In Re Manchester Oaks Homeowners Association, Inc.

469 B.R. 631, 2012 WL 676399, 2012 Bankr. LEXIS 780
CourtUnited States Bankruptcy Court, E.D. Virginia
DecidedFebruary 29, 2012
Docket19-10549
StatusPublished

This text of 469 B.R. 631 (In Re Manchester Oaks Homeowners Association, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Manchester Oaks Homeowners Association, Inc., 469 B.R. 631, 2012 WL 676399, 2012 Bankr. LEXIS 780 (Va. 2012).

Opinion

MEMORANDUM OPINION

BRIAN F. KENNEY, Bankruptcy Judge.

This case brings to mind the adage “good fences make good neighbors.” 1 Unfortunately, the Court cannot build a wall for these neighbors. The Court, therefore, is left with the task of determining which, if any, of the claimants have allowable claims, and which do not.

The matter comes before the Court on the Objections of Creditors Patrick K. Batt, Rudolph J. Grom, and James R. Martin, Jr. (the “Objecting Parties”) to the Proofs of Claim of Hector Daniel Rodriguez (Claim No. 10), Donna M. Milton (Claim No. 15), Aradom Iyob (Claim No. 17), Alice Wong (Claim No. 18), Lynn Jason Trust (Claim No. 19), Ron Buzón (Claim No. 20), Tesfai Berhe (Claim No. *635 21), Jonathan L. Hacker (Claim No. 24), Mansour M. Negash (Claim No. 25), Richard J. Kacik (Claim No. 29), Jessica Thrasher-Wilson (Claim No. 30), and Gregory Nowakowski (Claim No. 31). For reasons that will become apparent, the Court will refer to the Kacik, Thrasher-Wilson, and Nowakowski claims as the “Garage Owners’ Claims.” The remainder of the claims will be referred to as the “Non-Garage Owners’ Claims.” Further, for the reasons stated below: (a) the Court will sustain the Objections to the Garage Owners’ Claims; and (b) will overrule the Objections to the Non-Garage Owners’ Claims. 2

Findings of Fact

In September 1989, the developer of the Manchester Lakes subdivision recorded a Declaration of Covenants, Conditions and Restrictions for Neighborhood Five, now known as the Manchester Oaks subdivision. Movant’s Exh. A-I. The Declaration established a Homeowners’ Association (the “Association,” or the “HOA”), and in the Section setting out the HOA’s powers, provided, in part, that the HOA could:

... make and enforce rules and regulations governing the use of parking areas within the Common Area, specifically including the right to designate a maximum of two parking spaces within the Common Area for the exclusive use of the Owner of each Lot; provided, however, that nothing herein shall require the Association to make any such designations or to ensure that the parking spaces are available for the use of any particular owner of a Lot, nor shall the Association be required to supervise or administer the use of the parking lots located within the Common Areas.

Objecting Parties’ Exh. A-I, Sec. 2.3.18.

In October 1997, the Association adopted a policy with respect to parking. Objecting Parties’ Exh. A-N. The Parking Policy made formal the previous, informal policy, instituted by the developer, which allocated two spaces to the townhomes that did not have garages, and no spaces to the townhomes that had garages and driveways. This was a common sense solution to the problem of limited parking in a community of townhomes, since the garage owners had space to park their cars in their garages and driveways. The Association issued a set of Rules and Regulations, under which homeowners were enjoined to avoid: “[pjarking in a reserved space without the consent of the resident to whom the space is assigned.” Objecting Parties’ Exh. A-K, Sec. 3-7, ¶ L.

Further, to give effect to the Parking Policy, the Association had the curbs painted in front of the non-garage town-homes with either the last two digits of the street address for the property or the Lot number. Nowakowski’s Exh. 5, p. 2. The Association also put up signs, warning that offending vehicles would be towed.

Each of the Non-Garage Owners purchased their units in rebanee, at least in part, on the Parking Policy. It was made apparent to each of them, by the HOA, that there were two allocated spaces for their homes. This was the result of the painting on the curbs, the language of the Rules and Regulations, quoted above, and the fact that there were signs posted, warning violators that their vehicles would be towed, should they park in the designated spaces. None of the Non-Garage *636 Owners were given any reason to believe that the Parking Policy would, or could, change at any time in the future. Ail of the Non-Garage Owners testified adamantly that they would not have purchased their townhomes, had the homes not been allocated parking spaces, or had they been of the understanding that the policy could change at some time in the future. Sometime in 2009, the Association attempted to ratify the Parking Policy by adopting an Amendment to Declaration. Each of the Garage Owners voted in favor of the proposed Amendment. Objecting Parties’ Exhs. B-R, B-S, & B-T.

Ail was not well with the other garage owners, however. In fact, incensed by the Parking Policy, three of the garage owners (Messrs. Batt, Grom and Martin) filed suit in the Circuit Court of Fairfax County to have the Parking Policy overturned. After seven days of trial, the Circuit Court: (a) ruled, for a variety of reasons, that the 2009 Amendment was ineffective and was never properly adopted by the required super-majority of the Manchester Oaks homeowners; (b) overturned the Parking Policy, ruling that it was inconsistent with Section 2.3.18 of the Declaration, quoted above; (c) awarded Mr. Batt $27,355 in compensatory damages, Mr. Grom $27,355 in compensatory damages, and Mr. Martin $2,468 in compensatory damages; and (d) awarded Plaintiffs Batt and Grom $188,840.69 in attorney’s fees and costs pursuant to Virginia Code § 55-515. Objecting Parties’ Exh. C-I. The Association appealed to the Virginia Supreme Court. 3 Unable to pay the awarded damages and attorney’s fees, nor to obtain a supersede-as bond while the appeal was pending, the Association filed for Chapter 11 bankruptcy in this Court on January 10, 2011. 4

During the course of the bankruptcy case, the following parties filed Proofs of Claim, to which Messrs. Batt, Grom, and Martin now object: 5

Claimant Claim No. Claim Amount
Hector Daniel Rodriguez 10 $ 69,000.00
Donna M. Milton 6 15 $ 68,000.00
Aradom Iyob 17 $ 68,000.00
Alice Wong 18 $ 68,000.00
Lynn Jason Trust 19 $ 69,000.00
Ron Buzón 20 $ 68,000.00
Tesfai Berhe 21 $ 68,000.00
Jonathan L. Hacker 24 $ 68,000.00
Mansour M. Negash 25 $ 68,000.00
Richard J. Kacik 29 $120,654.15
Jessica Thrasher-Wilson 30 $ 75,000.00
Gregory Nowakowski 31 $ 62,355.00

The Court heard evidence with respect to each of the Claims. The matter is now ripe for a decision.

Jurisdiction

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334

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Cite This Page — Counsel Stack

Bluebook (online)
469 B.R. 631, 2012 WL 676399, 2012 Bankr. LEXIS 780, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-manchester-oaks-homeowners-association-inc-vaeb-2012.