Robinson-Huntley v. G.W. Carver Mut. Homes Ass'n ( 2014 )

PRESENT: All the Justices
CAROL ROBINSON-HUNTLEY
OPINION BY
v. Record No. 131065 JUSTICE WILLIAM C. MIMS
April 17, 2014
GEORGE WASHINGTON CARVER MUTUAL
HOMES ASSOCIATION, INC.
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY
Louise M. DiMatteo, Judge
In this appeal, we consider whether a contract obligated a
real estate cooperative to make plumbing repairs and whether
the circuit court abused its discretion by declining to award
attorneys’ fees under Code § 55-492(A).
I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW
In 1998, Carol Robinson-Huntley inherited an interest in
the George Washington Carver Mutual Homes Association, Inc.
(“the Association”), a real estate cooperative created in 1949.
She became a member of the cooperative and executed a mutual
ownership contract (“the Contract”) with the Association.
Under the Contract, Robinson-Huntley acquired a possessory
interest in a unit identified as 1352 South Rolfe Street in
Arlington, Virginia. A paragraph of the Contract (“the Provide
and Pay Provision”) required that “[t]he Association shall . .
. provide and pay for property including the [m]ember’s
dwelling, except that the [m]ember shall make minor interior
repairs and provide all interior and decorating.” (Emphasis in
original.)
In 2011, Robinson-Huntley began experiencing significant
problems with the plumbing in her unit, temporarily rendering
the sinks and toilets inoperable. A plumber determined that
the problem was caused by deterioration in the pipes under the
floors and within the walls of her unit. The pipes needed to
be replaced at a cost of $6000. Robinson-Huntley informed the
Association, which replied through counsel that all the units
had plumbing issues; it said that it did not have the funds to
resolve them all.
Robinson-Huntley filed a complaint alleging, among other
things, that the Provide and Pay Provision obligated the
Association to replace the pipes. While the complaint was
pending, the Association adopted an amendment (“the Conflict
Provision”) to its bylaws providing that they would control in
the event of any conflict between them and a member’s mutual
ownership contract. It also adopted an amendment (“the Repair
Provision”) providing that
units and other services and necessities
shall be made available to the member . . .
at their expense. The monthly fees . . .
as determined by the Board of Directors[]
shall be sufficient to enable the
[Association] to meet as best as it can
under the circumstances[] its taxes, pay
fixed and operating expenses, and build up
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necessary reserves including a general
reserve for contingencies and special
reserves to take care of repairs,
maintenance, replacements, and vacancies,
taking into consideration the long term
plans of the [Association] and the current
condition of the [u]nits.
Robinson-Huntley thereafter filed a second amended
complaint in which she again alleged that the Provide and Pay
Provision obligated the Association to replace the pipes. She
also alleged that the Association withheld financial records
from her and failed to conduct an audit required by the bylaws.
She sought declaratory judgments that (1) she was entitled to
the Association’s financial records under Code § 55-474, (2)
the Association was obligated under the Agreement to repair
common areas, which included replacing the pipes, and (3) the
Conflict Provision was invalid. She also sought injunctions to
compel the Association to (1) perform an audit, (2) appoint a
finance committee and prepare a budget, and (3) replace the
pipes. She also sought an award of attorneys’ fees under Code
§ 55-492(A).
The Association filed a demurrer, which the circuit court
sustained as to Robinson-Huntley’s claim for an injunction
compelling the Association to perform an audit. Following a
bench trial on the remaining claims, the court awarded
Robinson-Huntley (1) an injunction requiring the Association to
appoint a finance committee and prepare a budget and (2) a
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declaratory judgment that the Conflict Provision was invalid.
The court entered judgment for the Association on all remaining
claims. It also declined to award attorneys’ fees to either
party.
We awarded Robinson-Huntley this appeal.
II. ANALYSIS
A. CONSTRUING THE CONTRACT
In her first assignment of error, Robinson-Huntley asserts
that the circuit court erred by concluding that the Provide and
Pay Provision did not obligate the Association to replace the
pipes. She first argues that the Contract is unambiguous and
clearly requires the Association to make the repair. She also
argues in the alternative that, if the Contract is ambiguous,
the ambiguity must be resolved against the Association, which
drafted it.
These arguments present questions of both law and fact.
“The question whether the language of a contract is ambiguous
is a question of law which we review de novo.” Eure v. Norfolk
Shipbuilding & Drydock Corp., 263 Va. 624, 631, 561 S.E.2d 663,
667 (2002). “Contract language is ambiguous when it may be
understood in more than one way or when it refers to two or
more things at the same time. However, a contract is not
ambiguous merely because the parties disagree as to the meaning
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of the terms used.” Id. at 632, 561 S.E.2d at 668 (internal
citation, alteration, and quotation marks omitted).
“When an agreement is plain and unambiguous on its face,
the Court will not look for meaning beyond the instrument
itself. However, when a contract is ambiguous, the Court will
look to parol evidence in order to determine the intent of the
parties.” Id. at 632, 561 S.E.2d at 667-68 (citation omitted).
The plaintiff then bears the burden of proving that the parties
intended the meaning that results in a breach of contract by
the defendant. Id. at 631, 561 S.E.2d at 667. Whether the
plaintiff has met that burden is a question of fact, and “we
will only reverse the finding of the trial court if it is
plainly wrong or without evidence to support it.” Id.
The obligation to “provide and pay for property including
the [m]ember’s dwelling” may be understood in more than one
way. It may mean, as Robinson-Huntley argues, that the
Association is required to replace the pipes because the
proviso immediately following that language--“except that the
[m]ember shall make minor interior repairs and provide all
interior and decorating”--implies that other repairs are the
responsibility of the Association. However, “provide and pay
for” may also mean nothing more than that the Association must
acquire title to property at its own expense, and thereafter
make it available to its members for their use as dwellings.
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While the Association’s bylaws and articles of
incorporation are incorporated into the Contract, neither they
nor any other provision of the Contract sheds any light on this
question. Accordingly, we conclude that the Contract is
ambiguous. The ambiguity may be resolved by ascertaining the
intent of the parties reflected in the extrinsic evidence
adduced at trial. Eure, 263 Va. at 632, 561 S.E.2d at 667-68.
The evidence discloses that Robinson-Huntley’s
predecessor-in-interest also signed a mutual ownership
contract, which included language similar to the Provide and
Pay Provision. However, the two contracts differ in one
significant respect: the corresponding provision in the older
contract provides that “[t]he Association shall . . . provide
and pay for all necessary current repairs, maintenance, and
replacements of Project property including the [m]ember’s
dwelling, except that the [m]ember shall make minor interior
repairs and provide all interior painting and decorating.”
(First and third emphases added.)
The circuit court found this difference compelling. The
older contract included an explicit requirement to repair,
maintain, and replace but the Association subsequently removed
it from the Provide and Pay Provision. The omission of a term
from a written contract evidences intent to exclude it.
Bentley Funding Group, L.L.C. v. SK&R Group, L.L.C., 269 Va.
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315, 330, 609 S.E.2d 49, 56 (2005). Accordingly, the evidence
that the Association removed the obligation from the Provide
and Pay Provision supports the circuit court’s conclusion that
the Association intended to be relieved from that obligation
under the Contract.
Further, the acts of the parties in relation to a contract
establish a practical construction of it. Roanoke Ry. & Elec.
Co. v. Virginian Ry. Co., 159 Va. 289, 293, 165 S.E. 398, 399,
(1932). “The practical construction of a contract by the
parties themselves is entitled to great weight in determining
its proper interpretation.” Coal Operators Cas. Co. v. C. L.
Smith & Son Coal Co., 192 Va. 619, 626, 66 S.E.2d 521, 525
(1951).
The evidence establishes that the Association repaired the
units’ roofs and canopies in 2010, consistent with a practice
of making repairs when a common problem affected several units
and the funds were available to make the repairs for everyone
who needed them. By contrast, Robinson-Huntley was unable at
trial to identify an example of the Association ever
undertaking repairs similar to those she sought.
Taken together, this evidence of the change in the Provide
and Pay Provision and the practical construction of the
Contract by the parties supports the circuit court’s finding
that Robinson-Huntley failed to prove that they intended the
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Association to make the repairs she sought. Therefore, the
court’s finding is not plainly wrong or without evidence to
support it and it will be affirmed. Eure, 263 Va. 631, 561
S.E.2d at 667. *
B. ATTORNEYS’ FEES
In her final assignment of error, Robinson-Huntley asserts
that the circuit court erred by declining to award her
attorneys’ fees under Code § 55-492(A). She argues that the
court incorrectly ruled that she was not adversely affected by
the Conflict Provision, under which the bylaws would prevail if
any conflict existed between them and the Contract. If she had
not succeeded in challenging the Conflict Provision, she
continues, the Association would have been empowered to modify
the Contract unilaterally by amending the bylaws to create such
a conflict.
*
We have often applied the rule that Robinson-Huntley
advocates in this case, that an ambiguous contract is to be
construed against the drafter. E.g., Doctors Co. v. Women's
Healthcare Assocs., 285 Va. 566, 573, 740 S.E.2d 523, 526
(2013) (citing cases). While the rule assists courts in
resolving ambiguities where there is no extrinsic evidence of
the parties’ intent or where such evidence is in equipoise,
this is not such a case and we will not apply the rule here.
See Boulware v. Newton, 59 Va. (18 Gratt.) 708, 721 (1868)
(declining to apply the rule where other rules of construction
resolved the question); cf. Charles E. Russell Co. v. Carroll,
194 Va. 699, 701-02, 74 S.E.2d 685, 687 (1953) (stating “this
rule of construction is not favored by the courts”).
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The question of whether a party is adversely affected by a
failure to comply with a real estate cooperative’s bylaws has
nothing to with the question of whether the party may be
awarded attorneys’ fees under Code § 55-492(A). The statute
states that
If a declarant or any other person subject
to this chapter fails to comply with any
provision hereof or any provision of the
declaration of bylaws, any person or class
of persons adversely affected by the
failure to comply has a claim for
appropriate relief. Punitive damages may
be awarded for a willful failure to comply
with this chapter. The court, in an
appropriate case, may award reasonable
attorney's fees.
Code § 55-492(A).
Robinson-Huntley argues that the term “adversely affected”
as used in the statute is intended to require the plaintiff in
any such action to have standing to sue. She analogizes to
Code § 15.2-2314, which permits “[a]ny person aggrieved by any
decision of [a] board of zoning appeals” to file a petition for
certiorari to obtain appellate review of that decision by the
appropriate circuit court.
We need not address this argument because whatever the
term “adversely affected” may mean in Code § 55-492(A), it is
not relevant to an award of attorneys’ fees. The language
providing for an award of attorneys’ fees follows two sentences
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after the term “adversely affected.” The decision whether to
award attorneys’ fees is based not on whether the plaintiff is
“adversely affected” but on whether the case is “appropriate.”
We review that determination for abuse of discretion.
The “three principal ways” by which a court may abuse its
discretion occur “when a relevant factor that should have been
given significant weight is not considered; when an irrelevant
or improper factor is considered and given significant weight;
and when all proper factors, and no improper ones, are
considered, but the court, in weighing those factors, commits a
clear error of judgment.” Landrum v. Chippenham & Johnston-
Willis Hosps., Inc., 282 Va. 346, 352, 717 S.E.2d 134, 137
(2011) (quoting Kern v. TXO Production Corp., 738 F.2d 968, 970
(8th Cir. 1984)).
The circuit court observed that “I don’t believe under
[Code § 55-492(A)] that [Robinson-Huntley] has prevailed in
terms of showing adversity in this instance.” As noted above,
that is not a proper factor for the court’s consideration of
awarding attorneys’ fees under the statute. However, while
Robinson-Huntley asserts the court erred by concluding that
there was no adversity, she does not assign error to the
court’s reliance on this improper factor in reaching its
decision. We therefore will not reverse it.
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III. CONCLUSION
For the foregoing reasons, we will affirm the judgment of
the circuit court.
Affirmed.
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