No injunction to ensure compliance with SCV ruling

Where defendant homeowners ultimately prevailed in the Virginia Supreme Court against plaintiff homeowners association’s enforcement of a holiday lighting policy, defendants are not entitled to an injunction to ensure defendant’s compliance with the ruling.

Background

In a previous phase of this case, the Belmont Glen Homeowners Association (HOA) sued Sanjay and Sonia Sainani (homeowners) to collect assessments the HOA levied against them for violating a holiday lighting policy. The policy specified how long and during what hours holiday lighting could be displayed.

The homeowners filed a counterclaim seeking an injunction to prevent the HOA from enforcing the policy, along with costs, fees and interest. They also sued for breach of contract or, in the alternative, breach of the Virginia Property Owners’ Association Act.

This court sustained the HOA’s motion to strike the counterclaims. The court entered judgment for the HOA for the $884 in assessments against the homeowners and more than $39,000 in attorney’s fees and costs. The court ordered the homeowners to remove the lighting and not reinstall it unless the lighting complied with the policy or with the express, written permission of the Architectural Review Board.

On appeal, the Virginia Supreme Court found that the lighting policy was unenforceable and reversed. The ruling placed the homeowners’ counterclaims before this court.

In a previous ruling, this court granted the homeowners partial summary judgment on their breach of contract claim, rendering their statutory claim under the Property Owners’ Association Act moot. The remaining issues are whether an injunction should issue to prevent the HOA from enforcing the policy against the homeowners and whether the issue of attorney’s fees was bifurcated, which would allow the homeowners to present evidence on that issue.

Injunction

“Homeowners seek injunctive relief prohibiting the HOA from enforcing its Holiday Policies against them, imposing charges, and suspending their member privileges. They argue that the HOA’s enforcement of the Holiday Policies deemed unenforceable by the Virginia Supreme Court constitutes an unlawful interference with their real property rights. Such rights are difficult to quantify for the purposes of seeking damages. As such, the injunction is necessary to protect their rights and prevent future arbitrary enforcement of the policy. Homeowners contend that such an injunction creates no undue burden on the HOA because it merely mandates compliance with the Virginia Supreme Court’s ruling. …

“The HOA retorts that there is no basis for the requested injunction. The HOA sought to adopt and enforce the Holiday Policies in accordance with its declarations. It was unaware that they did not have the authority to do so. While that enforcement lasted three years, Homeowners did not challenge the enforceability of the Holiday Policies until litigation began.

“The HOA notes that the enforceability of the Holiday Policies was a complicated issue to resolve even for the courts. Thus, there is no evidence that the HOA was acting in bad faith. Moreover, the HOA contends that an injunction is improper because there is an adequate remedy at law for the Homeowners, as evidenced by this Court’s award of damages for the breach of contract. For these reasons, the HOA asks the Court to deny the Homeowners’ request for injunctive relief. …

“The Court first considers the issue of irreparable harm. This case involves the enforcement of the Holiday Policies as they apply to the Homeowners’ real property. The evidence demonstrates that such enforcement, in the past, has led to the HOA assessing charges, suspending the Homeowners’ membership privileges, and filing liens against the property. … [T]he Court finds there is a risk of irreparable harm to the Homeowners if the injunction is not entered and the HOA continues to attempt to enforce the Holiday Policies.

“The procedural history of this case, however, is such that there is an adequate remedy available to the Homeowners. First, the law presumes that parties will obey the law. … The law, as it applies to the parties per the Virginia Supreme Court’s holding, is that the Holiday Policies are unenforceable. Thus, the HOA is presumed to abide by that holding. To the extent that they do not, Homeowners may initiate enforcement actions against the HOA. Alternatively, as they have successfully done in the present case, they may seek damages for the HOA’s interference with their rights. …

“[T]he Court finds that an injunction is not warranted given the facts of this case and finds in favor of the HOA.”

Fees

“The Court notes that Supreme Court Rule 3:25(d) allows for the bifurcation of attorney’s fees and costs from the trial. In the case at bar, the Court finds that the parties agreed to bifurcate at the commencement of the underlying trial. … The HOA took advantage of this bifurcation after the Court granted its Motion to Strike. As a result, the HOA submitted evidence of its attorney’s fees and costs and was granted a hearing on the issue at a later date.

“The Court finds that, in light of the Supreme Court’s remand, the clock has been figuratively turned back to when the Court granted the HOA’s Motion to Strike. At that juncture, the parties had agreed to bifurcate attorney’s fees and costs claims. At that time, neither party objected to the bifurcation and neither party requested a pretrial order of bifurcation.

“The Court cannot now alter that position to the benefit of one party and the detriment of the other. As such, the Court finds that the issue of attorney’s fees and costs was bifurcated and preserved. The Court further finds that this determination does not run afoul of its prior award of appeal costs, as the parties agreed to the award of such costs.”

Belmont Glen Homeowners Ass’n v. Sainani, et al., Case No. CL00099985-00, Feb. 10, 2021, 20th Cir. Ct. (Irby). James J. Knicely, William A. Marr Jr., Marla J. Diaz for the parties. VLW 021-8-025, 6 pp.