Chancery Court Vice-Chancellor Joseph Slights III on Tuesday, May 22, ordered that unless a $354,858 bond was posted within five business days by the Concerned Citizens of Fairway Village and 36 Builders Inc. — plaintiffs in cases seeking to prevent developer Fairway Cap from renting townhomes in the Fairway Village community in Ocean View — Fairway Cap could resume rentals.
The Concerned Citizens of the Estates of Fairway Village and 36 Builders had filed two separate complaints in the Court of Chancery earlier this year, after the developer of the property made it known that they would no longer be looking to sell the 120 townhomes they were building, but rather would lease them.
In their complaint, Concerned Citizens of the Estates of Fairway Village claimed Fairway Cap had breached its contract and its fiduciary duty, and was acting in a fraudulent manner.
On March 20, following oral arguments, Slights had granted a preliminary injunction to halt the rental of units by Fairway Cap.
“What I have in mind is that this is, in fact, going to be very temporary,” the judge said on March 20, noting that there was nothing in any document that would prohibit Fairway Cap from continuing construction of units under way. “There should be no further rental operations while this matter is pending.
But Slights also ruled that the temporary injunction was “conditioned upon the plaintiff’s posting a bond pursuant to Rule 65(c) ... that will cover [Fairway Cap’s] losses in the event it is determined that the injunction was improvidently granted.”
In his May 20 order, Slights stated that when the temporary injunction had been granted, no deadline had been specified as to when the plaintiffs would have to post the $354,858 bond.
“The Court will consider an application from the Fairway Defendants for its attorneys’ fees and costs incurred in defending (e.g. briefing and arguing) against the Plaintiffs’ Motions for Preliminary Injunction that resulted in the entry of the Preliminary Injunction,” wrote Slights in his May 20 order.
Slights said the plaintiffs must now post that bond by 5 p.m. on Wednesday, May 30, or Fairway Cap may resume leasing of properties that it owns in Fairway Village.
By Maria Counts