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Stroud v. Forest Gate Dev. Corp.

Court of Chancery of Delaware, New Castle

April 6, 2004, Submitted ; May 5, 2004, Decided

C.A. No. 20063-NC, C.A. No. 20064-NC


The Plaintiffs in these two cases, which were consolidated for trial, seek specific performance of their contracts with the Defendant for the purchase of townhouse units in the Forest Gate Development, a subdivision in northern New Castle County, Delaware. Construction of these units was postponed in part because of problems with a stormwater management pond, and the Defendant now maintains that a force majeure clause relieves it of any duty to convey the units to the Plaintiffs. This letter opinion sets forth the Court's findings of fact and conclusions of law.


In 1995, Defendant Forest Gate Development Company ("FGDC") initiated the process to develop a 3.52-acre parcel for a 24-unit townhouse community known as Forest Gate. By March 1999, building permits had been issued for twenty of the units. New Castle County ("County") would not issue building permits for the remaining units until the open space serving Forest Gate, including the stormwater [*2]  management system, had been completed and inspected and approved by the County. 1 The delays which would provide the basis for FGDC's force majeure claim occurred primarily within the context of the County's inspection of the stormwater management system.

 On March 10, 2000, Plaintiffs S. Scott Stroud and Anna Phalangas Stroud ("the Strouds") entered into an agreement with FGDC for the purchase of Forest Gate Unit 11. 2 That agreement called for closing in March 2001.

 [*3]  On January 29, 2002, Plaintiffs Nicholas Diamond and Sherry Diamond ("the Diamonds") entered into an agreement with FGDC for the purchase of Forest Gate Unit 14. 3 That agreement called for closing on July 31, 2002. The relevant terms of both agreements are the same. 4

 The Record Major Subdivision Plan for Forest Gate was approved in July 1997. Townhouses were to be constructed in two groups of six units and three groups of four units. Karins and Associates ("Karins"), an engineering firm retained by FGDC, designed a detention basin that was to operate as a sediment basin during construction and, afterwards, as a dry detention pond for stormwater management. The design was approved by the County in May 1998 and the pond was constructed by FGDC's site construction contractor in June 1998.

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2004 Del. Ch. LEXIS 66 *

Stroud v. Forest Gate Development Corporation, Inc. Diamond v. Forest Gate Development Company.

Disposition: Plaintiffs held entitled to specific performance of their contracts and to declaratory judgment establishing their right to recover differential costs. Plaintiffs' application for award of their attorneys' fees denied.


pond, stormwater, dry, majeure, space, townhouses, inspection, installed, basin, contractor, detention, site, groundwater, settlement, bottom, Buyer, terminate, reimbursement, prevailing, as-built, sediment, Interim

Contracts Law, Standards of Performance, General Overview, Real Property Law, Contracts of Sale, Enforceability, Civil Procedure, Judicial Officers, Judges, Discretionary Powers, Remedies, Specific Performance, Purchase & Sale, Formalities, Impossibility of Performance, Contract Interpretation, Ambiguities & Contra Proferentem, Defenses, Ambiguities & Mistakes, Governments, Public Improvements, Sanitation & Water