Robinson-Huntley v. G.W. Carver Mut. Homes Ass'n

• Court: Supreme Court of Virginia
• Decided: April 17, 2014
• Docket: 131065
• Status: Published

Opinion

PRESENT: All the Justices

CAROL ROBINSON-HUNTLEY OPINION BY v. Record No. 131065 JUSTICE WILLIAM C. MIMS April 17, 2014 GEORGE WASHINGTON CARVER MUTUAL HOMES ASSOCIATION, INC.

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY Louise M. DiMatteo, Judge

In this appeal, we consider whether a contract obligated a

real estate cooperative to make plumbing repairs and whether

the circuit court abused its discretion by declining to award

attorneys’ fees under Code § 55-492(A).

I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW

In 1998, Carol Robinson-Huntley inherited an interest in

the George Washington Carver Mutual Homes Association, Inc.

(“the Association”), a real estate cooperative created in 1949.

She became a member of the cooperative and executed a mutual

ownership contract (“the Contract”) with the Association.

Under the Contract, Robinson-Huntley acquired a possessory

interest in a unit identified as 1352 South Rolfe Street in

Arlington, Virginia. A paragraph of the Contract (“the Provide

and Pay Provision”) required that “[t]he Association shall . .

. provide and pay for property including the [m]ember’s

dwelling, except that the [m]ember shall make minor interior repairs and provide all interior and decorating.” (Emphasis in

original.)

In 2011, Robinson-Huntley began experiencing significant

problems with the plumbing in her unit, temporarily rendering

the sinks and toilets inoperable. A plumber determined that

the problem was caused by deterioration in the pipes under the

floors and within the walls of her unit. The pipes needed to

be replaced at a cost of $6000. Robinson-Huntley informed the

Association, which replied through counsel that all the units

had plumbing issues; it said that it did not have the funds to

resolve them all.

Robinson-Huntley filed a complaint alleging, among other

things, that the Provide and Pay Provision obligated the

Association to replace the pipes. While the complaint was

pending, the Association adopted an amendment (“the Conflict

Provision”) to its bylaws providing that they would control in

the event of any conflict between them and a member’s mutual

ownership contract. It also adopted an amendment (“the Repair

Provision”) providing that

units and other services and necessities shall be made available to the member . . . at their expense. The monthly fees . . . as determined by the Board of Directors[] shall be sufficient to enable the [Association] to meet as best as it can under the circumstances[] its taxes, pay fixed and operating expenses, and build up

2 necessary reserves including a general reserve for contingencies and special reserves to take care of repairs, maintenance, replacements, and vacancies, taking into consideration the long term plans of the [Association] and the current condition of the [u]nits.

Robinson-Huntley thereafter filed a second amended

complaint in which she again alleged that the Provide and Pay

Provision obligated the Association to replace the pipes. She

also alleged that the Association withheld financial records

from her and failed to conduct an audit required by the bylaws.

She sought declaratory judgments that (1) she was entitled to

the Association’s financial records under Code § 55-474, (2)

the Association was obligated under the Agreement to repair

common areas, which included replacing the pipes, and (3) the

Conflict Provision was invalid. She also sought injunctions to

compel the Association to (1) perform an audit, (2) appoint a

finance committee and prepare a budget, and (3) replace the

pipes. She also sought an award of attorneys’ fees under Code

§ 55-492(A).

The Association filed a demurrer, which the circuit court

sustained as to Robinson-Huntley’s claim for an injunction

compelling the Association to perform an audit. Following a

bench trial on the remaining claims, the court awarded

Robinson-Huntley (1) an injunction requiring the Association to

appoint a finance committee and prepare a budget and (2) a

3 declaratory judgment that the Conflict Provision was invalid.

The court entered judgment for the Association on all remaining

claims. It also declined to award attorneys’ fees to either

party.

We awarded Robinson-Huntley this appeal.

II. ANALYSIS

A. CONSTRUING THE CONTRACT

In her first assignment of error, Robinson-Huntley asserts

that the circuit court erred by concluding that the Provide and

Pay Provision did not obligate the Association to replace the

pipes. She first argues that the Contract is unambiguous and

clearly requires the Association to make the repair. She also

argues in the alternative that, if the Contract is ambiguous,

the ambiguity must be resolved against the Association, which

drafted it.

These arguments present questions of both law and fact.

“The question whether the language of a contract is ambiguous

is a question of law which we review de novo.” Eure v. Norfolk

Shipbuilding & Drydock Corp., 263 Va. 624, 631, 561 S.E.2d 663,

667 (2002). “Contract language is ambiguous when it may be

understood in more than one way or when it refers to two or

more things at the same time. However, a contract is not

ambiguous merely because the parties disagree as to the meaning

4 of the terms used.” Id. at 632, 561 S.E.2d at 668 (internal

citation, alteration, and quotation marks omitted).

“When an agreement is plain and unambiguous on its face,

the Court will not look for meaning beyond the instrument

itself. However, when a contract is ambiguous, the Court will

look to parol evidence in order to determine the intent of the

parties.” Id. at 632, 561 S.E.2d at 667-68 (citation omitted).

The plaintiff then bears the burden of proving that the parties

intended the meaning that results in a breach of contract by

the defendant. Id. at 631, 561 S.E.2d at 667. Whether the

plaintiff has met that burden is a question of fact, and “we

will only reverse the finding of the trial court if it is

plainly wrong or without evidence to support it.” Id.

The obligation to “provide and pay for property including

the [m]ember’s dwelling” may be understood in more than one

way. It may mean, as Robinson-Huntley argues, that the

Association is required to replace the pipes because the

proviso immediately following that language--“except that the

[m]ember shall make minor interior repairs and provide all

interior and decorating”--implies that other repairs are the

responsibility of the Association. However, “provide and pay

for” may also mean nothing more than that the Association must

acquire title to property at its own expense, and thereafter

make it available to its members for their use as dwellings.

5 While the Association’s bylaws and articles of

incorporation are incorporated into the Contract, neither they

nor any other provision of the Contract sheds any light on this

question. Accordingly, we conclude that the Contract is

ambiguous. The ambiguity may be resolved by ascertaining the

intent of the parties reflected in the extrinsic evidence

adduced at trial. Eure, 263 Va. at 632, 561 S.E.2d at 667-68.

The evidence discloses that Robinson-Huntley’s

predecessor-in-interest also signed a mutual ownership

contract, which included language similar to the Provide and

Pay Provision. However, the two contracts differ in one

significant respect: the corresponding provision in the older

contract provides that “[t]he Association shall . . . provide

and pay for all necessary current repairs, maintenance, and

replacements of Project property including the [m]ember’s

dwelling, except that the [m]ember shall make minor interior

repairs and provide all interior painting and decorating.”

(First and third emphases added.)

The circuit court found this difference compelling. The

older contract included an explicit requirement to repair,

maintain, and replace but the Association subsequently removed

it from the Provide and Pay Provision. The omission of a term

from a written contract evidences intent to exclude it.

Bentley Funding Group, L.L.C. v. SK&R Group, L.L.C., 269 Va.

6 315, 330, 609 S.E.2d 49, 56 (2005). Accordingly, the evidence

that the Association removed the obligation from the Provide

and Pay Provision supports the circuit court’s conclusion that

the Association intended to be relieved from that obligation

under the Contract.

Further, the acts of the parties in relation to a contract

establish a practical construction of it. Roanoke Ry. & Elec.

Co. v. Virginian Ry. Co., 159 Va. 289, 293, 165 S.E. 398, 399,

(1932). “The practical construction of a contract by the

parties themselves is entitled to great weight in determining

its proper interpretation.” Coal Operators Cas. Co. v. C. L.

Smith & Son Coal Co., 192 Va. 619, 626, 66 S.E.2d 521, 525

(1951).

The evidence establishes that the Association repaired the

units’ roofs and canopies in 2010, consistent with a practice

of making repairs when a common problem affected several units

and the funds were available to make the repairs for everyone

who needed them. By contrast, Robinson-Huntley was unable at

trial to identify an example of the Association ever

undertaking repairs similar to those she sought.

Taken together, this evidence of the change in the Provide

and Pay Provision and the practical construction of the

Contract by the parties supports the circuit court’s finding

that Robinson-Huntley failed to prove that they intended the

7 Association to make the repairs she sought. Therefore, the

court’s finding is not plainly wrong or without evidence to

support it and it will be affirmed. Eure, 263 Va. 631, 561

S.E.2d at 667. *

B. ATTORNEYS’ FEES

In her final assignment of error, Robinson-Huntley asserts

that the circuit court erred by declining to award her

attorneys’ fees under Code § 55-492(A). She argues that the

court incorrectly ruled that she was not adversely affected by

the Conflict Provision, under which the bylaws would prevail if

any conflict existed between them and the Contract. If she had

not succeeded in challenging the Conflict Provision, she

continues, the Association would have been empowered to modify

the Contract unilaterally by amending the bylaws to create such

a conflict.

* We have often applied the rule that Robinson-Huntley advocates in this case, that an ambiguous contract is to be construed against the drafter. E.g., Doctors Co. v. Women's Healthcare Assocs., 285 Va. 566, 573, 740 S.E.2d 523, 526 (2013) (citing cases). While the rule assists courts in resolving ambiguities where there is no extrinsic evidence of the parties’ intent or where such evidence is in equipoise, this is not such a case and we will not apply the rule here. See Boulware v. Newton, 59 Va. (18 Gratt.) 708, 721 (1868) (declining to apply the rule where other rules of construction resolved the question); cf. Charles E. Russell Co. v. Carroll, 194 Va. 699, 701-02, 74 S.E.2d 685, 687 (1953) (stating “this rule of construction is not favored by the courts”).

8 The question of whether a party is adversely affected by a

failure to comply with a real estate cooperative’s bylaws has

nothing to with the question of whether the party may be

awarded attorneys’ fees under Code § 55-492(A). The statute

states that

If a declarant or any other person subject to this chapter fails to comply with any provision hereof or any provision of the declaration of bylaws, any person or class of persons adversely affected by the failure to comply has a claim for appropriate relief. Punitive damages may be awarded for a willful failure to comply with this chapter. The court, in an appropriate case, may award reasonable attorney's fees.

Code § 55-492(A).

Robinson-Huntley argues that the term “adversely affected”

as used in the statute is intended to require the plaintiff in

any such action to have standing to sue. She analogizes to

Code § 15.2-2314, which permits “[a]ny person aggrieved by any

decision of [a] board of zoning appeals” to file a petition for

certiorari to obtain appellate review of that decision by the

appropriate circuit court.

We need not address this argument because whatever the

term “adversely affected” may mean in Code § 55-492(A), it is

not relevant to an award of attorneys’ fees. The language

providing for an award of attorneys’ fees follows two sentences

9 after the term “adversely affected.” The decision whether to

award attorneys’ fees is based not on whether the plaintiff is

“adversely affected” but on whether the case is “appropriate.”

We review that determination for abuse of discretion.

The “three principal ways” by which a court may abuse its

discretion occur “when a relevant factor that should have been

given significant weight is not considered; when an irrelevant

or improper factor is considered and given significant weight;

and when all proper factors, and no improper ones, are

considered, but the court, in weighing those factors, commits a

clear error of judgment.” Landrum v. Chippenham & Johnston-

Willis Hosps., Inc., 282 Va. 346, 352, 717 S.E.2d 134, 137

(2011) (quoting Kern v. TXO Production Corp., 738 F.2d 968, 970

(8th Cir. 1984)).

The circuit court observed that “I don’t believe under

[Code § 55-492(A)] that [Robinson-Huntley] has prevailed in

terms of showing adversity in this instance.” As noted above,

that is not a proper factor for the court’s consideration of

awarding attorneys’ fees under the statute. However, while

Robinson-Huntley asserts the court erred by concluding that

there was no adversity, she does not assign error to the

court’s reliance on this improper factor in reaching its

decision. We therefore will not reverse it.

10 III. CONCLUSION

For the foregoing reasons, we will affirm the judgment of

the circuit court.

Affirmed.