Vintage victory

Listen to this article

A group of Prince William County homeowners not only lost their court fight to block a winery from opening in their rural subdivision, they now are on the hook for the winery’s legal fees of more than $110,000.

The owner of Effingham Manor winery near Nokesville must have raised a glass after the judge’s ruling that a 2006 amendment removing the winery property from homeowner association rules was valid even without a statutory certification.

The winery now pours its wares on a parcel dominated by a residence as old as the nation. Built in 1776, Effingham Manor was originally owned by William Alexander, great-grandson of the namesake of the city of Alexandria. Along with the house are said to be a smokehouse, a blacksmith shop and a historic English garden terrace.

Wine-maker and owner Chris Pearmund envisioned the proposed winery as a smaller version of Mount Vernon.

Neighbors in the Alexander Lakes subdivision instead had visions of bright lights, loud music and heavy traffic in their peaceful community. Some even worried about drunken motorists weaving their way back to the highway.

Winery neighbors say they were caught unaware about the possibility of a commercial enterprise in their midst. Alexander Lakes – about 495 acres in total – is a cluster of large homes on large lots. Rail fences are common. Circuit Judge Steven S. Smith put it this way:

“This area of Prince William County was historically farmed in large tracts by individual families, but the 21st century has given way to the farmette within a rural setting.”

Disputed amendment

The “farmettes” of Alexander Lakes emerged on paper in 2004 with a deed of subdivision and easement that broke the property into 49 lots, most about 10 acres. A homeowners association was incorporated that year, as well.

In 2005, the owner corporation filed a declaration of covenants for the 49 lots, but the next year the company filed an amendment to the covenants which purported to remove the manor house lot from the covenants.

Winery a surprise

That amendment – and the fact that it might open the land to a commercial enterprise – was unknown to most of the property owners who opposed the winery a decade later, according to their lawyer. Sharon E. Pandak of Woodbridge said sales representatives may have known about the exception for that lot, but failed to tell purchasers about the amendment or its implication for an “event center” at the manor house.

Families who bought the expensive lots, protected by extensive covenants, claimed they were taken aback by the winery plan announced in 2016.

The homeowners fought the winery at the local government level, through the state ABC agency and finally in circuit court. A dozen neighbors sued Pearmund, the winery and their HOA. After pretrial motions, the winery – Effingham Manor LLC – was the only remaining defendant.

The homeowners contended the winery would breach the community’s covenants because the exempting amendment never became effective. The amendment was not filed with a certification required by the Virginia Property Owners Association Act, they argued.

Amendment process at issue

Property owners associations are created by declarations that establish rules. The POAA, in § 55-515.1, says a declaration may be amended by a two-thirds vote of the owners. Such an amendment is effective when recorded at a courthouse, together with a certification by a POAA official that the requisite number of owners signed their approval.

That formality was not necessary in the winery case, Smith ruled. The exempting amendment was valid because it was executed pursuant to the original sudivision declaration, even if it did not follow the POAA certification requirement, Smith decided in Dalrymple v. Effingham Farm Homeowners Ass’n (VLW 017-8-093).

The opinion is dated May 26. The opinion addressed an apparent conflict in the law. The absence of a statutory certification invalidated an amendment in the 2016 Virginia Supreme Court case of Tvardek v. Powhatan Village Homeowners Ass’n Inc. (VLW 016-6-007).

However, in the high court’s 2011 in Zinone v. Lee’s Crossing Homeowners Ass’n (VLW 011-6-105), amendments made pursuant to express terms of the declaration were held valid, without regard for the statutory procedure.

Smith said the Zinone analysis applied. Where the code used “may” instead of “shall,” the legislature recognized that an alternative method of amendment might be used if authorized by a declaration, the judge said. In the winery’s case, the disputed amendment was within rules established by the declaration.

In a footnote, Smith noted that the General Assembly this year amended § 55- 515.1 to reflect that amendment procedures within a declaration would not be subject to the POAA’s procedural requirements for amendments. The amendment took effect July 1.

The winery’s case was bolstered by the fact that the developer’s amendment was within a seven-year window for unilateral changes by the developer to “correct errors or omissions,” Smith said.

The developer, Frank Smerbeck, testified he always intended to keep the Effingham lot free of residential restrictions because of its historical significance and potential for other uses, including events. He said the failure to exempt the winery property from the covenants was merely a “scrivenor’s error” he sought to fix with the amendment, according to Smith’s opinion.

Smith held that the amendment was valid because it was executed in accordance with common law, pursuant to the declaration, and was not subject to the additional requirements of the POAA.

Road maintenance agreement

Smith also examined an agreement in which the winery agreed to pay half of the subdivision’s road maintenance costs in light of the increased traffic it would generate. The homeowners argued the agreement was flawed and the winery should be barred from use of the road.

The judge concluded the maintenance agreement had no effect on the property owners’ easement over the road. He similarly rejected a claim that a winery would “overburden” the easement, pointing to the developer’s original plan for agricultural use of the manor house property.

Judge Tracy C. Hudson signed an Aug. 31 order entering judgment for attorney’s fees and costs in the amount of $110,059.25 against the 12 homeowners who sued. The homeowners were “stunned,” according to Pandak, but she said the cost of appeal was “too high.”

Blindside was bilateral, lawyer says

Manassas lawyer Randolph D. Frostick, who represented the winery, said his client did not envision the opposition, let alone the litigation, that greeted his winery plan.

“It just seemed to be a good fit,” Frostick said of the original plan. Of winemaker Pearmund, Frostick said, “He did everything he could possibly do before buying this lot to do the right thing.”

If homeowners felt blindsided by the winery plan, Pearmund felt blindsided by the opposition, Frostick said. “These people just attacked him in any way they could. At the end of the day, it did not inure to their benefit.”

Frostick said lawyers for property owners associations had been concerned over the Tvardek ruling, worried that amendments commonly performed pursuant to declaration rules might be vulnerable to attack. The legislative amendment, bolstered by the Effingham opinion, should end that concern, he said.