Karey Burkholder ("Burkholder) and Douglas Thompson, Jr. ("Thompson") (collectively "B&T") filed suit on October 30, 2020 in Arlington Circuit Court against Palisades Park Owners Association, Inc. ("Palisades" or "Association"), Richard Shewell, Jr. individually and d/b/a "Neighborhood Inspections" and "Neighborhood Inspections, LLC" ("Shewell"), and Neighborhood Inspections LLC. B&T only named Palisades as a defendant in Count I of the original Complaint, which alleged each Defendant violated the Virginia Property Owners Association Act ("VPOAA") § 55.1-1805 because B&T characterized the use of association general assessments to pay for lot inspections to determine member compliance with Palisades' governing documents as "illegal inspection fees." Thereafter, B&T filed a single count Amended Complaint against Palisades and Shewell captioned: "Violation of VPOAA § 55.1-1805 and Palisades' Declaration and Bylaws (against all Defendants)." After the trial court overruled Palisades and Shewell's demurrers to the Amended Complaint, the parties completed discovery and prepared for trial.
The case went to trial on September 2, 2021. On the morning of trial, while counsel for Palisades and Shewell were waiting outside the courtroom, B&T's counsel informed them that B&T intended to nonsuit their entire case against Shewell and the portion of Count I seeking declaratory and injunctive relief for the alleged violation of Palisades' Bylaws.
A bench trial ensued on B&T's request for declaratory and injunctive relief against the use of Palisades' annual assessments to pay for lot compliance inspections. After B&T's case-in-chief, Palisades moved to strike the evidence, which the trial court sustained.
B&T filed a Motion to Reconsider, which the trial court denied. B&T also filed a Motion to Admit Rebuttal Exhibits and a supporting memorandum; however, B&T failed to bring that motion on for a hearing and, therefore, failed to preserve the arguments raised in that motion and supporting memorandum for appellate review.
B&T appealed the Trial Court's decision to the Court of Appeals. They pursued four assignments of error in the Court of Appeals. B&T and Palisades briefed the assignments of error in the Court of Appeals and participated in oral argument on October 19,2022. A three-judge panel of the Court of Appeals issued a split decision on February 7, 2023 with the Honorable Stuart A. Raphael writing for the majority. The Honorable Clifford L. Athey, Jr. dissented. The majority opinion reversed the Trial Court's decision to sustain Palisades' Motion to Strike the Plaintiffs Evidence and concluded judgment should be entered for B&T. The Court of Appeals remanded
the case to the Trial Court to determine the appropriate remedy and to determine the reasonable attorneys' fees to award B&T as the prevailing parties.
This appeal to the Supreme Court of Virginia presents a matter of first impression because, other than the intermediate appellate court's decision in this case, no other appellate court in the Commonwealth of Virginia has interpreted or construed the meaning of Virginia Code § 55.1-1805, which is at the heart of this appeal.
The Court of Appeals of Virginia misinterpreted the term "expressly authorized" in Virginia Code § 55.1-1805, thereby creating an excessively stringent standard that will undermine and prohibit common interest communities throughout the Commonwealth of Virginia from taking the reasonably necessary steps to enforce their declarations and maintain community property values. Each common interest community's declaration sets the framework for the scope association's authority and responsibilities. The standard employed by the Court of Appeals' majority opinion creates an overly restrictive and unduly burdensome requirement that each association's declaration must specifically state all actions for which the Association may pay its agent or employee to take on its behalf if the action does not relate specifically to the common elements. This requirement will create a tidal wave of litigation throughout the Commonwealth and will result in common-interest communities trying to list every potential action it may ever ask an agent or employee to take on its behalf in the declaration. Such a standard is untenable and will result in unwieldly, confusing, and hopelessly inconsistent declarations. Moreover, it will undermine common-interest communities' ability to maintain property values, which is one of the fundamental purposes for their existence.
Additionally, the decision from which an appeal is sought was rendered by a three-judge panel of the Court of Appeals of Virginia, not the entire court sitting en bane. The three-judge panel divided 2-1 in favor of reversing the trial court's favorable ruling for the Association. The presence of a well-reasoned dissent from the panel's majority decision, combined with the lack of any appellate judicial gloss on the statute in question, present compelling reasons for the Supreme Court of Virginia to seriously consider accepting the Association's appeal.
Amicus Brief
Court: Supreme Court of Virginia
Topic: Assessment Use
Brief Author: Brendan P. Bunn, Esq., CCAL, Daniel D. Blom, Esq., Tiago D. Bezerra, Esq., Chadwick, Washington, Moriarty, Elmore & Bunn, P.C., Fairfax, Virginia
Filed: October 10, 2023
CAI Amicus Review Panel:
Mr. Robert Diamond, Esq., CCAL, Co-Chair of Amicus Committee (VA)
Mr. Edmund Allcock, Esq., CCAL, Co-Chair of Amicus Committee (MA)
Mr. Brian Fellner, Esq. (MD)
Mr. Gary Daddario, Esq., CCAL (NH)
Mr. Todd Skowronski, Esq. (MI)