And then the fee claim died on a procedural gate

Delaware has a statute that looks, at first reading, like a straightforward loser-pays rule for deed-restriction disputes. Section 348(e) of Title 10 provides that the non-prevailing party pays the prevailing party's fees and costs.

It applies only to a trial “held pursuant to the provisions of this section” — that is, only on the expedited track § 348 creates. And Court of Chancery Rule 174(c)(2) requires a certification of § 348 eligibility attached to the complaint to get on that track.

Stonebridge filed none. The case, in the court's phrase, “proceeded in anything but expedited fashion.” No § 348 fees.

The bad-faith exception did not rescue it either — that route requires “glaring egregiousness,” and ordinary adversarial litigation over a boundary does not meet it.

The association did recover its costs as prevailing party under Court of Chancery Rule 54(d). Costs are filing fees and the like; they are not fees.

What it changes operationally

The certification is the whole thing, and it is filed at the beginning. An association that intends to recover fees in a deed-restriction case has to decide that at the moment it files, attach the Rule 174(c)(2) certification, and then actually litigate on the expedited schedule. There is no way to elect § 348 later, and no equitable workaround. This is the single cheapest mistake to avoid in Delaware association litigation and one of the most expensive to make.

Section 348 is not the only fee route, and the alternatives are weaker. DUCIOA's § 81-417(a) is discretionary, and Delaware courts have declined to award under it even to associations that largely prevailed. A contractual fee-shift in the declaration still has to survive a reasonableness analysis. None of these is the near-automatic recovery § 348 offers on its own track.

Tolerated encroachment is a documentation problem, not a title problem. The association won here because the historical use had been permissive. What made that provable was that the permission existed as a fact in the record. A board that says nothing for fifteen years while a shed creeps onto common ground is building the other side's case. A short written acknowledgement that use is permissive and revocable costs nothing and defeats the hostility element outright.

The mirror image, decided the other way

Adverse possession runs both directions in Delaware, and an association can be the one who takes. In the Swann Keys litigation, affirmed by the Delaware Supreme Court in April 2025, a civic association quieted title to two boat ramps that its recorded documents had failed to capture, on the strength of decades of open and exclusive use by the association and its members.

The two cases together describe one doctrine with a consistent hinge: whether the record owner ever asserted ownership or control. Swann Keys' paper owners never did. Stonebridge did.

What to watch next

The court also declined to hold the association in contempt of a status quo order, requiring clear and convincing evidence of a meaningful, knowing violation that the owners did not supply.

Delaware has no appellate decision construing the Rule 174(c)(2) certification requirement, and this is a Magistrate's final report rather than a Vice Chancellor's opinion. The reasoning is nonetheless the current Delaware practice, and an association's own filings will be measured against it until something says otherwise.