Gordon Properties, L.L.C. v. First Owners' Ass'n of Forty-Six Hundred Condominium, Inc.

79 Va. Cir. 683, 2008 Va. Cir. LEXIS 189
CourtAlexandria County Circuit Court
DecidedJune 20, 2008
DocketCase No. (Civil) CL08001432
StatusPublished

This text of 79 Va. Cir. 683 (Gordon Properties, L.L.C. v. First Owners' Ass'n of Forty-Six Hundred Condominium, Inc.) is published on Counsel Stack Legal Research, covering Alexandria County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gordon Properties, L.L.C. v. First Owners' Ass'n of Forty-Six Hundred Condominium, Inc., 79 Va. Cir. 683, 2008 Va. Cir. LEXIS 189 (Va. Super. Ct. 2008).

Opinion

By Judge lisa B. Kemler

On June 11,2008, this Court sustained the demurrer of defendants First Owners’ Association of Forty-Six Hundred Condominium, Inc. (“FOA”) and the Board of Directors of FOA (“the Board”) as to Count I of the Verified Complaint with leave to amend to state a breach of contract claim. The demurrer was overruled as to Counts IV and V. The Court also sustained the demurrer of the individual Board member defendants as to Count I with leave to amend, with the exception that leave to amend was not granted with respect to a claim under Virginia Code § 55-79.53 other than claims of noncompliance against the individual defendants as unit owners, not Board members. With regard to the demurrers of the individual defendants to the other counts (II through VI), the Court did not rule and the parties are in agreement that the Court should decide the demurrer to those counts based upon the pleadings previously submitted.

[684]*684 Count II

In Count II, the plaintiff alleges that the FOA, by and through the Board, lacks the authority to take the actions challenged in this lawsuit. The Bylaws provide that a member of the FOA may sue an individual Board member only for “willful misconduct and bad faith.” The allegations in the Verified Complaint do not allege a single act by an individual Board member, but rather, are directed towards the actions of the eritity that is the Board. The plaintiff argues that, while it does not seek to hold the individual defendants liable, the Nonstock Corporation Act permits the individuals to be named as defendants. However, pursuant to Virginia Code § 13.1-870, a director of a nonstock corporation shall discharge his duties as a director in accordance with his good faith business judgment of the best interest of the corporation. Thus, a director is not liable for any action taken as a director, or any failure to take such action, if he performed the duties of his office in compliance with § 13.1-870. See Virginia Code § 13.1-870(C). A director is subject to suit, limited by § 13.1-870.2(B), if he fails to comply with § 13.1-870, and the limitation contained in § 13.1-870.2(B) does not apply if the director acts willfully or criminally. The Verified Complaint contains no allegations that the individual defendants acted in derogation of his or her duties. For these reasons, the demurrer of the individual defendants to Count II is sustained with leave to amend if the plaintiff so chooses within fourteen days hereof.

Count III

The plaintiff seeks a constructive trust and to have the FOA, by and through the Board, provide an accounting. Although Count m alleges that the “defendants” have intentionally and recklessly commingled the reserve funds, there are no specific allegations relating to the individual defendants. The Court is not aware of any authority that suggests that the relief sought in Count IH cannot be had against an entity such as a corporate Board. The demurrer of the individual defendants to Count HI is sustained.

Count IV

In this Count, the plaintiff alleges that the FOA has been unjustly enriched by the plaintiffs payment of fees and rent improperly assessed and the plaintiff seeks restitution in the amount of $4,300. The Verified Complaint does not allege that any individual defendant has been unjustly enriched. For these reasons, the demurrer of the individual defendants is sustained.

[685]*685 Count V

Count V seeks a judicial decree dissolving the FOA. Not only does the plaintiff not seek relief against the individual defendants but Virginia Code § 13.1-909(D) specifically provides: “It is not necessary to make directors or members parties to a proceeding to be brought under this section unless relief is sought against them individually.” The demurrer of the individual defendants is, therefore, sustained.

Count VI

In Count VI plaintiff seeks the entry of declaratory judgment “which finds that it has paid all proper assessments charged to it and that it is entitled to all of its rights as an owner and member of the FOA.” There being no allegation specific to any conduct on the part of the individual board members, their demurrer to this count is sustained.

January 29, 2009

At the conclusion of the January 14th hearing on the parties’ motions for partial summary judgment, the Court took up the matter of the order of trial and whether certain matters would be submitted to the jury for factual determinations. Specifically, the Court ruled that, as to Count EL and Count V, the jury would be asked to decide whether the individual directors acted willfully or acted in good or bad faith. Since the hearing, I have had an opportunity to review the transcript of the hearing on December 29, 2009, concerning the motion for a protective order. In view of the arguments presented on the motion, I have concluded that my ruling on January 14th was, in part, in error. As to Count n, whether the directors acted in good faith or bad faith in applying the condominium instruments is irrelevant and, therefore, there is no need for the jury to make a factual finding as to the good or bad faith of the directors. As to Count V, the plaintiff is seeking judicial dissolution of the association and alleges that the directors “have acted, are acting, and will act in a manner that is illegal, oppressive, and fraudulent.” On this issue, the jury would need to make a factual finding as to the conduct of the directors.

February 3, 2009

Before the Court is the Motion of Defendants Gilliam, Brungart, Moore, Pepper, and Figueroa to Quash Subpoenas. Having considered the arguments of counsel, the Court denies the motion, but directs Mr. Scully to [686]*686designate a specific morning or afternoon during the Plaintiffs case-in-chief when the aforesaid Defendants will be called. In denying the motion, the Court is not ruling that the testimony of these Defendants is relevant or admissible.

February 23, 2009

Before the Court is Gordon Properties, L.L.C.’s (“Gordon Properties”) request, as set forth in Count I of the First Amended Complaint, for a permanent injunction requiring the First Owners’ Association of Forty Six Hundred Condominium (the “FOA”) and the Board of Directors of the FOA (the “Board”) “to perform their obligations under the Condominium Declaration and By-Laws of the FOA and specifically prohibiting the FOA and the Board from (i) assessing Gordon Properties based upon Assessment values calculated using... any method other than the method set forth in the Condominium instruments, (ii) using reserve funds appurtenant to Gordon Properties’ Units for replacement of General or Limited Common Elements other than those to which Gordon Properties’ Units are appurtenant; (iii) charging Gordon Properties a rental fee for the Residential/Commercial Limited Common Elements (single-user) that it owns; (iv) collecting maintenance Assessments from Gordon Properties as owner of a Street-Front Commercial Unit; and (v) requiring the FOA to reimburse Gordon Properties for all improper and unauthorized assessments paid by it.” (First Amended Complaint at pp. 20-21, paragraphs (a)(i)-(v).)

Regarding subparagraph (iv) above, in an Order dated January 30, 2009, the Court granted the FOA’s Motion for Partial Summary Judgment and construed the Declaration and By-laws, together with Virginia Code Ann.

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Cite This Page — Counsel Stack

Bluebook (online)
79 Va. Cir. 683, 2008 Va. Cir. LEXIS 189, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gordon-properties-llc-v-first-owners-assn-of-forty-six-hundred-vaccalexandria-2008.