A Chancery Court judge has dismissed a lawsuit over a denied apartment project from one of Delaware's largest residential developers against the town of Middletown.

Capano Residential, which operates more than 6,000 multifamily apartments, in 2021 proposed building 192 apartments on open land next to the Dove Run shopping center off Route 299 in Middletown.

The Capano-owned property was approved as commercial space in 2002 and holds a commercial zoning designation that requires Capano to obtain a conditional-use permit to construct apartments. The Middletown Town Council last year denied Capano's permit application, a decision the developer challenged in Chancery Court.

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Vice Chancellor Morgan Zurn ruled last week that the court, which is a court of equity not a court of law, lacked the jurisdiction to rule on Capano's claims.

Courts of equity order remedies — a specific action or monetary damages — on principles of fairness, equity and precedent in situations not covered by the rule of law. Zurn ruled that relief is available through the law and therefore the case is not within the Court of Chancery's purview.

The decision follows the same line of thinking as a case that Zurn also dismissed last week brought against the city of Newark by a University of Delaware fraternity over the city's denial of a special-use permit.

Capano can transfer the matter to Superior Court, which is a court of law, within 60 days of the decision.

In the lawsuit, Capano called the town's denial of the apartment project "arbitrary and capricious." The company argued the denial ran counter to recent precedent established by the Middletown Town Council, citing four garden apartment projects approved in other locations that share the same type of commercial zoning.

Among the precedent-setting developments is Capano's Westown apartment complex, which the developer said the Dove Run project would be similar to. Their plans called for eight apartment buildings with 24 units each (primarily one- and two-bedroom units with a few three-bedroom units). The complex would also have a community center and a pool.

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"There is nothing about this site or this proposed use that is any different than the garden apartments that you have approved previously," John Paradee, a lawyer representing Capano, told the Town Council last year.

Mayor Kenneth Branner Jr. shared concerns about traffic and displeasure that residents of the neighboring Estates of Dove Run community bought their homes under the impression the land would be developed as a shopping center, not apartments. Other council members stated a preference to stick with the current commercial zoning and argued the project was in conflict with the town's comprehensive plan.

The Town Council denied the application in a unanimous vote.

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Contact Brandon Holveck at bholveck@delawareonline.com. Follow him on Twitter @holveck_brandon.

This article originally appeared on Delaware News Journal: Capano lawsuit over Middletown apartments dismissed