Karey Burkholder and Douglas Thompson, Jr. v. Palisades Park Owners Association, Inc.

Court of Appeals of Virginia·Decided February 7, 2023·No. 0187224·Published

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Athey, Chaney and Raphael PUBLISHED

Argued at Winchester, Virginia

KAREY BURKHOLDER AND

DOUGLAS THOMPSON, JR.

OPINION BY

v. Record No. 0187-22-4 JUDGE STUART A. RAPHAEL FEBRUARY 7, 2023

PALISADES PARK OWNERS ASSOCIATION, INC.

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY William T. Newman, Jr., Judge

Norman A. Thomas (Robert O. Wilson; Norman A. Thomas, PLLC; Wilson Law PLC, on briefs), for appellants.

William L. Mitchell, II (Richard E. Armstrong, IV; Eccleston & Wolf, P.C., on brief), for appellee.

The Virginia Property Owners’ Association Act provides that “[e]xcept as expressly authorized” in the Act or in the association’s “declaration,” an association cannot “make an assessment or impose a charge against a lot or a lot owner unless the charge is a fee for services provided or related to use of the common area.” Code § 55.1-1805. Appellee Palisades Park Owners Association, Inc. imposes an annual assessment that includes a fee for inspecting each property owner’s lot to ensure that it complies with Palisades’ rules. We conclude that this practice violates Code § 55.1-1805 because the assessment for lot-compliance inspection fees is not “expressly authorized” by Palisades’ declaration and the fees are not for services relating to “the common area.”

BACKGROUND

The material facts here are undisputed. Appellants Karey Burkholder and Douglas Thompson, Jr. (the “Homeowners”) are married and own a home in the Palisades homeowners’

association development. The Homeowners allege that Palisades is violating the Virginia Property Owners’ Association Act, Code §§ 55.1-1800 to 55.1-1836, by imposing assessments on members that fund lot-compliance inspections of every member’s property. The Homeowners argue that Code § 55.1-1805 allows such assessments only if expressly authorized in the association’s declaration. They say that Palisades’ declaration lacks that clarity.1 Palisades does not dispute that it uses its members’ assessments to pay for lot-compliance inspections. It says the inspections are needed to ensure that the members’ properties comply with Palisades’ declaration, articles of incorporation, bylaws, and architectural review board guidelines. The board of directors of Palisades obtained a legal opinion that using assessments to conduct the inspections is “consistent with the express language of the Declaration.”

Disagreeing with that conclusion, the Homeowners sued Palisades in Arlington County Circuit Court, seeking to enjoin the association from continuing to use assessment moneys to fund lot-compliance inspections.2 At the close of the Homeowners’ case-in-chief, the circuit court struck their evidence and found for Palisades. The court later awarded Palisades $67,481.68 in attorney fees based on the Act’s fee-shifting provisions in Code § 55.1-1828. The Homeowners appeal.

1 Palisades’ “Declaration, Covenants, & Restrictions,” recorded in 1995, was admitted into evidence as Plaintiffs’ Exhibit B. See generally Code § 55.1-1800 (defining “Declaration”).

2 The Homeowners also sued Richard Shewell, Jr. individually and doing business as “Neighborhood Inspections” and “Neighborhood Inspections, LLC,” but they nonsuited those claims before trial (along with certain other claims against Palisades).

ANALYSIS

A. Palisades’ declaration does not expressly authorize assessments for lot-

compliance inspections (Assignments of Error 1-2).

The Homeowners argue that Code § 55.1-1805 precludes Palisades from imposing assessments for lot-compliance inspections because such assessments are not expressly authorized in Palisades’ declaration. They claim that the circuit court thus erred in granting Palisades’ motion to strike (Assignment of Error 1) and in failing to grant judgment in their favor (Assignment of Error 2). The standard of review differs for those two claims. We view the facts in the light most favorable to the Homeowners when considering whether the court erred in striking their evidence. E.g., Dill v. Kroger Ltd. P’ship I, 300 Va. 99, 109 (2021). But we consider the facts in the light most favorable to Palisades when determining whether the Homeowners are entitled to judgment as a matter of law. E.g., Carson ex rel. Meredith v. LeBlanc, 245 Va. 135, 139-40 (1993). Because the facts are not in dispute, however, the differing standards of review make no difference in the outcome.

This case turns on the proper interpretation of Code § 55.1-1805. “Questions of statutory interpretation . . . are subject to de novo review on appeal, and we owe no deference to the circuit court’s interpretation of the statutory scheme.” Esposito v. Va. State Police, 74 Va. App. 130, 133 (2022). “When construing a statute, [the Court’s] primary objective ‘is to ascertain and give effect to legislative intent,’ as expressed by the language used in the statute.” Va. Elec. & Power Co. v. State Corp. Comm’n, 295 Va. 256, 262-63 (2018) (quoting Cuccinelli v. Rector & Visitors of the Univ. of Va., 283 Va. 420, 425 (2012)). “We must determine the legislative intent by what the statute says and not by what we think it should have said.” Miller & Rhoads Bldg., L.L.C. v. City of Richmond, 292 Va. 537, 541-42 (2016) (quoting Carter v. Nelms, 204 Va. 338, 346 (1963)).

Code § 55.1-1805 restricts the imposition of assessments to pay for services unrelated to the common area unless authorized by the Act or expressly allowed by the association’s declaration.3 The first sentence provides that “[e]xcept as expressly authorized” by the Act, by “the declaration,” or as “otherwise provided by law, no association shall . . . make an assessment or impose a charge against a lot or a lot owner unless the charge is a fee for services provided or related to use of the common area.” Code § 55.1-1805. The term “common area” means the property in a development that “is owned, leased, or required by the declaration to be maintained or operated by a property owners’ association for the use of its members and designated as a common area in the declaration.” Code § 55.1-1800. The inspections here are made of each lot owner’s individual property, so the fees are not “for services provided or related to use of the common area.” The Homeowners thus read the first sentence of the statute to forbid charging assessments that include fees for lot-compliance inspections that the Homeowners say are not expressly authorized by Palisades’ declaration or otherwise permitted by statute.

3 Code § 55.1-1805 provides:

Except as expressly authorized in this chapter, in the declaration, or otherwise provided by law, no association shall (i) make an assessment or impose a charge against a lot or a lot owner unless the charge is a fee for services provided or related to use of the common area or (ii) charge a fee related to the provisions set out in § 55.1-1810 or 55.1-1811 that is not expressly authorized in those sections. Nothing in this chapter shall be construed to authorize an association or common interest community manager to charge an inspection fee for an unimproved or improved lot except as provided in § 55.1-1810 or 55.1-1811. The Common Interest Community Board may assess a monetary penalty for a violation of this section against any (a) association pursuant to § 54.1-2351 or (b) common interest community manager pursuant to § 54.1-2349, and may issue a cease and desist order pursuant to § 54.1-2352.

1. Code § 55.1-1805 applies to Palisades’ challenged conduct.

Palisades argues at the outset that the Homeowners misunderstand Code § 55.1-1805.

Palisades says that the statute applies only “to charges imposed on an individual lot and lot owner as opposed to assessments imposed on the community as a whole.” Since assessments for lot-compliance inspections are imposed on all the lot owners, and not on the plaintiffs individually, Palisades argues that the statute is irrelevant.

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Karey Burkholder and Douglas Thompson, Jr. v. Palisades Park Owners Association, Inc., (Va. Ct. App. 2023).

Karey Burkholder and Douglas Thompson, Jr. v. Palisades Park Owners Association, Inc. (Karey Burkholder and Douglas Thompson, Jr. v. Palisades Park Owners Association, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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