Virginia Lawyers Weekly

While mobile homes and the people who live in them often struggle for acceptability, manufactured housing remains a fertile source of work for lawyers in Virginia.

The old image of the run-down “trailer” persists, according to a 2001 Virginia Tech study, although the study notes that the perception is at odds with the reality of most mobile homes today.

Though it may still be striving for social acceptance, mobile homes have achieved a certain legal acceptance, according to John F. Rick, attorney for the Virginia Manufactured and Modular Housing Association. Rick said disputes with localities over state zoning laws passed in the 1990s are largely resolved.

Nevertheless, at least one Virginia community has become a hot spot for legal conflict over a new type of modular home. In Wytheville, two lawsuits are pending over regulation of what are called “on-frame” modular homes.

On-frame modular homes resemble “doublewide” homes, which are mobile homes that are delivered in two sections. The distinction apparently is in the workmanship and details. According to industry information, the on-frame modular home is built to state building code standards, while mobile homes are built to standards set by the federal Department of Housing and Urban Development.

In the first Wytheville case, a group of residents sued a homeowner on their street, saying his family’s two-part modular home was actually a “mobile home or trailer,” which was banned under the community’s restrictive covenants, according to published accounts. The suit asked a judge to banish the home from the neighborhood.

As might be imagined, the suit stirred up local debate. A few months later, the Wytheville town council voted to ban such on-frame modular homes from certain residential districts.

The new ordinance led to a lawsuit from a mobile home dealer, challenging the county’s right to impose such restrictions on modular homes. The dealer asks the court to void the local ordinance and require the town to issue a building permit for the proposed modular home.

The lawsuits could determine whether courts will accept the industry’s effort to characterize the on-frame modular home as something other than a doublewide mobile home.

Both suits are pending in Wythe County Circuit Court. Attorneys for the parties did not return phone calls for comment.

Other recent and notable cases dealing with manufactured and modular homes include the following:

• The mutable nature of a mobile home underlies the February decision of the 4th U.S. Court of Appeals in Ennis v. Green Tree Servicing LLC (VLW 009-2-043). A mobile home begins life as a vehicle and sometimes ends up as real property, as least as far as the tax man is concerned. Under Virginia law, when you consider your mobile home permanently planted, as it were, you can notify the DMV. The DMV will cancel its vehicle title and tell your local tax collector to tax the unit as real property, not personal property.

That metamorphosis had not been made in the case of the Ennis mobile home, probably because it was parked on a rented spot at a Campbell County mobile home park. When the Ennises took Chapter 13 bankruptcy, they sought to cut the lender’s secured claim in half, to represent the actual value of the mobile home. The lender pointed to the “anti-modification clause” in the bankruptcy code that applies for claims secured “only by a security interest in real property that is the debtor’s principal residence.”

Even though the code language expressly allows mobile homes to qualify, the court held that the anti-modification clause did not apply because the Ennises’ home was not real property.

• U.S. District Judge Jackson L. Kiser wrestled with the inherent nature of a modular home in a case last year in which a purchaser sued the seller under the Magnuson-Moss Warranty Act. The MMWA provides a remedy for breach of warranty for a “consumer product.” Modular homes had been held to be “goods” under the Uniform Commercial Code, but Kiser held the plaintiff’s modular home was not a consumer product, since it was governed by state building codes, unlike a mobile home. The homebuyer was left to seek his remedy in the state courts. The case is Stanley v. Yates Mobile Services Corp. (VLW 008-3-039).

• Buying a mobile home involves a lot of paperwork. Often unnoticed by the buyer is a clause that says, if there’s a dispute over the quality of the product, the buyer agrees to have the claim resolved through arbitration rather than in court. Cases abound on the enforceability of the arbitration clause.

In a recent opinion, the 4th Circuit drew the line on a defendant mobile home dealer who waited through two years of litigation until the eve of trial to ask the court to compel arbitration. The case is Forrester v. Penn Lyon Homes Inc. (VLW 009-2-024).

• Another disgruntled homebuyer won a victory when the Fairfax County Circuit Court allowed him to sue the manufacturer of his modular home for false advertising and breach of warranty claims, even though the buyer never signed a contract with the seller.

The plaintiff’s modular home had to be assembled by a local contractor, and the plaintiff apparently dealt only with the contractor. Nevertheless, the court found the manufacturer had provided literature about its home and guided the plaintiff to the contractor. Accordingly, the plaintiff was allowed to go ahead with his claims of false advertising and breach of warranty in Cash v. GWVA Corp. (VLW 007-8-231).

• In a later decision in the same case, the court rejected an effort by the plaintiff to sue the modular home manufacturer under a Virginia statute that protects buyers of “new dwellings.” The court held it would not consider the home as both a “good” under the UCC and a “dwelling” under the Virginia statute in Cash v. GWVA Corp. (VLW 007-8-267).

• A mobile home buyer who thought he had been overcharged found a new tool in the Virginia Code with the Virginia Credit Services Business Act. The act requires certain disclosures as part of the sale and credit process.

Even though the defendant scoffed at the thought that a mobile home dealer could be sued under a law designed for businesses that advertise to loan money, the judge applied the law to award the plaintiff nearly $4,900 in damages plus attorneys fees and costs. The case is Smith v. Orndorff (VLW 002-12-03).

• Sometimes criminal defendants argue about the true nature of a mobile home. One accused burglar claimed he should not have been convicted of breaking into an office when the office in question was a mere mobile home. The Court of Appeals was unimpressed with that analysis, especially since the mobile home had been placed on blocks, hooked up to electricity, and used regularly as an office. The case is Buie v. Commonwealth (VLW 096-7-042).

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