Zinone v. Lee's Crossing Homeowners Ass'n

• Decision Date: 16 September 2011
• Docket Number: Record No. 101085.
• Citation: 282 Va. 330,714 S.E.2d 922
• Parties: Linzie ZINONEv.LEE'S CROSSING HOMEOWNERS ASSOCIATION, et al.
• Court: Virginia Supreme Court

282 Va. 330

714 S.E.2d 922

Linzie ZINONE

v.LEE'S CROSSING HOMEOWNERS ASSOCIATION, et al.

Record No. 101085.

Supreme Court of Virginia.

Sept. 16, 2011.

Vernon W. Johnson, III (Joseph T. Prendergast; Nixon Peabody; Prendergast & Prendergast, on briefs), for appellant.Michael S. Dingman, Falls Church; William P. Daly, Jr. (Robert M. Diamond; Richard D. Kelley; Reed Smith, Falls Church; Rees Broome, on briefs) for appelleesAmicus Curiae: Home Builders Association of Virginia (Andrew J. Terrell; Whiteford Taylor Preston, on brief), in support of appellees.Present: KINSER, C.J, LEMONS, GOODWYN, and MILLETTE, JJ., and KOONTZ, S.J.Opinion by Justice LAWRENCE L. KOONTZ, JR.

In this appeal, we consider whether certain provisions of the Virginia Property Owners' Association Act (“POAA”), Code §§ 55–508 through –516.2, restrict the declarant of a recorded declaration creating a property owners' association from unilaterally amending that declaration under its express term providing for such authority. The issue, which presents a purely legal question of statutory construction, was decided in the circuit court upon cross motions for partial summary judgment based on the pleadings. Accordingly, we will review the judgment under a de novo standard. Addison v. Jurgelsky, 281 Va. 205, 208, 704 S.E.2d 402, 404 (2011); Conger v. Barrett, 280 Va. 627, 630, 702 S.E.2d 117, 118 (2010).

BACKGROUND

The material facts are not in dispute. Lee's Crossing is a residential subdivision in Loudoun County created in 1999 and is subject to a Declaration of Protective Covenants (“the Declaration”) recorded in the County's land records by the Merritt Family Limited Partnership I, the developer of the subdivision, and Jack H. Merritt, Jr., the general partner (collectively, “Merritt”). The Declaration created Lee's Crossing Homeowners Association (“the Association”) for the Lee's Crossing subdivision subject to the provisions of the POAA. Linzie Zinone owns property within the Lee's Crossing subdivision and, thus, is a member of the Association.

As relevant to this appeal, section 17(i) of the Declaration provided: ¹

Amendments. These Covenants may be modified or amended upon an affirmative vote of two-thirds of the membership of the Association. Declarant reserves the right to unilaterally amend this Declaration anytime within two years of the recordation of this Declaration.Pursuant to this provision of the Declaration, Merritt made numerous unilateral amendments to the Declaration between 1999 and 2004, including several which extended the period of time during which unilateral amendments by the declarant would be permitted.

In an amended complaint filed April 24, 2009 in the Circuit Court of Loudoun County, Zinone sought declaratory and injunctive relief and an award of monetary damages against the Association and Merritt. Zinone alleged that the Association had “perpetrated” the “misuse of power and other ineffective and unlawful activities” by permitting Merritt to exercise authority under the Declaration to unilaterally amend its provisions to the detriment of the individual property owners within Lee's Crossing. Zinone contended that Merritt had made multiple, unilateral amendments to the Declaration that, among other things, impacted architectural controls on the individual property owners and the assessment of regular fees and fines collected by the Association, including fines imposed on Zinone for alleged violations of the Declaration as amended by Merritt.

Zinone did not expressly reference the application of the POAA in her amended complaint. However, in a supplemental bill of particulars, she asserted that the unilateral amendment provision of section 17(i) of the Declaration was in conflict with Code § 55–515.1(D), which she asserted required that any amendment to a declaration be approved by a two-thirds vote of the property owners. Moreover, she maintained that the POAA provided that a unilateral amendment of a declaration by a declarant was allowed only under the limited circumstances provided for in Code § 55–515.2(F), which she maintained did not apply to any of the amendments made by Merritt. Ultimately, it was the application of these two provisions of the POAA which became the focus of the parties and the circuit court in the resolution of the parties' dispute.

Merritt and the Association filed motions for partial summary judgment, asserting identical arguments that Code §§ 55–515.1(D), –515.1(F), and –515.2(F) did not bar a declarant from providing in a declaration the power to unilaterally amend the declaration. Rather, they contended that these provisions of the POAA merely provided ancillary and supplemental rights allowing for amendment of a declaration in the absence of an express, less restrictive manner of amendment within the declaration.²

Zinone also filed a motion for partial summary judgment in which she contended that Code § 55–515.1(D) was a mandatory limitation on the power of a declarant or a property owners' association to amend a declaration except by a two-thirds vote of the membership. Zinone further contended that Dogwood Valley Citizens Association, Inc. v. Shifflett, 275 Va. 197, 203–04, 654 S.E.2d 894, 897 (2008), supported her interpretation of Code § 55–515.1(D), asserting that the case stood for the proposition that the only exception to the two-thirds vote requirement allowing for unilateral amendment of a declaration was under the “limited circumstances” set out in Code § 55–515.2(F).

The circuit court conducted a hearing on the cross-motions for partial summary judgment on March 9, 2010. At the conclusion of the hearing, after receiving argument in accord with the parties' positions as stated in their motions and supporting memoranda, the court entered an order sustaining Merritt's and the Association's motions with respect to their interpretation of Code § 55–515.1(D), and overruling Zinone's motion. Thereafter, Zinone took a nonsuit to the remaining personal claims against Mr. Merritt. This appeal followed.

DISCUSSION

Zinone has made five assignments of error to the judgment of the circuit court. However, the substance of her argument, essentially identical to that made in the circuit court, is that the provision for unilateral amendment of the Declaration contained in section 17(i) is inconsistent with Code §§ 55–515.1(D) and –515.2(F), and that the plain language of the POAA and our decision in Dogwood Valley Citizens Ass'n establish that a declaration can only be amended as provided for in the POAA.

Code § 55–515.1(D) was added to the POAA effective July 1, 1999,³ and provides that:

[a] declaration may be amended by a two-thirds vote of the owners. This subsection may be applied to an association subject to a declaration recorded prior to July 1, 1999, if the declaration is silent on how it may be amended or upon the amendment of that declaration in accordance with its requirements.Code § 55–515.2(F), as effective July 1, 1998,⁴ provides in relevant part:

The declarant may unilaterally execute and record a corrective amendment or supplement to the declaration to correct a mathematical mistake, an inconsistency or a scrivener's error, or clarify an ambiguity in the declaration with respect to an objectively verifiable fact (including without limitation recalculating the liability for assessments or the number of votes in the association appertaining to a lot)....

Zinone notes that the Declaration at issue in this case was recorded just prior to July 1, 1999. She contends that a proper reading of Code § 55–515.1(D) shows that the legislature intended for the two-thirds vote requirement to be applicable to all property owners' associations subject to the POAA as a mandatory constraint on the ability to amend a declaration. According to Zinone, this is so because the 1999 amendment to Code § 55–515.1(D) applies to declarations existing at the time of its adoption that are “silent on how [they] may be amended or upon the amendment of [the] declaration in accordance with [Code § 55–515.1(D)'s] requirements.” Accordingly, she contends that while the first sentence of section 17(i) of the Declaration is in accord with the POAA, the second sentence, providing for an unlimited power of unilateral amendment by the declarant, is not.

Zinone further contends that her interpretation of Code § 55–515.1(D) is supported by Code § 55–515.2(F) and our discussion of its application in Dogwood Valley Citizens Ass'n. She maintains that Code § 55–515.2(F), which predates Code § 55–515.1(D), evinces a legislative intent to limit the ability of a declarant to unilaterally amend a declaration to the circumstances specified in that subsection. Zinone finds support for this contention in our statement in Dogwood Valley Citizens Ass'n that “the POAA allows unilateral action in only limited circumstances.” 275 Va. at 204, 654 S.E.2d at 897.

Merritt and the Association, along with Home Builders Association of Virginia, an amicus curiae appearing in support of their position, contend that Zinone is misreading Code §§ 55–515.1(D) and –515.2(F) as providing mandatory limitations on the power to amend a declaration creating a property owners' association. Rather, they maintain that the circuit court...