dep. 12:18–19.
8
W. Yu Dep. 12:9–11.
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New Castle County on December 15, 1945. 9 They were subsequently amended and

recorded on December 19, 1997. 10 The Restrictions set forth requirements for the

Boulder Brook Development and explain, to some extent, the role of the Civic

Association.

This action requires my review of three sections in the Restrictions: Section

2, Section 7, and Section 9. I will briefly address each in turn.

Section 2 provides in pertinent part:

APPROVAL OF PLANS. No building, fence, wall or other structure
shall be commenced or erected, nor shall any addition to or change or
alteration therein be made, until reasonable plans and specifications
have been submitted to and approved in writing by one third or more of
the residents of Boulder Brook Development, which approvals shall
include approval by a majority of residents residing on each contiguous
or adjacent lot. Each resident of Boulder Brook Development shall have
the right to refuse to approve any such plans or specifications for any
reason. Any resident objecting to any approved plans or specifications
may, with the written concurrence of a majority of the residents of
Boulder Brook Development, lodge a complaint with the Boulder
Brook Civic Association. 11

9
Stip. ¶ 3(g).
10
Id.
11
D.I. 1 (“Compl.”), Ex. E at 3.
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Section 7 prohibits the installation of any fence that is not “open” or is greater than

four feet in height. 12 Finally, Section 9 contains an anti-waiver clause which provides

in pertinent part:

The failure to exercise any rights or remedies by the said Boulder Brook
Civic Association or by any person having such right or remedy, upon
the violation or breach of any of these restrictions or covenants, shall
not be construed or interpreted as a waiver of such right or remedy, and
shall not prevent any person from later exercising said right or remedy
in connection with said violation or breach or any later violation or
breach of these restrictions[.]” 13

C. The Parties

The Parties are residents of the Boulder Brook Development.14 Dr. Elmer Yu

and Wilma Yu reside at 30 Boulder Brook Drive (the “Yu Property”), which is

owned by the Trusts. 15 Two houses away is Christine Welch’s property and

residence, 26 Boulder Brook Drive (the “Welch Property”). 16 The Respondents’

property and residence sits in the middle of the Yu Property and the Welch Property,

at 28 Boulder Brook Drive (the “Cahill Property”).17

12
Id. at 4.
13
Id.
14
Stip. ¶ 3(d).
15
Id. ¶ 3(b); Pet’rs’ Mot., Ex. A. Dr. Yu is a physician, “a surgeon by training,” but as of
his deposition was involved in “new medication development.” E. Yu Dep. 5:15–18.
16
Stip. ¶ 3(c).
17
Id. ¶¶ 3(a), (f).
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The Respondents are the new kids on the block. The Yus have lived at the Yu

Property for 28 years; Ms. Yu has also served as the president of the Civic

Association for 20 years.18 Ms. Welch has lived at the Welch Property since 2005.19

She has not served as an officer of the Civic Association, but Ms. Welch testified

that she pays her dues, attends meetings, and participates in discussions. 20 Then there

are the Respondents; the Respondents purchased the Cahill Property on July 15,

2021. 21 Before that, they had lived in Forked River, New Jersey for 30 years.22

D. The Fence

In or around September of 2021, the Respondents installed a six-foot,

enclosed stockade fence (the “Fence”) on the Cahill Property. 23 Ms. Cahill testified

that they wanted the Fence to protect them and their two terriers. 24 She further

explained that they chose “stockade wood” because their dogs “are prone to climb

18
W. Yu Dep. 4:3–12.
19
C. Welch Dep. 3:20–22.
20
Id. at 4:2–8, 6:8–14. Ms. Welch’s late husband was, at one time, the treasurer of the
Civic Association. Id. at 6:12–14.
21
Pet’rs’ Mot., Ex. F.
22
E. Cahill Dep. 8:5–11.
23
Stip. ¶ 3(i).
24
See E. Cahill Dep. 16:20–17:10.
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wire” and they selected their fence to match the “six-foot fence across the back of

the property that is owned by the people behind” the Respondents. 25

The Respondents went forward with construction without first seeking

permission through submitting a plan or specifications for the Fence to the Civic

Association or other homeowners in the Boulder Brook Development.26 While the

Fence was being constructed, or immediately prior thereto, Dr. Yu went to the Cahill

Property to discuss with the Respondents his concern that the Respondents were

violating the Restrictions. 27

Per Ms. Cahill, Dr. Yu arrived when the Respondents “had a house full of

company at nine o’clock at night.”28 During that visit, per Ms. Cahill, Dr. Yu told

the Respondents “that there was a deed restriction and he handed [them] a bunch of

photostatic papers with pages missing and he said [they] can’t put a fence up[.]” 29 In

response, per Ms. Cahill, Mr. Cahill told Dr. Yu that the Respondents were

25
Id. at 18:15–19:14. The Respondents hired a contractor to construct the Fence; the
contractor charged $9,000.00 for construction. Id. at 15:9–21.
26
Stip. ¶¶ 3(j), (k).
27
See E. Yu Dep. 16:2–12. Ms. Cahill testified that this discussion was during construction;
per Dr. Yu, it was before construction started. Compare E. Cahill Dep. 22:11–13, with E.
Yu Dep. 16:23–24.
28
E. Cahill Dep. 21:13–16.
29
Id. at 21:19–22.
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“protecting [their] lives and [their] property in putting a fence up.” 30 Dr. Yu’s

recollection is different; per Dr. Yu, the visit and discussion was during the day, Dr.

Yu’s approach was more amicable, and, in response, Mr. Cahill “closed the door in

[Dr. Yu’s] face.” 31

Details aside, there is no dispute that this conversation did not resolve the

neighbors’ dispute. Thus, while the Respondents were constructing the Fence, “a

notice was sent out to all the neighbors that the [F]ence was being built in violation

of the deed restriction[.]”32 Ms. Yu testified that the notice informed residents that

legal action would be pursued because the Respondents “refuse[d] to enter . . . into

any discussion regarding the events.” 33 As to who would pursue that legal action,

Ms. Yu explained that the Civic Association’s officers discussed the matter and

30
Id. at 21:22–22:1. Per Ms. Cahill, the Yus visited the Cahill Property frequently to
complain about the construction of the Fence to the Respondents’ daughter, workers, and
others present. See id. at 28:10–29:3, 30:2–9.
31
E. Yu Dep. 18:3–15. These disputed details are not material to the issues before me.
32
W. Yu Dep. 6:3–6; see also C. Welch Dep. 8:22–9:2 (explaining that she “believe[s]
there was a notice just letting the community know that there was a dispute about the fence
that was being built at [the Cahill Property]”).
33
W. Yu Dep. 6:3–9. But Ms. Yu also confirmed at her deposition that she had not had any
significant contact with the Respondents. Id. at 12:18–24; see also E. Cahill Dep. 21:6–8
(confirming she never had a conversation with Ms. Yu). Ms. Welch also testified that she
did not have any contact with the Respondents. C. Welch Dep. 11:11–13. But Ms. Welch
did have a short conversation with the Respondents’ daughter. Id. at 11:14–12:19.
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“elected” to have it handled individually, by the neighboring property owners, rather

than through the Civic Association.34

At her deposition, Ms. Yu explained why she opposed the Fence as follows:

Part of the feel of this neighborhood has been the open park-like
atmosphere. That’s part of the quality of life, that’s part of the charm of
this neighborhood. We’ve had a lot of wildlife that used to come
through the property. We have an issue with the fence obstructing the
water flow. We live on a hill, so all the water flows downhill. The fence
obstructs the water flow, so then we have flooding at that area of the
fence[.] 35

But she went on to emphasize: “the biggest thing is it really does affect the charm

and the appeal of th[e] neighborhood.”36 Ms. Welch agreed, testifying:

Before the fence was built, I could look up the street or look up the
backyards and see, if I heard something odd, I could look up the street
and see whether something was going on in the Yus’ backyard, they
could see if some[thing] was going on in my backyard to be concerned
of. And it does give you that more open feeling, which is what we like
about Boulder Brook, is you do feel like you’re living in a parkland,
and [the Fence] certainly does take away from that feeling. 37
34
W. Yu Dep. 7:5–9. Ms. Welch testified that she was involved in that decision and agreed
it was more appropriate for the directly affected neighbors to bring suit. C. Welch Dep.
17:17–22, 25:5–15; see also E. Yu Dep. 23:17–19 (“I felt it was more efficient that we
pursued this thing as a neighbor, it would be better.”).
Ms. Yu further testified that, during her 20 years as president, the Civic Association
never took legal action to enforce the Restrictions, but the neighbors did address violations
informally. See W. Yu Dep. 8:5–9:5, E. Yu Dep. 13:6–11.
35
W. Yu Dep. 17:22–18:10.
36
Id. at 18:11–13.
37
C. Welch Dep. 15:1–14; see also id. at 21:24–23:17 (explaining further reasons for her
objection); E. Yu Dep. 35:16–21 (describing the Fence as “unsightly” and incongruous
with the prior park-like atmosphere).
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But the Fence does not stand alone. There are three other fences in the Boulder

Brook Development (the “Other Fences”). 38 The Other Fences are “not ‘open’

fences[,]”39 and are on property that is not “contiguous with or immediately adjacent

to the Yu Property, the Cahill Property, or the Welch Property.” 40 Other than photos

taken from the street, the record does not include “specific physical characteristics

of the [Other Fences], including the dimensions of their length and height[.]” 41 Nor

do we know “[t]he specific circumstances regarding the approvals, if any,” or

homeowner consent to the Other Fences.42

E. Procedural Posture

The Petitioners initiated this action on January 5, 2022, through a complaint

seeking a declaratory judgment and injunctive relief.43 Service of the complaint

initially proved challenging for the Petitioners; at their request, I approved an

38
Stip. ¶ 3(m).
39
Id.
40
Id. ¶ 3(n).
41
Id. ¶ 3(s); see also D.I. 56, App. at A001–04 (photos).
42
Stip. ¶ 3(r). But, per Ms. Yu, for prior fences the residents “talked to their neighbors and
it’s been agreed upon and . . . a four [foot] fence [was] erected[.]” W. Yu Dep. 9:7–17.
43
Compl at 6.
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alternative means of service, which was effective and caused the Respondents to

answer the complaint on April 12, 2022.44

On October 13, 2022, I granted the Parties’ proposed schedule, setting a two-

day trial beginning on Wednesday, October 18, 2023.45 Despite agreeing to this

schedule, on January 11, 2023, the Respondents moved to stay discovery and delay

this action by “a few months” to permit the Respondents to pursue, without

interference, a complaint they filed with the State of Delaware Human Relations

Commission on January 9, 2023.46 The Petitioners opposed the request, on which I

heard argument April 4, 2023.47 Thereafter, I directed the Parties to submit

supplemental briefing, which was completed by April 18, 2023.48 Ultimately, on

May 26, 2023, I issued an order denying the motion to stay and keeping this action

on track.49

The Parties proceeded to litigate, but during the October 9, 2023 pretrial

conference, the Parties indicated an interest in working toward a stipulation to limit

44
D.I. 5–11, 13.
45
D.I. 20. The schedule was amended on December 2, 2022 to adjust internal deadlines;
the trial date was unchanged. See D.I. 23.
46
D.I. 27.
47
See D.I. 30, 31, 34.
48
D.I. 35–37.
49
D.I. 38. No exceptions were filed.
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or resolve the few factual issues for trial.50 After a step in the wrong direction, the

Parties ultimately filed a stipulation and proposed order to have the matter resolved

via cross motions for summary judgment on a stipulated record. 51 Trial was

cancelled, summary judgment briefing was complete on December 28, 2024, and on

May 23, 2024, I heard oral argument and took this matter under advisement.52

II. ANALYSIS

Under Court of Chancery Rule 56, this Court will grant summary judgment

when “there is no genuine issue as to any material fact and . . . the moving party is

entitled to a judgment as a matter of law.” 53 Where cross-motions for summary

judgement are filed and the parties do not argue issues of material fact are in dispute,

“the Court shall deem the motions to be the equivalent of a stipulation for decision

on the merits based on the record submitted with the motions.”54

Here, the Parties have stipulated to a decision based on the agreed-upon record

for their competing motions for summary judgment. Those motions teed up three

primary disputes regarding (1) the enforceability of the Restrictions, (2) the

50
See D.I. 50.
51
D.I. 51; see also D.I. 50, 54.
52
D.I. 55–58, 65.
53
Ct. Ch. R. 56(c).
54
Ct. Ch. R. 56(h).
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suitability of injunctive relief, and (3) fees and costs. I address (1) within the

framework of (2), before turning to (3). As further explained herein, I find (A)

injunctive relief warranted because the Petitioners have demonstrated the

Restrictions are enforceable, were breached, and the equities weigh in favor of

removal and (B) costs, but not fees, should be shifted in the Petitioners’ favor.

A. Injunctive relief should be awarded.

The Petitioners seek injunctive relief, requiring the Respondents to remove

the Fence. To prevail, the Petitioners needed to prove, by a preponderance of the

evidence: “(1) actual success on the merits of the claims; (2) that the [Petitioners]

will suffer irreparable harm if injunctive relief is not granted; and (3) that the harm

to the [Petitioners] outweighs the harm to the [Respondents] if an injunction is

granted.”55 I find the Petitioners have met their burden and thus injunctive relief

should be awarded.

1. The Petitioners have demonstrated actual success on the
merits.

To demonstrate actual success, the Petitioners had to establish that the

Restrictions are enforceable and were breached by the Respondents. They have met

55
Benner v. Council of Narrows Ass’n of Owners, 2014 WL 7269740, at *11 (Del. Ch.
Dec. 22, 2014) (citing Examen, Inc. v. VantagePoint Venture P’rs 1996, 2005 WL
1653959, at *2 (Del. Ch. July 7, 2005)); see also Civic Ass’n of Surrey Park v. Riegel, 2022
WL 1597452, at *9 (Del. Ch. May 19, 2022) (“The burden of proof for these claims and
defenses is by a preponderance of the evidence.”).
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this burden and I reject the Respondents’ argument that the right to enforce the

Restrictions has been waived.

The Petitioners contend the Respondents violated Sections 2 and 7 of the

Restrictions. Section 2 requires preapproval of any plans to construct fences and is

a type of architectural review covenant. 56 Although “generally upheld as valid . . .

[architectural review] covenants . . . must be carefully evaluated because their

arguably subjective nature introduces the risk of arbitrary and capricious

application.” 57 In conducting that careful review, this Court will consider (1) notice

of the restrictions, (2) whether they “present clear, precise, and fixed standards of

application,” and (3) whether they were arbitrarily applied. 58 Notice is not at issue

here—the Respondents concede that they had constructive notice because the

Restrictions were recorded. That is sufficient and no greater showing is required.59

Application is also not at issue; because the Respondents never submitted a plan for

approval, Section 2 was never applied. Thus, the only question truly before me is

56
See Riegel, 2022 WL 1597452, at *8 (describing architectural review covenants as those
“requir[ing] prior review and approval of plans for improvements”).
Lawhon v. Winding Ridge Homeowners Ass’n, Inc., 2008 WL 5459246, at *5 (Del. Ch.
57

Dec. 31, 2008).
58
Id.
59
Cf. Mendenhall Vill. Single Homes Ass’n v. Harrington, 1993 WL 257377, at *2 (Del.
Ch. June 16, 1993) (“It is axiomatic that restrictive covenants may be enforced against a
purchaser only if he or she had notice, either actual or constructive, of their existence.”).
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whether the Restrictions are subject to arbitrary and capricious application and, as

such, are unenforceable as written. I find Section 2 unenforceable; but Section 7

remains viable.

a. Section 2 is unenforceable.

Architectural review covenants, like Section 2, must have “clear, precise, and

fixed standards of application.”60 Such is necessary to “constrain subjectivity and

promote even-handed application.”61 Specificity also ensures adequate notice to

homeowners regarding what is restricted; “[r]estrictive covenants which are too

vague to serve these functions of notice and fairness are unenforceable.”62

Section 2 has no fixed standards, is rife with subjectivity, and is

unenforceable. Section 2 requires plans to construct any fences be submitted for

preapproval. Approval must be made by both one-third (or more) of the residents of

the Boulder Brook Development and a majority of the contiguous or adjacent

residents. This broad power conferred on the community comes with no objective,

non-arbitrary strings attached. The preapproval power is, thus, subject to arbitrary

and capricious application, fails to provide adequate notice of restrictive conduct,

and is not enforceable.

60
Lawhon, 2008 WL 5459246, at *5.
61
Id.
62
Id.
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b. Section 7 is enforceable.

But that does not end my inquiry. Even with Section 2 unenforceable, Section

7 remains. “Interpreting deed restrictions is a matter of contract interpretation” under

Delaware contract law. 63 Under this lens, I must read the Restrictions “as a whole,

giving effect to each term and provision, ‘so as not to render any part of the contract

mere surplusage.’”64 Thus, Section 2’s unenforceability does not negate my separate

review of Section 7. 65

Section 7 is clear and unambiguous. Section 7 provides: “No fence other than

an open fence, and no fence of any kind more than 4 feet in height, shall be erected

or maintained” within the Boulder Brook Development. This provision provides

notice to all those within the community as to what is required, is enforceable as

written, and needs no further interpretation.

63
Wild Quail Golf & Country Club Homeowners’ Ass’n, Inc. v. Babbitt, 2021 WL
2324660, at *3 (Del. Ch. June 3, 2021), adopted, (Del. Ch. June 17, 2021).
64
Centene Corp. v. Accellion, Inc., 2022 WL 898206, at *5 (Del. Ch. Mar. 28, 2022)
(quoting Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010)).
65
True, Section 2 also references “fences,” but “[s]pecific language in a contract controls
over general language, and where specific and general provisions conflict, the specific
provision ordinarily qualifies the meaning of the general one.” DCV Hldgs., Inc. v.
ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005). To negate or ignore the specific
requirements in Section 7 due to the unenforceability of Section 2 would violate this
principle of contract interpretation and fail to uphold the community’s social contract.
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c. The Respondents violated Section 7 and their
waiver argument should fail.

The Respondents do not dispute that they violated Section 7 by installing a

fence that is both closed off and above four feet. But the Respondents argued, for

the first time in their summary judgment briefing, that the ability to enforce the

Restrictions was waived. In response, the Petitioners highlight (1) that the

Respondents did not assert a waiver defense in their answer, (2) the Restrictions

contain an anti-waiver provision, and (3) the Respondents fail to meet the burden

necessary to establish waiver. I agree with the Petitioners; the Respondents’ waiver

argument should fail.

First, the Respondents should have pled waiver as an affirmative defense in

their answer. Under Court of Chancery Rule 8(c), “[i]n pleading to a preceding

pleading, a party shall set forth affirmatively . . . waiver[.]”66 The Respondents failed

to do so. Second, the Respondents have not articulated any basis on which to

overcome the anti-waiver provision in the Restrictions. This Court has enforced

similar anti-waiver provisions.67 The Respondents have given me no reason to depart

66
Ct. Ch. R. 8(c). This citation reflects a prior version of Rule 8 in effect when I took this
matter under advisement. By way of context, among others, Rule 8 was amended effective
June 14, 2024, and then corrected and amended again effective July 12, 2024.
67
See, e.g., Brandywine Hills Cmty. Ass’n v. T. Bruce Wilmoth Const. Co., 1995 WL
767336, at *9 (Del. Ch. Dec. 21, 1995).
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from this precedent. Third, and finally, the Respondents failed to discover, and thus

failed to present, evidence showing that “more likely than not,” there was a knowing

waiver. Even assuming I forgive the pleading deficiency and the Respondents find

a way around the anti-waiver language in the Restrictions, the Respondents fall short

of meeting their burden to prove waiver. 68

2. The Petitioners will suffer irreparable harm absent
injunctive relief, and balancing the harms favors the
Petitioners.

The second element of a request for permanent injunctive relief is that the

moving party will suffer irreparable harm absent relief. In deed restriction cases,

irreparable harm is nearly presumed. As then-Vice Chancellor Steele explained:

The [homeowners within a community with deed restrictions]
knowingly enter into a social contract with the other lot owners when
purchasing their land. This contract includes adhering to the
Restrictions’ restrictive covenants. Relying on the covenant, many lot
owners have invested a large amount of time and money improving
their lots, including building residences for themselves. Once a
restriction is breached, the [homeowners association] can never again
regain the sanctity of the covenant.69

68
See Quail Vill. Homeowners Ass’n, Inc. v. Rossell, 2018 WL 6534456, at *10 (Del. Ch.
Dec. 10, 2018) (“A waiver of deed restrictions usually involves a failure to object to other
violations of the same or similar restriction such that it would be unfair to allow the
claimant to enforce the [restriction] against the current violation. . . . [The defendant] bears
the burden of proof on her affirmative defense of waiver, and the ability to preclude
enforcement due to waiver occurs only to the extent of the waiver she demonstrates. If
waiver is not shown for a particular deed restriction, then it remains in effect.”) (first
brackets in original) (citation and quotation marks omitted).
69
Slaughter v. Rotan, 1994 WL 514873, at *3 (Del. Ch. Sept. 14, 1994).
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The third element then requires me to balance the harms. Although injunctive

relief may be an extreme remedy at times, it is appropriate when there would not be

“substantial economic harm” to the noncompliant homeowners.70 That is because

“[e]quity will not reward a knowing breach of restrictions.”71

I find Vice Chancellor Noble’s decision in The Cove on Herring Creek

Homeowners’ Association, Inc. v. Riggs on point.72 Therein, Vice Chancellor Noble

ordered injunctive relief, mandating the removal of unapproved sheds. 73 Because

the homeowners failed to make any showing of “substantial economic harm if they

are required to remove their sheds[,]” Vice Chancellor Noble granted injunctive

relief. 74

I recommend the same here. The Respondents, despite constructive notice of

the Restrictions, violated Section 7, which unequivocally barred closed fences and

fences higher than four feet tall. The harm to the Petitioners is evident from the

70
Cove on Herring Creek Homeowners’ Ass’n, Inc. v. Riggs, 2003 WL 1903472, at *6
(Del. Ch. Apr. 9, 2003).
71
Quail Vill., 2018 WL 6534456, at *3; Plantation Park Ass’n, Inc. v. George, 2007 WL
316391, at *5 (Del. Ch. Jan. 25, 2007) (explaining this Court may “discount harm resulting
for the knowing breach of the covenant” in its balancing analysis).
72
2003 WL 1903472.
73
Id. at *6.
74
Id.
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breached social contract.75 The Respondents, on the other side, have failed to

demonstrate that if injunctive relief were to be granted that there would be any

substantial economic harm to them that would outweigh the harm they caused.76

Injunctive relief should be issued directing the Respondents to remove the Fence.

B. The Petitioners are entitled to costs, but not fees.

Having found the Petitioners should prevail, I turn to their final requests for

relief: shifting of attorneys’ fees and costs. The Petitioners seek attorneys’ fees under

Title 10, Section 348 of the Delaware Code. This action was not, however, filed

75
In so holding, I reject the Respondents’ argument that this Court’s precedent presuming
irreparable harm is inapplicable, or less persuasive, because the Petitioners brought suit in
their individual capacity. I see no reason to draw this distinction; the Restrictions inure to
the benefit of all residents in the Boulder Brook Development, and it would be inequitable
to only recognize the harm from one homeowner breaching the community’s social
contract when the Civic Association pursues relief.
76
The Respondents failed to quantify the cost of removal, although Ms. Cahill did testify
regarding the cost of the construction of the Fence. E. Cahill Dep. 15:9–21. But that cost
and the unquantified cost of removal is largely of the Respondents’ own making. The
Respondents had, at least, constructive notice of the Restrictions before construction. Then
immediately before construction began, or during construction, the Yus provided actual
notice of the Restrictions. The Respondents decided not to heed those warnings and
proceeded at their own risk. This distinguishes this case from Quail Village Homeowners
Association, Inc. v. Rossell, where there was no evidence that the homeowner “knowingly
proceeded with construction at her own risk[,]” and then-Master Griffin, in reliance
thereon, approved injunctive relief short of removal (requiring the homeowner to submit a
plan for approval). 2018 WL 6534456, at *4; cf. Tusi v. Mruz, 2002 WL 31499312, at *5
(Oct. 31, 2002) (acknowledging the “draconian nature of relief requiring demolition of [a]
[g]arage” and, nonetheless, ordering same); Christine Manor Civic Ass’n v. Gullo, 2007
WL 3301024, at * 4 (Del. Ch. Nov. 2, 2007) (finding “[t]he only equitable and viable
remedy available to the Court” where the homeowner built a structure without approval
and “at her risk” was “removal of the structure”).
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September 6, 2024
Page 21 of 22

under Section 348, which has specific filing requirements under Court of Chancery

Rule 174(c)(2). Nor does this action qualify for Section 348 treatment; Section 348

requires at least one party to be a homeowner’s association or similar entity, if one

exists (which one does, the Civic Association). Absent this statutory shift, and

without any other articulated exception, the American Rule applies.77 The

Petitioners’ request for attorneys’ fees must be denied.

But, under Court of Chancery Rule 54(d), “costs shall be allowed as of course

to the prevailing party unless the Court otherwise directs.” The prevailing party is

the “party who successfully prevails on the merits of the main issue or the party who

prevailed on most of their claims.”78 “[T]ypically, the burden lies with the non-

prevailing party to rebut the presumption under Court of Chancery Rule 54(d) that

the prevailing party should receive costs[.]” 79

Here, the Petitioners are the prevailing parties. Although I find Section 2

unenforceable, I nevertheless recommend judgment in favor of the Petitioners for

the ultimate relief sought (an injunction requiring the Respondents to remove the

Fence). The Petitioners are, thus, the prevailing parties. The Respondents have failed

77
Mahani v. Edix Media Gp., Inc., 935 A.2d 242, 245 (Del. 2007) (“Under the American
Rule and Delaware law, litigants are normally responsible for paying their own litigation
costs.”) (citations omitted).
78
In re Mindbody, Inc., S’holder Litig., 2023 WL 2518149, at *48 (Del. Ch. Mar. 15, 2023).
79
In re Oracle Corp. Deriv. Litig., 2023 WL 9053148, at *3 (Del. Ch. Dec. 28, 2023).
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September 6, 2024
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to rebut the presumption that costs should be shifted and I see no basis on which the

presumption should not apply; costs should be shifted in the Petitioners’ favor.

III. CONCLUSION

For the above reasons, I find in favor of the Petitioners. This Court should

issue a permanent injunction requiring the Respondents to remove the Fence. The

Respondents should also bear the Petitioners’ costs incurred in this action. Further

relief should be denied.

This is my final report, and exceptions may be filed under Court of Chancery

Rule 144.

Respectfully submitted,

/s/ Selena E. Molina

Magistrate in Chancery