Virginia POAA 55.1-1828 Lawsuit Writ Denied

And as one poster states over and over, the courts enforce the covenant, BS

This tell me it could have been filed individually, OR as a class action.

I am sorry Max, I didn't meant to rant. Since our attorney filed it as an individual property owner, on behalf of the aggrieved lot owners, it should have been accepted as being filed properly as an individual property owner. Right? So we could assume that that the justices denied the writ for some other reason?

Assuming this was the reason the case was tossed, why can't you believe it? Dismissal of a lawsuit for failing to follow procedural rules (which are Thee Law along with much else) happens all the time.

Respectfully, I doubt you have all the facts here. Do keep in mind that, if a layperson could parse everything a court did without going to law school, there would be no need for law school.

In the lower court, did the HOA motion for dismissal? If so, and the judge was silent (by all appearances), then the reason for the dismissal is most likely contained in the motion.

Can you get a copy of the letter" the appeals court mailed your group's attorney and provide it here, or at least quote the main reasons given?

Maybe I will search the case law for discussion of 55.1-1828.

I love to argue the law but when a state supreme court rules, that IS the law, unless a federal court overrules them. I'm not saying your attorney did anything wrong based on the knowledge he or she had before the ruling but it is moot now.

Based on the limited information we have, it sounds like the court felt that the case was improperly filed which means they could not consider any material facts. I would think that the attorney has the full decision and knows exactly what was done wrong (at least in the court's opinion).

I recall the Association's attorney stating the case should be dismissed, for other reasons, not because the case was filed improperly.

I am not ready to bet on this. I have not studied this extensively, but so far, I think the problem may be that Virginia court rules (part of the law) apparently lack requirements for meeting class action status. On the other hand, an attorney who passed the bar in Virginia would surely know what he/she was doing when it comes to such a matter. You certainly may be right, and something else caused the suit to be dismissed without a hearing on the merits.

I also wondered whether any mention of "class action" in Virginia statutes meant that one could file as a class in federal court (assuming the lawsuit meets the criteria for adjudication in the federal courts)?

I look forward to further information you care to share.

The media in Virginia has provided some coverage of this case. To respect BernieJ's privacy, I am going to be somewhat circumspect.

The developer of this HOA still holds at least one seat on this HOA's board. Other signs indicate the developer is still selling lots/homes in this HOA. The developer may still be in control. When BernieJ's "group" took the HOA on, the signs are that BernieJ's group was taking on a well-fortified developer. The assessment to which BernieJ's group objects involves supporting what appears to be a non-HOA non-amentity but one that does help property values. I can see why BernieJ's group is roiled. But from what I can tell, and as is common, the OP has presented a one-sided view of things.

The lawsuit appears to have alleged as its main claims that the Board lied about the issues on a ballot when the Board held an owners' vote for a special assessment some months before, and that the Board breached its fiduciary duties as these duties pertained to the vote and related matters. (I am reading between the lines and trying to protect BernieJ's privacy. Do not bank on my report as the full truth.) The media reports that, in early 2021, the HOA motioned to dismiss the main claim (of an improper assessment) on grounds that another owners' vote had occurred within the last month or so; this vote was proper; and this new vote apparently (from what I can tell) properly approved the special assessment. The HOA's (developer's?) attorney said the main issues were moot. The circuit court judge agreed. Per the Circuit Court log, the judge granted the HOA's "demurrer."

Demurrer = defense asserting that even if all the factual allegations in a complaint are true, the facts would be insufficient to establish a valid cause of action.

The circuit court judge went on to rule that BernieJ's group had a few weeks to file an amended complaint that did not include the above issues (lying and breach of fiduciary duties). Or BernieJ's group could appeal the circuit court judge's dismissal of the main issues. BernieJ's group apparently chose to appeal the dismissal of the claims of lying and breach of fiduciary duties. For some reason this appears to have gone straight to the Virginia Supreme Court and not the Virginia appeals courts. Per court records, the Virginia Supreme Court "refused" the petition in late October.

The signs are that the lawsuit was filed by owner ___ ____, "individually and on behalf of all owners of the HOA." In my layperson's experience, and with apologies to BernieJ, and knowing BernieJ's attorney would like me shot, I think filing thusly is just weird. One person cannot just claim to represent "all owners." Especially when it appears a vote went down within the last year indicating many owners disagree with the plaintiff owner here. As a matter of law, it appears to me there is one plaintiff; not several plaintiffs; and not a "class." Never mind the question of whether Virginia state courts hear class actions. It is not cool to claim one represents all owners when one clearly does not. I really want to hear the plaintiff's attorney's explanation of why he filed as he did. Surely I am missing something. Else claiming one plaintiff represents all owners sounds pretty damn much like a serious lie to the court to me.

Could this be why, according to the OP, the Virginia Supreme Court appeared to have a bug up its arse at the hearing this past October on this point? Maybe.

I wonder whether a derivative suit might have been appropriate. BernieJ, "derivative suit" is a complicated topic for laypeople just hearing the phrase for the first time. In many states, including Virginia, it is a suit where the plaintiff claims to bring a suit on behalf of the corporation, because the corporation's board is hurting the corporation, and the corporation has no one else to help it. Certain requirements must be met. It seems clear that no such attempt was made in this initial foray into the court system on this matter.

I checked out the law firm representing the plaintiff (not plaintiffs). It seems reputable but I would not call it a specialist in HOA law at all. Nor is the attorney a specialist in HOA law at all. Or even real estate law, for that matter. The attorney is a graduate of a leading law school.

Super majority is an understatement here.
The entire plan to add the "privately owned business" to the services that the association is responsible for was crafted by investors of the business, and Board members who are members and investors of the business. The developer held a whopping 104 proxy's to pass the measure. There are 325 lot owners who held proxy's, but only 170 in total voted. 87 voted it down, 83 voted in favor, then add on the 104 developer held proxy's in favor.
There were numerous blunders with the way the matter was forced upon the membership, including, the developer didn't have the right to appoint the Board members who voted to impose the assessment. He forgot that for 2 1/2 years he had over sold his inventory which dropped him below the number of lots required for him to be able to appoint Board members. When they were threatened with a lawsuit, the community manager was replaced, then the Board quickly tried to fix all these blunders by calling an emergency meeting to vote in the appointed Board. To make everything legal, they had to call another special meeting, rewrite the ballot correctly so that it could be recorded legally, give proper notice then run to the courthouse and record it before we went to court when the judge dismissed it. Essentially, most of what we were suing them over in an effort to have the declaration removed from the covenants was corrected prior to court. Except for the fact that the declaration itself violates the POAA, 55.1-1825. That is why we sought an appeal.
55.1-1825 permits the assessments to be imposed by the Board if they are "provided as a service the association is responsible as permitted in the covenants", "as long as the funds are used primarily for assets owned by the association or in the best interest of the association". The code does not permit association money to be used to finance or fund a private business or amenities not owned by them, so the Board decided to circumvent the code by adding the business to the covenants. By adding the business to the covenants, the association will be burdened forever to support the business via assessments at the will of the Board.
This kind of thing can happen to anybody who lives in an HOA community that has a business established inside the development plan or near by. What is the purpose of having a Property Owners Association Act if the courts won't uphold it?
Should we have hired a contract lawyer who is well versed in corporate law?

Correction: as a supermajority of voters apparently did.

Bernie

You got your ass legally kicked. Time to stop lamenting about it and get better legal advice.

1 - Media articles about this exact dispute are online, but may take some perseverance to find.

2 - whether CORPORATE-type "OPPRESSION" ? An attorney with contract litigation experience might - might ? - have been able to try to get somewhere with an Oppression remedy.

I happen o live in a jurisdiction which imbedded such a remedy in its condominium statute two decades ago. It took a number of judicial outings before becoming of any use at all to minority stakeholders, a limited remedy. It was arguably too handy to strip mis-behavers of their unit ownership.

3 - If the OP provides more detail without identifying her community, maybe some of the Virginia commenters here can suggest attempts to get fair play out of Virginia Boards under whatever influence of Declarants.

The OP should consider quoting verbatim the full wording of the Supreme Court. I am surprised it arrived by "letter" ( ? ).

I read a couple of the articles and think I have a small idea of what happened.

You have a golf course that was a separate entity from the homes and the homeowners association and their was no requirement to become a member of the course. It was supposed to be self-sufficient. Two things happened, golf in the country is declining, and a world-wide pandemic hit. The developer to date has not turned over control of the community to the owners and probably control the board and a majority of the votes, through proxies. The board member in question either owns the golf course or is a partner in the venture. Because of the two factors above, they have come onto hard times, so is using his control over the association to force owners to subsidize the golf course. He has a 2 or 3 to one advantage in the votes in the community.

Close?

The questioner's posting count - she has now resigned from the Forum - makes it look moot that what she refused or ignored answering, will become available. That's for trying to directly answer her specific question.

1 - Maybe she can hire & listen to a class action or multi-plaintiff civil litigator.

Or maybe she can see how far she can get appealing to the VA state bar with a complaint about her attorney's performance . . whatever

2 - Several positive suggestions were presented above as to the actionable merits about a proxy-dominated Board decision etc to do what she appears to consider "inserting a Declaration into covenants". ( ? )

Whatever that means, 2 levels of courts next summarily refused to proceed about proxy-dominated decisions to transform ( "voluntary" ? ) recreation into some sorta imbedded contractual burden. One thinks oppression if its available.

Or whatever the judicial rationale from the decisions uncovered by Augustin above. It's the judicial rationales that can have legs. Wonder if the OP will bother listening ?

The loss of anonymity may have played a role in the OP's resignation.