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HOFFMAN FAMILY, L.L.C. v. MILL TWO ASSOCIATES PARTNERSHIP, et al.



NOTICE: The opinions posted here are
subject to formal revision. If you find a typographical error or
other formal error, please notify the Supreme Court of Virginia.


HOFFMAN FAMILY, L.L.C.

v.

MILL TWO ASSOCIATES
PARTNERSHIP, et al.


April 21, 2000

Record No. 981302

Hoffman Family, L.L.C.

v.

Mill Two Associates partnership, Et al.

FROM THE circuit court of the city of
alexandria

John E. Kloch, Judge

Present: Carrico, C.J., Lacy, Hassell, Keenan,
Koontz, and Kinser, JJ., and Whiting, Senior Justice


OPINION BY JUSTICE LAWRENCE L. KOONTZ, JR.

In this appeal, we first consider whether a
proposed land development had advanced to a point sufficient to
permit the chancellor to issue a declaratory judgment construing
a restrictive covenant burdening a portion of the land to be
developed, and if so, whether the chancellor correctly determined
that the proposed development did not violate that restrictive
covenant.

BACKGROUND

The central focus of this appeal is a
restrictive covenant in a December 11, 1989 deed between Hubert
N. Hoffman and Peggy L. Hoffman, husband and wife and
predecessors in interest in Hoffman Family, L.L.C.,
[1] and Mill Two Associates Partnership (Mill Two) recorded
in the land records of the City of Alexandria on December 12,
1989. By that deed, Hoffman conveyed to Mill Two a 3.88-acre
tract of land, referenced in the subsequent declaratory judgment
suit from which this appeal arises as "Parcel 11,"
situated at the northwest corner of the intersection of
Eisenhower Avenue and Mill Road in the City of Alexandria. The
restrictive covenant provides that:

the property set forth above shall be developed
for residential purposes only, not to include motels and hotels,
but, which may include up to fifteen percent (15%) of commercial
space for residential support. This covenant shall run with the
land, but, nothing above withstanding, shall lapse and be no
further in force and effect on January 1, 2020.

The conveyance of Parcel 11 to Mill Two by the
December 11, 1989 deed was made in conjunction with an
"Agreement for the Like-Kind Exchange of Property"
executed by Hoffman and Mill Two on November 6, 1989. Pursuant to
that agreement, Hoffman subsequently received five separate
parcels of land in the City of Alexandria totaling 3.3 acres.
Like Parcel 11, these parcels were part of the "Eisenhower
Avenue Metro valley," an area of the City of Alexandria
undergoing intense redevelopment following the opening of a
Washington Metropolitan Area Transit Authority Metrorail line. In
addition to parcels already owned, these parcels facilitated
Hoffman’s current and future plans to develop property
adjoining the Metrorail line in the City of Alexandria.

Mill Two ultimately sought to develop Parcel 11
in conjunction with Old Town Development Company, L.L.C. (Old
Town Development), the owner of two parcels on Mill Road
adjoining Parcel 11 along their south and west boundaries. These
parcels, referenced in the subsequent declaratory judgment suit
from which this appeal arises as Parcel 9 and Parcel 10, total
approximately 1.24 acres.
[2]

The purpose of combining the land area of the
three parcels into a single development was to obtain the
benefits of the designation of property in the Eisenhower Avenue
Metro valley area as a "Coordinated Development
District" under the City of Alexandria’s zoning
ordinances. See Alexandria Zoning Ordinance ? 5-601,
et seq. In testimony during a hearing on the merits of the
suit, Kimberly Johnson, chief of the development division of the
City of Alexandria Department of Planning and Zoning, explained
that Coordinated Development Districts are employed by the City
to "encourage higher density development around Metro
stations." Essentially, within a Coordinated Development
District, the floor area ratio for determining the maximum square
footage of permissible development, or "density," for a
given parcel of land may be increased by combining its
development with that of adjoining parcels. According to Johnson,
the parcels of land included in a combined development proposal
need not necessarily coincide with the boundaries of lots as
reflected in the land or tax records.

By combining the development of Parcels 9 and
10 with that of Parcel 11, the floor area ratio for the combined
parcels would be raised from 1.25 to 3.75. Alexandria Zoning
Ordinance ? 5-602. Moreover, the total density permitted in
the development would be based upon the application of the floor
area ratio to the combined area of the three parcels, rather than
to each parcel individually. In other words, the density of
development of one parcel would not be limited based upon its
area so long as the total density of development of the three
parcels combined did not exceed that allowed under the zoning
ordinance.

"Mill Race – Old Town Commons," the
development proposed for Parcels 9, 10, and 11, consists of four
high rise residential towers, principally located on Parcel 11,
and a fifteen story office building located solely on Parcels 9
and 10. A ground level plaza with retail commercial space and
parking garages, both below and above ground, connect the five
main buildings of the development.

The record shows that efforts were made to
coordinate the development of Parcels 9, 10, and 11 with the
development of Hoffman’s parcels in the Eisenhower Avenue
Metro valley. However, because of competing interests, the
parties were unable to reach an accord on joint development.

On August 13, 1997, Hoffman filed a bill of
complaint seeking a declaratory judgment that the proposed
development of Parcels 9, 10, and 11 would violate the
restrictive covenant in the December 11, 1989 deed conveying
Parcel 11 to Mill Two. Because of changes in ownership of the
parcels, see note 2 supra, and the continuing
process of obtaining approval from the City of Alexandria for the
proposed development, Hoffman filed an amended bill of complaint
on October 22, 1997. The gravamen of Hoffman’s suit,
however, continued to be that the use of the land area of Parcel
11 to increase the density of commercial construction permitted
on Parcels 9 and 10 was violative of the restrictive covenant in
that this constituted a use of Parcel 11 for other than
residential and supporting commercial purposes.

On November 7, 1997, Mill Two filed a demurrer
to the amended bill of complaint, asserting that the case was not
yet ripe for decision. Mill Two asserted that the plan for
development of Parcels 9, 10, and 11 as alleged in the bill of
complaint was not sufficiently certain to warrant a declaratory
judgment.

On November 14, 1997, Old Town Development
filed an answer and cross-bill to the bill of complaint.
[3] Old Town Development contended that Hoffman had no
standing to challenge the proposed development of Parcels 9 and
10. Old Town Development further contended that Hoffman’s
suit was an improper attempt to bring "a cloud on the
title" of Parcel 11 and sought damages on that account.

Hoffman filed a motion for summary judgment on
the cross-bill, contending that a lawsuit could not constitute an
improper attempt to cloud a title. On December 23, 1997, the
chancellor heard argument on the motion for summary judgment, but
declined to rule on the matter and, rather, permitted Old Town
Development to file an amended cross-bill. Hoffman then moved the
court to dismiss the case, asserting that its bill of complaint
was premature, and that, but for the filing of the cross-bill, it
would have taken a voluntary nonsuit. Old Town Development and
Mill Two took the position that the case was ripe for decision in
order to resolve the "cloud hanging over us." The
chancellor ruled that there was a justiciable controversy and
denied Hoffman’s motion to dismiss.

On December 30, 1997, Old Town Development
filed its amended cross-bill. Included in the relief sought in
that pleading was a determination of whether the proposed
development of Parcels 9, 10, and 11 would violate the
restrictive covenant on Parcel 11.

During the pendency of the proceeding before
the chancellor and despite concerns over the failure to
coordinate development with Hoffman, on January 24, 1998, the
Alexandria City Council approved, subject to certain
restrictions, the Coordinated Development District Concept Plan
submitted by Old Town Development for Parcels 9, 10, and 11. The
approval of the concept plan does not permit the beginning of
construction, which requires the further approval of final site
plans and the grant of building permits. In addition to approving
the concept plan, the City also approved a necessary zoning
change and granted a special use permit for traffic management
related to the development of phase one of Old Town Commons.

Having previously filed a demurrer to the
amended cross-bill, on February 18, 1998, Hoffman filed a motion
to dismiss its amended bill of complaint or, in the alternative,
to be allowed to take a voluntary nonsuit. Hoffman also filed a
motion to dismiss the amended cross-bill. In each of these
pleadings Hoffman again asserted that there was not yet a
justiciable controversy between it and Old Town Development,
either because Old Town Development had not yet acquired an
interest in Parcel 11 or because the plan for development of
Parcels 9, 10, and 11 was not yet sufficiently certain to permit
a declaratory judgment on the effect of the restrictive covenant.
Old Town Development filed responsive pleadings, with supporting
materials, opposing Hoffman’s efforts to prevent the
chancellor from rendering a judgment on the merits.
[4]

A three-day hearing on these issues commenced
on February 27, 1998. The voluminous record of testimony and
exhibits that resulted from that hearing need not be summarized
here except to the extent that the facts have already been
recounted above. It shall be sufficient to state that Hoffman
argued forcefully for the dismissal of its amended bill of
complaint and Old Town Development’s amended cross-bill,
while maintaining that if the case were ripe for decision, the
coordinated development of Parcels 9, 10, and 11 violated the
restrictive covenant on Parcel 11 by permitting its land area to
be used in augmenting the permissible density of commercial
development of the other two parcels. Hoffman also asserted that
the proposed commercial retail space on Parcel 11 violated the
restrictive covenant because it was not intended for
"residential support." Old Town Development presented
evidence that it was close to receiving approval to begin
construction of the first phase of the development, necessitating
a judicial determination of the effect of the restrictive
covenant. Old Town Development maintained that its proposed
development of the three parcels did not violate that covenant.

On March 31, 1998, the chancellor entered a
final decree, which dismissed Hoffman’s amended bill of
complaint with prejudice and granted judgment for Old Town
Development on its amended cross-bill. Specifically, the
chancellor ruled "that the development plans of Old Town
[Development], as presented in evidence in this proceeding and to
the City of Alexandria, do not violate the covenant
. . . given by defendant Mill Two . . . to
Hoffman." We awarded Hoffman this appeal.

DISCUSSION

Hoffman first contends that the trial court
erred in dismissing its amended bill of complaint with prejudice
and in addressing the merits of the amended cross-bill because no
justiciable controversy existed between Hoffman and Old Town
Development concerning the proposed use of Parcels 9, 10, and 11.
We disagree.

The circumstances under which a circuit court
may render a declaratory judgment are provided for by statute and
have been frequently addressed in our prior decisions. Under the
Declaratory Judgment Act (the Act), Code ?? 8.01-184
through -191, circuit courts have the authority to make
"binding adjudications of right" in cases of
"actual controversy" when there is "antagonistic
assertion and denial of right." Code ? 8.01-184; Blue
Cross & Blue Shield v. St. Mary’s Hospital
, 245 Va.
24, 35, 426 S.E.2d 117, 123 (1993); Erie Insurance Group v.
Hughes
, 240 Va. 165, 170, 393 S.E.2d 210, 212 (1990); Reisen
v. Aetna Life & Casualty Co.
, 225 Va. 327, 331, 302
S.E.2d 529, 531 (1983). The Act does not give trial courts the
authority to render advisory opinions, to decide moot questions,
or to answer inquiries that are merely speculative. Blue Cross,
245 Va. at 35, 426 S.E.2d at 123; Erie, 240 Va. at 170,
393 S.E.2d at 212; Reisen, 225 Va. at 331, 302 S.E.2d at
531. The Act also is not to be used as an instrument of
procedural fencing, either to secure delay or to choose a forum. Liberty
Mutual Insurance Co. v. Bishop
, 211 Va. 414, 419, 177 S.E.2d
519, 522 (1970); Williams v. Southern Bank, 203 Va. 657,
662, 125 S.E.2d 803, 807 (1962).

The authority to enter a declaratory judgment
is discretionary and must be exercised with great care and
caution. Liberty Mutual, 211 Va. at 421, 177 S.E.2d at
524. Furthermore, when the resolution of a disputed fact would be
determinative of a case, rather than a construction of definite
stated rights, status, or other relations, commonly expressed in
written instruments, the case is not appropriate for declaratory
judgment. Id. at 420, 177 S.E.2d at 523; Williams,
203 Va. at 663, 125 S.E.2d at 807. Ultimately, however, the Act
is remedial, having the express purpose "to afford relief
from the uncertainty and insecurity attendant upon controversies
over legal rights, without requiring one of the parties
interested so to invade the rights asserted by the other as to
entitle him to maintain an ordinary action therefor." Code
? 8.01-191. The Act is to be "liberally interpreted
and administered with a view to making the courts more
serviceable to the people." Id.

Hoffman contends that the limitation of the
restrictive covenant in the December 11, 1989 deed was not ripe
for determination in a declaratory judgment action because Old
Town Development had no vested right to develop Parcels 9, 10,
and 11 at the time the original action commenced. Even conceding
that the approval of the Coordinated Development District Concept
Plan for those parcels occurred prior to the chancellor’s
rendering judgment, Hoffman contends that it was still purely
speculative whether Old Town Development would receive the
necessary final zoning and building permit approvals before the
right to begin construction would be assured.

With respect to land use issues, it is true
that we have at times defined the nature of a declaratory
judgment suit in terms of whether the party seeking the judgment
has acquired some vested right by virtue of zoning approval and,
thus, is entitled to the relief sought. See, e.g., Town
of Stephens City v. Russell
, 241 Va. 160, 164, 399 S.E.2d
814, 816 (1991). However, we have never held that a party must
establish a vested right, in the form of governmental approval to
proceed with development, before obtaining a declaratory judgment
on the issue whether some private right would bar that
development.

While we can envision cases where the proposed
development of property would be so speculative and indefinite as
to not rise to the level of a justiciable controversy, such is
not the case here. The record shows that Mill Two and Old Town
Development have taken substantial steps, with significant
financial expense, in developing specific plans for the
development of residential and commercial buildings on Parcels 9,
10, and 11. From the detail and scale of those plans, it is
certain that governmental approval of the density of the
commercial portion of that development will require the increased
floor area ratio provided by treating the three parcels as part
of a coordinated development. Thus, while those plans may undergo
revision prior to Old Town Development receiving final approval
to begin construction, nothing in the record suggests that those
plans would be altered so radically as to render speculative the
central issue raised in this declaratory judgment suit. Moreover,
without a judicial resolution of the effect of the restrictive
covenant in question the parties would be left without relief
from the uncertainty and insecurity attendant upon the continuing
controversy of their legal rights with regard to this covenant.
Accordingly, we hold that, on the specific facts of this case, a
justiciable controversy existed at the time Hoffman filed the
initial bill of complaint, and that the chancellor properly
exercised his jurisdiction thereafter in rendering judgment to
resolve that controversy.

We now consider Hoffman’s contention that
the chancellor erred in finding that the development proposed for
Parcels 9, 10, and 11 did not violate the restrictive covenant in
the December 11, 1989 deed. The essence of Hoffman’s
contention in this regard is that the covenant restricts not
merely the uses that may be made upon Parcel 11, but also
the uses that may be made of Parcel 11. Hoffman first
asserts that the language of the deed is unambiguous and, thus,
the chancellor should have applied its plain meaning "in
light of the circumstances at the time of its creation."
Hoffman then asserts that under those circumstances in this case,
the terms "property" and "developed" in the
phrase "the property set forth above shall be developed for
residential purposes only" in the restrictive covenant are
terms of art which should be given the meaning intended by the
parties as evidenced by their dealings. That meaning, Hoffman
further asserts, is that "property" refers to the
boundaries of a parcel of land and to all "[t]he bundle of
rights attaching to [land] . . . which includes the
right of development," and "developed" refers to
"planned unit developments" of the type contemplated in
a Coordinated Development District or under a similar zoning
scheme. Thus, Hoffman concludes that the covenant restricts the
use of the development rights attached to Parcel 11 in the
proposed development of Parcels 9, 10, and 11 as one tract of
land. We disagree with Hoffman.

It is the well settled rule of this
Commonwealth that if the language in a deed is clear,
unambiguous, and explicit, a court called upon to construe such
language should look no further than the four corners of the deed
itself. Irby v. Roberts, 256 Va. 324, 329, 504 S.E.2d 841,
843 (1998). Thus, contrary to Hoffman’s contention, parol
evidence of "the circumstances at the time of [the
deed’s] creation" is not to be considered in giving
effect to the clear, unambiguous, and explicit language of the
deed. Daugherty v. Diment, 238 Va. 520, 525, 385 S.E.2d
572, 574 (1989).

The plain meaning of the language emphasized by
Hoffman does not support the broad construction of the terms
"property" and "developed" that Hoffman
asserts. Here the term "property" is modified by the
phrase "set forth above." This is clearly a reference
to the physical description of the property earlier in the deed.
Similarly, the term "developed" must be read in the
context of the language that both precedes and follows it. When
so read, the clear, unambiguous, and explicit language of the
covenant restricts the development that may occur on Parcel 11 to
residential uses, excluding hotels and motels, but permitting a
limited amount of supporting commercial uses. Nothing in this
language imposes a limitation on Parcel 11 being developed in
conjunction with other parcels in the Coordinated Development
District. While we agree that Hoffman could have drafted the
covenant to apply to "development rights" related to
"planned unit developments," it simply failed to do so
with the language of this covenant.

Finally, Hoffman contends that the chancellor
erred in failing to find that the retail commercial space
included in the proposed residential development of Parcel 11
violates the restrictive covenant. Hoffman does not contend that
the amount of retail commercial space exceeds the fifteen percent
limitation of the restrictive covenant. Rather, it contends that
under the development proposal the retail commercial space
"is intended to serve the entire local region." Thus,
Hoffman contends that the scope of the proposed retail commercial
development exceeds that contemplated by the phrase "for
residential support" in the restrictive covenant.

The phrase "commercial space for
residential support" clearly imports that the retail
commercial space should benefit the residential development of
Parcel 11. Nothing in that language suggests, however, that the
customer-base of the retail commercial space must be restricted
to the residents of that development. It is, therefore, not
inconsistent with the language of the covenant that the retail
commercial space permitted as part of the development of Parcel
11 may also serve the occupants of the adjoining parcels or those
of the surrounding environs so long as its purpose does not
exclude providing retail commercial support to the residential
development of Parcel 11.

The chancellor found that there was a lack of
"persuasive evidence that the [retail commercial space] is
particularly oriented to support the commercial buildings as
opposed to the residential buildings." When the chancellor
hears evidence ore tenus, his decree is entitled to the
same weight as a jury verdict, and we are bound by the
chancellor’s findings of fact unless they are plainly wrong
or without evidence to support them. Rash v. Hilb, Rogal &
Hamilton Co.
, 251 Va. 281, 283, 467 S.E.2d 791, 793 (1996).
Additionally, we review the evidence and all reasonable
inferences fairly deducible therefrom in the light most favorable
to the prevailing parties below. Id. Applying that
standard, we cannot say that the chancellor’s determination
that the proposed retail commercial space did not violate the
restrictive covenant was in error.

CONCLUSION

For these reasons, we find no error in the
chancellor’s declaratory judgment that the proposed
development of Parcel 11 in conjunction with Parcels 9 and 10
will not violate the restrictive covenant in the December 11,
1989 deed. Accordingly, that judgment will be affirmed.

Affirmed.

 

FOOTNOTES:

[1] Although not evidenced in the
record, it is undisputed that the Hoffmans transferred their
interest in this covenant to this limited liability corporation
prior to the initiation of the suit for declaratory judgment from
which this appeal arises. Because the interests of the Hoffmans
and the successor corporation are identical, we will hereinafter
refer to "Hoffman" whenever referencing the party
seeking to enforce this covenant.

[2] Also named as respondents in this
litigation were Old Town Development’s predecessor in
interest, another development firm, and a construction firm
involved at various points in the joint venture to develop
Parcels 9, 10, and 11. These parties were subsequently dismissed
from the suit and are not parties to this appeal. Subsequent to
the filing of the original declaratory judgment suit, Old Town
Development acquired a contract purchase interest in Parcel 11
from Mill Two. Accordingly, Old Town Development is the principal
party in interest that seeks to develop these three parcels.

[3] The cross-bill was initially styled as a
"counterclaim." In this opinion, we will use
"cross-bill," the proper term for this type of pleading
in a chancery suit. See Rule 2:13 ("Cross-Bill
Against Plaintiff").

[4] As we have previously noted, this
change in the essential positions of the parties, whereby Hoffman
sought dismissal and Old Town Development sought an adjudication
on the merits, resulted from the changes in ownership of Parcel
11 and the continuing process of obtaining approval from the City
of Alexandria during the pendency of the suit.

 

 

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