Douglas v. HKA

32 Va. Cir. 178, 1993 Va. Cir. LEXIS 753
CourtWarren County Circuit Court
DecidedOctober 21, 1993
DocketCase No. (Chancery) 92-70
StatusPublished
Cited by2 cases

This text of 32 Va. Cir. 178 (Douglas v. HKA) is published on Counsel Stack Legal Research, covering Warren County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Douglas v. HKA, 32 Va. Cir. 178, 1993 Va. Cir. LEXIS 753 (Va. Super. Ct. 1993).

Opinion

By Judge John E. Wetsel, Jr.

This case came before the Court for trial on October 13, 1993, on the Plaintiffs’ Declaratory Judgment Action to determine the rights of certain lot owners in a large, residential subdivision. The parties appeared in person with their counsel: Carter B. Foulds, Esq., for the Plaintiffs; Benjamin M. Butler, Esq., for Defendants, Marlow, Nichols, and High Knob Associates; and George W. Johnston, III, Esq., for the Defendant, High Knob, Inc. Prior to the beginning of the trial, certain plaintiffs nonsuited their cases, and the remaining plaintiffs nonsuited their right of action based on oppressive corporate conduct of the defendants. The prefiled exhibits and the depositions of Bardwell, the Douglases, Lawson, Lazear, Morgan, and Peterson, were admitted into evidence. The proposed findings of fact submitted by each party were reviewed, and nearly all the material facts were admitted by the parties. The Defendants were given until October 19, 1993, to. file a response to the Plaintiffs’ trial brief, which has been filed. Upon consideration of the facts and the memoranda and argument of counsel, the court has made the following decision.

I. Findings of Fact

The following facts have either been admitted by the parties or are found by the greater weight of the evidence.

[179]*179High Knob Subdivision, hereinafter called “High Knob,” is a development of more than 800 lots in Warren County, Virginia. High Knob contains a system of private roads, recreational facilities, water treatment and distribution facilities, and designated watershed or open space for the benefit of the lot owners at High Knob, which are hereinafter collectively referred to as “the common facilities.”

The plaintiffs are owners of lots within High Knob.

Defendant High Knob, Inc., hereinafter called “HKI,” is a Virginia corporation, which was the original developer of High Knob Subdivision. Defendant HKA, hereinafter called “HKA,” is a partnership doing business in Warren County and is the successor by purchase of HKI. Plaintiff’s Exhibit 26.

Defendants Marlow and Nichols are the general partners of HKA.

HKA is the current Developer insofar as the High Knob Owners Association and the ownership of the common facilities is concerned.

The plaintiffs are all members of the High Knob Owners Association, Inc., a Virginia corporation, which was formed by HKI in 1978.

After July 1, 1978, High Knob was a subdivision of land into one hundred or more lots wherein lots were sold pursuant to a common promotional plan and where lot purchasers have the use of common facilities within the subdivision, for which use the lot owners are assessed fees.

HKI registered High Knob with the Department of Housing and Urban Development under the Interstate Land Sales Full Disclosure Act (15 U.S.C. § 1701 et seq.) (Plaintiff Exhibits 1, 2, 5 and 6); and with the Virginia Real Estate Commission pursuant to the Virginia Subdivided Land Sales Act (§ 55-336, et seq. of the Code) (Plaintiff Exhibit 3).

HUD “Property Reports” were distributed to some prospective purchasers in the course of the sale of High Knob lots, including Douglas (1978 Report) (Plaintiff Exhibit 2A) and Lawson (1980 Report) (Plaintiff Exhibit 5). In addition, HKI prepared and filed a 1981 Property Report.

The property reports filed by HKI and the corporate documents of the Home Owners’ Association originally provided that the title" and control of the common facilities at High Knob would be transferred to the Owners Association upon the earlier occurring of two occurrences:

a. 100% completion of the common facilities; or

[180]*180b. Sale or conveyance of 75% of the lots platted in the High Knob Subdivision.

See the 1978 Report, Plaintiff Exhibit 2, p. 25; Plaintiff Exhibit 2A, p. 8; and the 1980 report, pp. 20-21, Plaintiff Exhibit 5.

The 1980 and 1981 Property Reports filed by HKI also provided that the title and control of the common facilities at High Knob would be transferred to the Owners Association upon the earlier occurring of two occurrences:

b. Sale or conveyance of 75% of the lots platted in the High Knob Subdivision.

Prior to July 1, 1978, HKI routinely sold lots at High Knob using land sales contracts. In some cases, those contracts were not completed and deeds conveyed until after July 1, 1978. HKI entered into a contract with Ingegneri, dated May 5, 1978 (Plaintiff Exhibit 8), for sale and purchase of certain property on High Knob. The deed to the property was not delivered to the purchaser until after July 1, 1978. The Ingegneri contract provided that the lots had been sold for twenty thousand dollars “of which $2,000 have been paid at the signing of this agreement . . . Purchaser . . . agrees to pay the balance in monthly installments of . . . $188.95 each, commencing on 1 July and continuing monthly thereafter until said entire balance shall have been paid

HKI made a contract with Cockerell dated June 12, 1980 (Plaintiff Exhibit 10) for sale and purchase of certain property on High Knob. This contract provided for a down payment of $1,000.00, and the Cockerells “agree to pay for the lots in 96 monthly installments of $156.34 ____”

HKI made a contract with Douglas dated July 11, 1980, (Plaintiff Exhibit 11) for sale and purchase of certain property on High Knob. In the course of and as a part of that transaction, the purchasers received a copy of the 1978 HUD Property Report.

HKI made a contract with Kaufman, dated October 6, 1985 (Plaintiff Exhibit 12) for sale and purchase of certain property on High Knob. This contract provided for a $1,500 down payment, and the balance of $8,000 was payable in “96 monthly installments . . . .”

HKI made a contract with Lawson, dated May 15, 1980, and August 10, 1980 (Plaintiff Exhibit 13) for sale and purchase of certain property on High Knob. As a part of that transaction, the purchasers received a [181]*181copy of the 1980 Property Report. The language of this contract was like that of the Ingegneri contract and provided for the payment of the balance “in monthly installments of $106.02 . . . .”

HKI made a contract with Lazear dated January 13, 1987 (Plaintiff Exhibit 14) for sale and purchase of certain property on High Knob.

HKI made a contract with Peterson dated August 9, 1981 (Plaintiff Exhibit 16) for sale and purchase of certain property on High Knob. As a part of this transaction, Peterson received a copy of a “Fact Sheet” dated June 1, 1981. This contract provided for a down payment with the balance to be paid in “94 monthly installments of $283.35 . . . .” After some date in 1981, HKI no longer distributed HUD Property Reports to prospective purchasers. Instead, purchasers were given “Fact Sheets” with questions and answers about High Knob. (Plaintiff Exhibit 18). The June 1, 1981, “Fact Sheet,” received by Peterson contains the following representations (Page 5):

We [HKI] formed an Owner’s Association in accordance with the Virginia Subdivided Land Sales Act of 1978 on 1 July, 1978 ... . You will be given one vote for each lot you own in the development.
We will be the only voting member of the association . . .

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Cite This Page — Counsel Stack

Bluebook (online)
32 Va. Cir. 178, 1993 Va. Cir. LEXIS 753, Counsel Stack Legal Research, https://law.counselstack.com/opinion/douglas-v-hka-vaccwarren-1993.