Westgate v. Philip Richardson Co., Inc., 050388.

• Decision Date: 04 November 2005
• Docket Number: No. 050388.,050388.
• Citation: 621 S.E.2d 114
• Parties: WESTGATE AT WILLIAMSBURG CONDOMINIUM ASSOCIATION, INC., et al. v. PHILIP RICHARDSON CO., INC., et al.
• Court: Virginia Supreme Court

Page 114

621 S.E.2d 114

WESTGATE AT WILLIAMSBURG CONDOMINIUM ASSOCIATION, INC., et al. v. PHILIP RICHARDSON CO., INC., et al.

No. 050388.

Supreme Court of Virginia.

November 4, 2005.

Andrew G. Elmore (Jerry M. Wright, Jr., Portsmouth; Chadwick, Washington, Moriarty, Elmore & Bunn, on briefs), for appellants.

S.M. Franck; Frank A. Edgar, Jr., Newport News (W. Hunter Old; Geddy, Harris, Franck & Hickman; Kaufman & Canoles, on briefs), for appellees.

Present: All the Justices.

AGEE, Justice.

Westgate at Williamsburg Condominium Association, Inc. ("the Association") appeals from the judgment of the Circuit Court of the City of Williamsburg and James City County which held that the inclusion of a parcel of real estate within a property description submitted pursuant to a recorded Declaration of Condominium ("the Condominium Declaration") was a scrivener's error subject to unilateral amendment by the condominium declarant under Code § 55-79.71(F). For the reasons set forth below, we will reverse the judgment of the trial court.

I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW

On August 19, 1997, Kotarides Builders/Developers, Inc. ("Kotarides, Inc.") entered into a contract to purchase an 11.913 acre parcel ("the property") from Philip Richardson Co., Inc. ("Richardson") in the City of Williamsburg ("the City"). The property was not subdivided, but consisted of two contiguous tracts with different zoning classifications. A nearly 11-acre tract was zoned residential ("residential parcel"), and a .978 acre tract ("Parcel 1A") was zoned commercial. Kotarides, Inc. intended to develop a residential condominium development, Westgate at Williamsburg ("Westgate"), on the residential parcel.

The evidence at trial established that Richardson intended to keep Parcel 1A to facilitate a hotel it owned on adjoining property. However, neither Richardson nor Kotarides, Inc. wanted to delay the closing while a subdivision application was submitted and processed by the City to formally subdivide the property into the residential parcel and Parcel 1A. Therefore, Richardson intentionally conveyed the entire property to 752, LLC ("the LLC"),¹ the assignee of Kotarides, Inc., which was fully cognizant that the property acquired consisted of both the residential parcel and Parcel 1A.

Pete Alex Kotarides, project manager for the development, testified that Kotarides, Inc. and Richardson had always agreed that Parcel 1A "needed to end up back with . . . Richardson." To that end, the parties agreed that Kotarides, Inc. would lease that parcel back to Richardson, and the purchase agreement gave Richardson a six-year option to reacquire Parcel 1A.²

Prior to closing, Kotarides, Inc. hired AES Consulting Engineers ("AES") to prepare site plans for the development of Westgate. The site plans described Parcel 1A as the "Lease Parcel," and showed no part of the condominium project actually being built on Parcel 1A. After closing in March 1998, the LLC directed AES to prepare a metes and bounds property description and plat of the condominium property for purposes of the Condominium Declaration. Although the site plans described Parcel 1A as a "Lease Parcel," AES included the entire property the LLC acquired from Richardson, Parcel 1A and the residential parcel, in both the metes and bounds description and the plat of the condominium property.

George T. Wilson, Jr., a land surveyor for AES, testified that the LLC never instructed AES to include or exclude Parcel 1A as part of the metes and bounds description or the plat. He testified that the LLC asked AES to prepare a property description and plat for the property owned by the LLC. AES sent the draft documents to Mr. Kotarides and Elizabeth L. White, the LLC's attorney, for review.

Mr. Kotarides testified that he reviewed the plat and concluded "that the lease parcel was not included." He did not review the metes and bounds description. Ms. White reviewed both drafts and suggested a number of changes, none of which questioned the accuracy of including Parcel 1A in the plat or metes and bounds description. Mr. Kotarides admitted that he "didn't look at [the drafts] carefully enough."³

By Declaration of Condominium under Code § 55-79.54, dated May 28, 1999, and recorded June 3, 1999, the LLC created "a condominium regime by submitting the real estate in Exhibit A-1" attached to the Declaration to the applicable provisions of the Condominium Act, Code § 55-79.39, et seq. Exhibit A-1 was the metes and bounds description of the property which included both the residential parcel and Parcel 1A. Exhibit A-2, a plat of survey prepared by AES, was also attached to the Declaration which identified Exhibit A-2 as "showing the location and dimensions of the real estate comprising the Condominium. . . ."

The LLC also established the Association, and its members controlled the Association's Board of Directors. On June 14, 1999, the LLC sold the first unit of Westgate.

In January 2001, Richardson notified the LLC of its intent to repurchase Parcel 1A. Mr. Kotarides then learned that Parcel 1A had been included in the Westgate condominium property when he began to draw up the documents to complete the transfer of that parcel to Richardson. To facilitate the transfer to Richardson, the LLC recorded a Correction Amendment to the Condominium Declaration on March 16, 2001, which stated that "the legal description and the plat for Phase One erroneously included .978 acres of land that was never intended to be subjected to the Condominium." The Correction Amendment recited that "§ 55-79.71(F) of the Act allows the Declarant to unilaterally correct any scrivener's error in the condominium instrument" as the basis for the LLC's action. On May 1, 2002, the LLC conveyed Parcel 1A to Richardson and executed a reciprocal deed of easement and maintenance agreement between the LLC, the Association, and Richardson.⁴ That afternoon, the LLC transferred control of the Association to the unit owners.

On November 20, 2002, the Association, representing the unit owners, filed a bill of complaint to quiet title against the LLC and Richardson, alleging the attempt to remove Parcel 1A from the condominium property by unilateral action in the Correction Amendment was unlawful. The Association asked the trial court to declare the Correction Amendment, the deed transferring Parcel 1A to Richardson, and the reciprocal deed of easement and maintenance agreement "null, void, and of no effect." The Association also requested attorneys' fees under Code § 55-79.53(A).⁵ By final decree dated November 22, 2004, incorporating a letter opinion of August 11, 2004, the trial court entered judgment for the LLC and Richardson and awarded the LLC attorneys' fees of $51,264.71. In so doing the trial court agreed with the LLC and Richardson that a scrivener's error had occurred. The trial court made these findings in its letter opinion:

The Court finds that Richardson sold a parcel of land to Kotarides, which consisted of 11.913 acres. The parcel contained two zoning designations, a .978 acre parcel was zoned B-2 and the balance zoned RM-2. That Richardson did not intend to convey the .978 acre parcel to Kotarides, but rather intended to use the .978 acre parcel for a parking lot for his planned expansion of his hotel, which is adjacent to the .978 acre parcel. Richardson did convey the entire parcel to Kotarides to expedite Kotarides' plan to develop condominiums on the property zoned RM-2. That Kotarides granted Richardson an option to purchase the .978-acre parcel back for a nominal amount. That Kotarides (now 752 LLC) had land development plans created for the condominium project, which included a description of the entire parcel purchased from Richardson, including the .978-acre parcel zoned B-2. That 752 LLC subjected the entire parcel to the condominium declaration. That the plat which describes the parcel to be subjected to the condominium project is detailed and difficult to follow. That 752 LLC did not intend to subject the .978-acre parcel to the condominium regime. The Court finds based upon the facts set forth that the .978 acre parcel was included in the condominium declaration by error.

The Court further finds that error of including the .978-acre parcel in the condominium description was contrary to the intent of 752 LLC. The error was not in the creation of the plat by the surveyor, but rather its[] use in the description of the property to be subjected to the condominium declaration. The error was in making the [Declaration] contrary to the intent of 752 LLC.

The Association makes four assignments of error to the judgment of the trial court. The Association contends the trial court erred in (1) finding that the inclusion of Parcel 1A in the Condominium Declaration property description and plat was a scrivener's error, (2) disregarding the property ownership interest of the unit owners, (3) treating the Condominium Declaration as a deed and concluding that the association and unit owners were one and the same, and (4) awarding attorneys' fees to the LLC.

We agree with the Association that the trial court erred in holding that the inclusion of Parcel 1A in the Condominium Declaration property description was a scrivener's error under Code § 55-79.71(F).

II. ANALYSIS

A. The Standard of Review

The LLC and Richardson assert that our standard of review in this case is that of "plain error." "When the chancellor hears evidence ore tenus, his decree is entitled to the same weight as a jury verdict, and [the Court is] bound by the chancellor's findings of fact unless they are plainly wrong or without evidence to support them." Hoffman Family, L.L.C. v. Mill Two Associates P'ship, 259 Va. 685, 696, 529 S.E.2d 318, 325 (2000). They contend that whether a scrivener's error occurred is solely a question of fact, citing Marsteller v. Warden, 115 Va. 353, 79 S.E. 332 (1913). In their view, the chancellor's findings of fact as...