Dogwood Valley Citizens Ass'n v. Shifflett

• Decision Date: 11 January 2008
• Docket Number: Record No. 070143.
• Citation: 654 S.E.2d 894,275 Va. 197
• Parties: DOGWOOD VALLEY CITIZENS ASSOCIATION, INC. v. Raymond James SHIFFLETT, Jr., et al.
• Court: Virginia Supreme Court

654 S.E.2d 894

275 Va. 197

DOGWOOD VALLEY CITIZENS ASSOCIATION, INC. v. Raymond James SHIFFLETT, Jr., et al.

Record No. 070143.

Supreme Court of Virginia.

January 11, 2008.

George H. Dygert (Dygert, Wright, Hobbs & Heilberg, on brief), Charlottesville, for appellant.

Frank K. Friedman (Richard C. Maxwell, Woods Rogers, on brief), Roanoke, for appellees Dana Allen and Wendy Allen.

David C. Dickey, Stanardsville, for appellees Kenneth Colby, Jr., Jerome Hatcher, Sarah Hatcher, Janet Heckethorn, Shirley Moore, Thelma G. Johnson, Joe Mitchell Miller, Margaret Miller and Stephen McKee Miller.

No brief filed by appellees Jamie H. Lanzon, Raymond James Shifflett, Jr., Roy L. Smith, III and Kenneth T. Jacob.

Present: HASSELL, C.J., KOONTZ, KINSER, LEMONS, AGEE, and GOODWYN, JJ., and LACY, S.J.

OPINION BY Senior Justice ELIZABETH B. LACY.

In this appeal, we consider whether the circuit court erred in determining that Dogwood Valley Citizens Association, Inc. (DVCA), a non-stock Virginia corporation, did not qualify as a property owners' association under the Property Owners' Association Act, Code §§ 55-508 through -516.2 (the POAA). Because we conclude that the filing of DVCA's Articles of Incorporation and Bylaws did not constitute a declaration imposing on DVCA operational or maintenance responsibilities for the common areas or roads of the development, we will affirm the judgment of the circuit court.

BACKGROUND

We were first asked to determine whether DVCA was a property owners' association under the POAA in Dogwood Valley Citizens Ass'n, Inc. v. Winkelman, 267 Va. 7, 590 S.E.2d 358 (2004). Qualification as a property owners' association under the POAA requires that a declaration recorded in the land records where the development is located impose on an association both the power to assess fees for road and common facilities maintenance and the duty to perform such maintenance. Anderson v. Lake Arrowhead Civic Association, 253 Va. 264, 271-72, 483 S.E.2d 209, 213 (1997). In Winkelman we held that, although the restrictive covenants contained in deeds of dedication filed in the land records affecting the Dogwood Valley development conferred upon the developers and their assignees the power to assess an annual fee for the upkeep of the roads and common facilities, those covenants did not require DVCA to maintain the roads or common area of the development. 267 Va. at 13-14, 590 S.E.2d at 361. Specifically we said the DVCA "has failed to identify any document, recorded among the lands records ... that expressly requires DVCA to maintain the common areas or the roads." Id. Accordingly, we concluded that because such a power and duty were not contained in a recorded declaration, DVCA was not a property owners' association as defined by the POAA and did not have the authority to enforce special assessments on landowners in the Dogwood Valley development. Id. at 14-15, 590 S.E.2d at 361-62.

Following our decision in Winkelman, DVCA's president filed in the land records an affidavit and a copy of DVCA's Articles of Incorporation and Bylaws. The Bylaws contained a provision stating, "It shall be the duty of the Board of Directors to: ... cause the roads and common facilities to be maintained according to the extent that the funds collected permit." DVCA then levied special assessments against its members under Code § 55-514.¹ When some of the landowners refused to pay these assessments, DVCA filed warrants in debt, claiming that the landowners were indebted to DVCA for the special assessments. The General District Court for Greene County denied DVCA's claims. On appeal, the Greene County Circuit Court held that filing the Articles of Incorporation and ByLaws did not qualify DVCA as a property owners' association under the POAA, and therefore, DVCA did not have the right to levy special assessments, charge interest, charge penalties, collect attorney's or docketing fees, "or any other charge other than the regular assessments set forth in the Deeds of Dedication." DVCA timely appealed to this Court.

DISCUSSION

The POAA defines a property owners' association as "an incorporated or unincorporated entity upon which responsibilities are imposed and to which authority is granted in the declaration." Code § 55-509. "Declaration" is defined in the POAA as

any instrument, however denominated, recorded among the land records of the county or city in which the development or any part thereof is located, that either (i) imposes on the association maintenance or operational responsibilities for the common area or (ii) creates the authority in the association to impose on lots ... any mandatory payment of money in connection with the provision of maintenance and/or services for the benefit of ... the common area.

Code § 55-509.

DVCA argues that the defect which prevented it from qualifying as a property owners' association under the POAA in Winkelman was the failure to have a document on file in the land records that imposed on it the responsibility of maintaining the roads or common areas. This defect was cured, according to DVCA, by filing the Articles of Incorporation and Bylaws in the land records because those documents provided the requisite duty to maintain the roads and common areas of the development. Because those documents met the POAA's definition of "declaration," DVCA contends it now qualifies as a property owners' association under the POAA.²

We reject DVCA's argument that the plain language of the definition of "declaration" includes instruments such as articles of incorporation and bylaws if such documents are filed in the appropriate land records and create either certain assessment authority or maintenance duties for the property owners' association. Such a literal application of the phrase "any instrument" in the definition of "declaration" is inconsistent with the concept of "declaration" used in other provisions of the POAA.

The POAA applies to "developments subject to a declaration." Code § 55-508(A). A "[d]evelopment" is defined by the POAA as

real property ... subject to a declaration which contains both lots ... and common areas with respect to which any person, by virtue of ownership of a lot ... is obligated to pay assessments provided for in a declaration.

Code § 55-509. These two definitions along with the definition of "declaration" reflect the intent of the General Assembly to apply the POAA to real property subject to certain benefits and burdens that are part of the bundle of property rights conveyed with the transfer of ownership of the property. Such benefits and burdens are generally described as restrictive covenants that run with the land. See Sonoma Development, Inc. v. Miller, 258...