HOFFMAN FAMILY v. Mill Two Associates

• Decision Date: 21 April 2000
• Docket Number: Record No. 981302.
• Citation: 529 S.E.2d 318,259 Va. 685
• Parties: HOFFMAN FAMILY, L.L.C. v. MILL TWO ASSOCIATES PARTNERSHIP, et al.
• Court: Virginia Supreme Court

529 S.E.2d 318

259 Va. 685

HOFFMAN FAMILY, L.L.C. v. MILL TWO ASSOCIATES PARTNERSHIP, et al.

Record No. 981302.

Supreme Court of Virginia.

April 21, 2000.

Ina C. Charvet (Marc E. Bettius; Lawson & Frank, on briefs), Arlington, for appellant.

C. Torrence Armstrong, McLean (David Fiske, Washington, DC; McGuire, Woods, Battle & Boothe, McLean; Shaw, Pittman, Potts & Trowbridge, Washington, DC, on brief), for appellees Old Town Development Company, L.L.C. and Mill Two Associates Partnership.

No brief or argument for appellee Zion Properties of New York, Inc.

Present: CARRICO, C.J., LACY, HASSELL, KEENAN, KOONTZ, and KINSER, JJ., and WHITING, Senior Justice.

KOONTZ, Justice.

In this appeal, we first consider whether a proposed land development had advanced to a point sufficient to permit the chancellor to issue a declaratory judgment construing a restrictive covenant burdening a portion of the land to be developed, and if so, whether the chancellor correctly determined that the proposed development did not violate that restrictive covenant.

BACKGROUND

The central focus of this appeal is a restrictive covenant in a December 11, 1989 deed between Hubert N. Hoffman and Peggy L. Hoffman, husband and wife and predecessors in interest in Hoffman Family, L.L.C.,¹ and Mill Two Associates Partnership (Mill Two) recorded in the land records of the City of Alexandria on December 12, 1989. By that deed, Hoffman conveyed to Mill Two a 3.88-acre tract of land, referenced in the subsequent declaratory judgment suit from which this appeal arises as "Parcel 11," situated at the northwest corner of the intersection of Eisenhower Avenue and Mill Road in the City of Alexandria. The restrictive covenant provides that:

the property set forth above shall be developed for residential purposes only, not to include motels and hotels, but, which may include up to fifteen percent (15%) of commercial space for residential support. This covenant shall run with the land, but, nothing above withstanding, shall lapse and be no further in force and effect on January 1, 2020.

The conveyance of Parcel 11 to Mill Two by the December 11, 1989 deed was made in conjunction with an "Agreement for the Like-Kind Exchange of Property" executed by Hoffman and Mill Two on November 6, 1989. Pursuant to that agreement, Hoffman subsequently received five separate parcels of land in the City of Alexandria totaling 3.3 acres. Like Parcel 11, these parcels were part of the "Eisenhower Avenue Metro valley," an area of the City of Alexandria undergoing intense redevelopment following the opening of a Washington Metropolitan Area Transit Authority Metrorail line. In addition to parcels already owned, these parcels facilitated Hoffman's current and future plans to develop property adjoining the Metrorail line in the City of Alexandria.

Mill Two ultimately sought to develop Parcel 11 in conjunction with Old Town Development Company, L.L.C. (Old Town Development), the owner of two parcels on Mill Road adjoining Parcel 11 along their south and west boundaries. These parcels, referenced in the subsequent declaratory judgment suit from which this appeal arises as Parcel 9 and Parcel 10, total approximately 1.24 acres.²

The purpose of combining the land area of the three parcels into a single development was to obtain the benefits of the designation of property in the Eisenhower Avenue Metro valley area as a "Coordinated Development District" under the City of Alexandria's zoning ordinances. See Alexandria Zoning Ordinance § 5-601, et seq. In testimony during a hearing on the merits of the suit, Kimberly Johnson, chief of the development division of the City of Alexandria Department of Planning and Zoning, explained that Coordinated Development Districts are employed by the City to "encourage higher density development around Metro stations." Essentially, within a Coordinated Development District, the floor area ratio for determining the maximum square footage of permissible development, or "density," for a given parcel of land may be increased by combining its development with that of adjoining parcels. According to Johnson, the parcels of land included in a combined development proposal need not necessarily coincide with the boundaries of lots as reflected in the land or tax records.

By combining the development of Parcels 9 and 10 with that of Parcel 11, the floor area ratio for the combined parcels would be raised from 1.25 to 3.75. Alexandria Zoning Ordinance § 5-602. Moreover, the total density permitted in the development would be based upon the application of the floor area ratio to the combined area of the three parcels, rather than to each parcel individually. In other words, the density of development of one parcel would not be limited based upon its area so long as the total density of development of the three parcels combined did not exceed that allowed under the zoning ordinance.

"Mill Race—Old Town Commons," the development proposed for Parcels 9, 10, and 11, consists of four high rise residential towers, principally located on Parcel 11, and a fifteen story office building located solely on Parcels 9 and 10. A ground level plaza with retail commercial space and parking garages, both below and above ground, connect the five main buildings of the development.

The record shows that efforts were made to coordinate the development of Parcels 9, 10, and 11 with the development of Hoffman's parcels in the Eisenhower Avenue Metro valley. However, because of competing interests, the parties were unable to reach an accord on joint development.

On August 13, 1997, Hoffman filed a bill of complaint seeking a declaratory judgment that the proposed development of Parcels 9, 10, and 11 would violate the restrictive covenant in the December 11, 1989 deed conveying Parcel 11 to Mill Two. Because of changes in ownership of the parcels, see note 2 supra, and the continuing process of obtaining approval from the City of Alexandria for the proposed development, Hoffman filed an amended bill of complaint on October 22, 1997. The gravamen of Hoffman's suit, however, continued to be that the use of the land area of Parcel 11 to increase the density of commercial construction permitted on Parcels 9 and 10 was violative of the restrictive covenant in that this constituted a use of Parcel 11 for other than residential and supporting commercial purposes.

On November 7, 1997, Mill Two filed a demurrer to the amended bill of complaint, asserting that the case was not yet ripe for decision. Mill Two asserted that the plan for development of Parcels 9, 10, and 11 as alleged in the bill of complaint was not sufficiently certain to warrant a declaratory judgment.

On November 14, 1997, Old Town Development filed an answer and cross-bill to the bill of complaint.³ Old Town Development contended that Hoffman had no standing to challenge the proposed development of Parcels 9 and 10. Old Town Development further contended that Hoffman's suit was an improper attempt to bring "a cloud on the title" of Parcel 11 and sought damages on that account.

Hoffman filed a motion for summary judgment on the cross-bill, contending that a lawsuit could not constitute an improper attempt to cloud a title. On December 23, 1997, the chancellor heard argument on the motion for summary judgment, but declined to rule on the matter and, rather, permitted Old Town Development to file an amended cross-bill. Hoffman then moved the court to dismiss the case, asserting that its bill of complaint was premature, and that, but for the filing of the cross-bill, it would have taken a voluntary nonsuit. Old Town Development and Mill Two took the position that the case was ripe for decision in order to resolve the "cloud hanging over us." The chancellor ruled that there was a justiciable controversy and denied Hoffman's motion to dismiss.

On December 30, 1997, Old Town Development filed its amended cross-bill. Included in the relief sought in that pleading was a determination of whether the proposed development of Parcels 9, 10, and 11 would violate the restrictive covenant on Parcel 11.

During the pendency of the proceeding before the chancellor and despite concerns over the failure to coordinate development with Hoffman, on January 24, 1998, the Alexandria City Council approved, subject to certain restrictions, the Coordinated Development District Concept Plan submitted by Old Town Development for Parcels 9, 10, and 11. The approval of the concept plan does not permit the beginning of construction, which requires the further approval of final site plans and the grant of building permits. In addition to approving the concept plan, the City also approved a necessary zoning change and granted a special use permit for traffic management related to the development of phase one of Old Town Commons.

Having previously filed a demurrer to the amended cross-bill, on February 18, 1998, Hoffman filed a motion to dismiss its amended bill of complaint or, in the alternative, to be allowed to take a voluntary nonsuit. Hoffman also filed a motion to dismiss the amended cross-bill. In each of these pleadings Hoffman again asserted that there was not yet a justiciable controversy between it and Old Town Development, either because Old Town Development had not yet acquired an interest in Parcel 11 or because the plan for development of Parcels 9, 10, and 11 was not yet sufficiently certain to permit a declaratory judgment on the effect of the restrictive covenant. Old Town Development filed responsive pleadings, with supporting materials, opposing Hoffman's efforts to prevent the chancellor from rendering a judgment on the merits.⁴

A three-day hearing on these issues commenced on February 27, 1998. The voluminous record of testimony and exhibits that resulted from that hearing need not be summarized here except to the extent that the facts have already been recounted above. It shall be sufficient to state that Hoffman...