Farran v. Olde Belhaven Towne Owners' Ass'n

80 Va. Cir. 508, 2010 Va. Cir. LEXIS 92
CourtFairfax County Circuit Court
DecidedJuly 8, 2010
DocketCase No. CL-2009-11786
StatusPublished
Cited by1 cases

This text of 80 Va. Cir. 508 (Farran v. Olde Belhaven Towne Owners' Ass'n) is published on Counsel Stack Legal Research, covering Fairfax County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farran v. Olde Belhaven Towne Owners' Ass'n, 80 Va. Cir. 508, 2010 Va. Cir. LEXIS 92 (Va. Super. Ct. 2010).

Opinion

By Judge Jonathan C. Thacher

This matter comes to the Court on Defendant Olde Belhaven Towne Owners’ Association’s (“Belhaven”) Demurrer. Upon consideration of the pleadings, the arguments of counsel, and the applicable governing authorities, the Court sustains the Demurrer in part and overrules the Demurrer in part.

Background

Samir and Maria Farran purchased a parcel of property (“the Property”) that is part of the Olde Belhaven Towne Owners’ Association (“Belhaven”). Belhaven is incorporated as a Virginia non-stock [509]*509corporation. The Property is subject to certain land use rights and restrictions that are set forth in Belhaven’s governing documents, which include Articles of Incorporation (“Articles”), Declaration of Covenants, Conditions and Restrictions (“Declaration”), Bylaws (“Bylaws”), and Guidelines of the Architectural Control Committee (“Guidelines”).

On February 19, 2009, the Belhaven board of directors (“Board”) enacted Resolution No. 2009-1 (“Penalties Resolution”) which, among other things, allows the Board to enforce use restrictions by levying fines. According to the Farrans, prior to the adoption of the Penalties Resolution, Belhaven had never fined homeowners in the enforcement of use restrictions. In fact, Article XIII, § 3, of the Declaration only provides for enforcement actions “by any proceeding at law or in equity.” Believing the Penalties Resolutions exceeded Belhaven’s authority under its governing documents, the Farrans sent several letters to Belhaven throughout April, June, and July 2009 requesting that Belhaven repeal the Penalties Resolutions. The Board refused to do so.

In the midst of protesting Belhaven’s enactment of the Penalties Resolution, the Farrans also submitted a request to Belhaven for approval to build a new roof and deck for their home. Pursuant to Article IX, § 1, of the Bylaws and Article VIII of the Declaration, Belhaven has appointed an Architectural Control Committee (“Committee”). Article VIII of the Declaration specifically states that no structure may be built without approval “by the Board of Directors of the Association or by an architectural committee.” If the Committee denies an architectural request, such as the one made by the Farrans, a member of Belhaven can appeal that decision to the Board pursuant to Guideline 11. On July 15, 2009, the Board denied the Farrans’ request, even though the Committee had taken no action on the request. The Farrans contend that Belhaven’s Board only has appellate authority to review the determination of the Committee; therefore, its actions were ultra vires and arbitrary.

The Farrans filed a two-count Complaint against Belhaven seeking a Declaratory Judgment and Injunction under Va. Code § 13.1-828. The Farrans allege that Belhaven exceeded its authority by enacting the Penalties Resolution and by denying the Farran’s architectural request.

Analysis

A demurrer tests the legal sufficiency of a pleading and should be sustained if the pleading, considered in the light most favorable to the plaintiff, fails to state a valid cause of action. Va. Code Ann. § 8.01-273; [510]*510Welding, Inc. v. Bland County Serv. Auth., 261 Va. 218, 226, 541 S.E.2d 909, 914 (2001). A party’s pleading must set forth specific facts constituting a “foundation in law” for the judgment sought, and not merely conclusions of law. Kitchen v. City of Newport News, 275 Va. 378, 385, 657 S.E.2d 132, 136 (2008). Moreover, the court must admit as true all of the material facts properly alleged, as well as those that may be fairly and justly inferred from those facts. Cox Cable Hampton Roads, Inc. v. City of Norfolk, 242 Va. 394, 397, 410 S.E.2d 652 (1991). When, as in this case, a demurrant’s motion craving oyer has been granted, the court in ruling on demurrer may consider the facts alleged as amplified by any written attachment added to the record on the motion. Hechler Chevrolet, Inc. v. General Motors Corp., 230 Va. 396, 398, 337 S.E.2d 744, 746 (1985).

A. Penalties Resolution

The Farrans claim that Belhaven’s enactment of the Penalties Resolution was ultra vires. An ultra vires act is an act “beyond the scope of power allowed or granted by a corporate charter or by law.” Black’s Law Dictionary (8th ed. 2004). The ultra vires doctrine applies to corporate entities such as property owners’ associations. See Bennett v. Loudoun Valley Home Owners’ Ass’n, 73 Va. Cir. 466 (Loudoun County 2007) (overruling a demurrer to plaintiffs claim that defendant’s acts were ultra vires). Furthermore, Va. Code § 13.1-828 specifically allows a member of a non-stock corporation to challenge an action of the corporation as ultra vires.

Belhaven contends that Va. Code § 55-513(B) of the Property Owner’s Association Act (“POAA”) expressly authorizes Belhaven to impose fines such as those included in the Penalties Resolution. Va. Code § 55-513(B) provides in pertinent part:

The board of directors shall also have the power, to the extent the declaration or rules and regulations duly adopted pursuant thereto expressly so provide, to ... assess charges against any member for any violation of the declaration or rules and regulations for which the member or his family members, tenants, guests, or other invitees are responsible.

The Farrans argue that the POAA does not grant Belhaven the plenary authority it claims.

[511]*511In their initial brief, the Farrans also claimed that the POAA did not apply to Belhaven because Va. Code. § 55-508(A) states that the POAA “shall not be construed to affect the validity of any provision of any prior declaration; however, to the extent the declaration is silent, the provisions of this chapter shall apply.” The Farrans asserted that, because the Declaration is not silent as to enforcement, the POAA did not apply. In their supplemental brief, the Farrans state that there is no dispute that the POAA applies to Belhaven. As the Farrans no longer dispute the applicability of the POAA, the Court will not address that argument.

Instead, the Farrans contend that this clause limits a board of directors’ authority to impose fines; specifically, a board of directors cannot impose fines unless an association’s declaration expressly authorizes such action. The Farrans point to Article XIII, § 3, of the Declaration and argue that the sole method to enforce the provisions of the Declaration or other rules and regulations is through a lawsuit.

Belhaven claims that the Farrans misconstrue the clause in Va. Code § 55-513(B) because they ignore the conjunction “or.” Belhaven asserts that Va. Code § 55-513(B) creates two instances under which an association can impose fines. An association can impose fines (1) to the extent the declaration expressly provides for imposition of fines, or (2) to the extent rules and regulations duly adopted pursuant to the declaration provides for imposition of fines.

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Related

Farran v. Olde Belhaven Towne Owners' Ass'n
83 Va. Cir. 286 (Fairfax County Circuit Court, 2011)

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Bluebook (online)
80 Va. Cir. 508, 2010 Va. Cir. LEXIS 92, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farran-v-olde-belhaven-towne-owners-assn-vaccfairfax-2010.