Bauer v. Harn

• Decision Date: 22 January 1982
• Docket Number: No. 791213,791213
• Citation: 286 S.E.2d 192,223 Va. 31
• Parties: Richard A. BAUER, et al. v. Edwin HARN, President, etc., et al. Record
• Court: Virginia Supreme Court

Page 192

286 S.E.2d 192

223 Va. 31

Richard A. BAUER, et al. v. Edwin HARN, President, etc., et al.

Record No. 791213.

Supreme Court of Virginia.

Jan. 22, 1982.

Homer S. Carpenter, Arlington (S. Page Higginbotham, Orange, Rice, Carpenter & Carraway, Arlington, Higginbotham & Higginbotham, Orange, on briefs), for appellants.

Atwell W. Somerville, Orange (Somerville, Moore & Joyner, Ltd., Orange, on brief), for appellees.

Before CARRICO, C. J., COCHRAN, POFF, COMPTON, THOMPSON and STEPHENSON, JJ., and HARRISON, Retired Justice.

COCHRAN, Justice.

In this appeal, we decide whether the Board of Directors of a nonstock corporation operating a private, residential community exceeded its authority by granting to persons having no legal or equitable title to real estate in the community the right to enter and use the recreational facilities and amenities upon payment of annual fees. The facts have been stipulated.

Lake of the Woods, a subdivision comprising more than 2,600 acres, is a "planned residential community" approved by the Board of Supervisors of Orange County pursuant to the County Zoning Ordinance. The community includes residential lots, streets, parks, recreational facilities, and "other amenities," all privately owned. With the exception of the residential lots, the property within the subdivision is owned by Lake of the Woods Association, Inc. (the Association), a nonstock Virginia corporation.

Security personnel employed by the Association control access to the community at its entrance gate. Only residential lot owners, tenants, employees of the Association, and "guests and invitees" of lot owners and the Association may enter the subdivision.

The recorded Declaration of Restrictions applicable to lots in the community sets forth the composition, purpose, and powers of the Association and states that approval for membership in the Association is required before a purchaser may acquire title to a lot. A Board of Directors elected by the members manages the affairs of the Association. The Association is the assignee of the subdivider which recorded the Declaration of Restrictions, and the parties agree that the restrictive covenants set forth in the Declaration are valid and enforceable.

On December 9, 1978, the Board, after conducting hearings, adopted a new program for the community entitled "Annual Guest Privilege Program." Under this program, available only to residents of the counties of Orange, Culpeper, Spotsylvania, Stafford, and Fauquier, and the cities and towns within their geographical boundaries, a committee of the Association reviews and approves applications for guest privileges submitted by persons who own no property in the subdivision. An applicant approved for the program acquires the right, upon payment of a fee, to use specified facilities of the community for twelve months. Participants in the program may apply for annual membership in one or more of the golf, swimming, or tennis activities. They may also bring a limited number of guests with them to use the facilities. The Board limited the program to 250 applicants, construed a participant's right to use the facilities as a revocable license, and provided that failure to abide by the rules and regulations of the Association would result in revocation of guest privileges. The Board published newspaper advertisements offering the program to the public in the specified area.

Richard A. Bauer and three other Lake of the Woods property owners, ¹ filed a bill for declaratory judgment in the trial court against the members of the Board ² seeking to have the guest program invalidated. The complainants maintained that the Board had no authority under the restrictive covenants and the Articles of Incorporation of the Association to sell to nonproperty owners the right of entry and access to community facilities.

The parties filed a pretrial written stipulation ³ that the only issue in the case was whether the Board had authority to establish the guest program, and that resolution of the issue turned upon the meaning of the word "invitees" as used in Section 11 ⁴ of the restrictive covenants. Without specifically addressing this issue, the trial court ruled that the Board had authority under Section 11 to establish and maintain the program. By final order entered May 29, 1979, the court dismissed the complainants' bill of complaint.

The parties agree that the relationship between the Association and its members is contractual in nature. The Board members argue that the Association's Articles of Incorporation ⁵ conferred upon them the authority to establish the guest program. We reject this argument. The Association may exercise the broad powers conferred upon it by its Articles of Incorporation subject, however, to the contractual obligations embodied in the restrictive covenants. In the Articles of Incorporation, the first of the general objects and purposes set forth in Article II is to promote the community welfare and the interests of the property owners and "to exercise the powers granted to it in, or pursuant to," the restrictive covenants. Moreover, Article XI provides that the Articles of Incorporation may not be altered or amended to conflict with the restrictive covenants. Therefore, the contractual relationship established between the Association and its members may not be impaired by the exercise of corporate powers in derogation of the covenants.

Absent a challenge to the authority of an attorney to make them, stipulations are definitive of issues. McLaughlin v. Gholson, 210 Va. 498, 500, 171 S.E.2d 816, 818 (1970). See also Henderson & Russell v. Warwick, 217 Va. 486, 488, 229 S.E.2d 878, 880 (1976). In the present case, the parties by stipulation carefully and clearly framed not only the dispositive issue but also the means by which the issue was to be resolved. Accordingly, we will follow the terms of the stipulation by construing the word "invitees" as used in Section 11 of the restrictive covenants.

The term "invitee" in tort law describes the status of a person entering land in respect to the duties owed him by the owner or occupier of the land. A person is an invitee when the landowner or occupier has extended an express or implied invitation to the visitor and the visitor enters pursuant to the invitation. City of Richmond v. Grizzard, 205 Va. 298, 302, 136 S.E.2d 827, 830 (1964). See Colonial Natural Gas Company v. Sayers, 222 Va. 781, ---, 284 S.E.2d 599, 601 (1981); Note, Invitee Status in Virginia, 44 Va.L.Rev. 804 (1958). However, a social guest is not an invitee, but a bare licensee to whom the possessor of land owes a lesser standard of care. See Bradshaw v. Minter, 206 Va. 450, 452, 143 S.E.2d 827, 828-29 (1965). Having stipulated that "invitees" and "guests" are entitled to enter the subdivision, the parties have thereby tacitly acknowledged that, at least for certain purposes, these terms denote separate categories of visitors.

To determine the purpose of restrictive covenants we construe them in the light of the circumstances under which they were written. Traylor v. Holloway, 206 Va. 257, 259-60, 142 S.E.2d 521, 523 (1965). See also Village Gate v. Hales, 219 Va. 321, 325, 246 S.E.2d 903, 905 (1978); Bruton v. Wolter, 216 Va. 311, 313-14, 218 S.E.2d 438, 440-41 (1975); Bank v. Standard Cary, 208 Va. 298, 304, 156 S.E.2d 778, 784 (1967); Elterich v. Leicht Real Estate Co., 130 Va. 224, 238-40, 107 S.E. 735, 739-40 (1921).

Section 11 of the restrictions emphasizes the private character of the community. In 11A it is provided that all the streets, parks, recreational facilities, and other amenities are private property, but easements for the use of the streets and park areas are reserved as specified. Ownership of the recreational facilities has been conveyed to the Association pursuant to the provisions of 11B, and these facilities are to be used on such terms and conditions as the Association shall "license." Thus, the Association may impose fees upon those who use the facilities.

None of the restrictions employs the term "guests" to describe a class of persons authorized to use Association property. In view of the underlying purpose of the community, however, as shown by the restrictive covenants, it is apparent that the term "invitees" was not intended to mean only those persons who enter the subdivision upon express or implied invitation for business purposes. The common meaning of "invitee" is "an invited person; guest." Webster's Third New International Dictionary, 1190 (1969). Accordingly, we construe "invitees" as used in 11A to include social guests of the Association and of its members.

We will assume that the term "invitees" in Section 11A also includes business visitors such as tradesmen, repairmen, or service personnel, entering the community upon express or implied invitation, although there is nothing in Section 11 except the word itself to suggest that it was used in the context of business invitees. But the Board may not convert a restriction that merely grants easements to use streets and park areas into authority to enlarge the class of persons entitled to use other community facilities.

The Board members contend that the provision in 11A for members and owners of The Lake of the Woods Golf and Country Club, Inc., to have an easement over the streets shows an intent that non-residents be permitted to use the facilities. We think it is more logical to conclude that this was merely one specific exception written into the restriction. The exception is inapplicable because the parties stipulated that The Lake of the Woods Golf and Country Club, Inc., no longer exists.

The remaining aspect of the...