Tag: Litigation

Design Professionals Can Now Limit their Liability Through Contract

Posted on by Admin

These provisions typically limit a party’s liability to the amount of the contract or some predetermined amount. Historically, such provisions have been generally enforceable in Virginia for everyone except design professionals — that is, engineers, architects, and/or surveyors.

Until recently, provisions limiting the liability of design professionals were often held unenforceable, because Virginia law prohibited firms engaged in the business of professional engineering, architecture, and land surveying from “limit[ing] the liability of any licensee or certificate holder for damages” arising from its actions. However, a recent amendment to the Virginia Code not only eliminated the above-referenced language but added language providing that design professionals shall NOT be prohibited from “limiting liability through contract.” We note that this amendment is not retroactive, however.

While the amendment allows limits on the liability of design professionals, another Virginia Code section prohibits certain indemnification and hold harmless provisions that are designed to completely insulate a party from liability, rather than limit their liability. This rarely used code section invalidates certain contract provisions commonly used by owners or general contractors when they attempt to impose “indemnity or hold harmless” obligations on their architect or engineer. The bottom line is that consulting professionals may be agreeing to contract indemnity provisions that are actually unenforceable.

These laws will provide ammunition for consultants to better protect themselves through their contracts. Design professionals are encouraged to take advantage of these changes and have their standard contracts reviewed and revised. Please feel free to contact Garth Wainman or Matt Westover to discuss any questions you may have regarding these statutes.

Developers Taking Over Troubled Projects Must Take Caution

Posted on by Admin

A problem that has come to prominence recently is the developer that has run into financial problems and is no longer able to finish the project. Often in these cases the project is taken over by the bank or another developer. Generally speaking, the documents in these projects are in a very uncertain state. Significant problems may arise if some of the lots have been conveyed to the end-user by the original developer. In many cases, the new developer, for market reasons, needs to go in a different direction. In these cases, promises made by the original developer to owners, even oral ones, may be enforceable against the new developer under the law of Equitable Servitudes.

In Virginia, a court may use its equitable powers to enforce the promises made by a developer to an end-user who purchased property under the original scheme of development, even if that scheme of development has not been fully documented in the land records. If a new developer steps in to finish the project and had knowledge of, or even the opportunity to obtain knowledge of, the promises made by the original developer, then the theory of “equitable servitude” can be used to enforce the original developer’s intent, despite the fact that the lot has no recorded covenants.

Recently, we had the opportunity to put this concept to a test. A planned 21 lot single-family residential neighborhood of million dollar plus homes stalled during the middle of the 2008 financial crisis. The bank forced the developer to stop the project. A friendly foreclosure ensued. However, the developer had sold 3 finished lots prior to the foreclosure and had promised those owners that the entire subdivision would remain single-family dwelling units only. The original developer, seeking cash to appease the bank, sold some of the parcels to Loudoun County who intended to put a massive fire station complex on the two lots it purchased. The County knew of the original developer’s original intent for the project but believed it could proceed with the fire station because the restrictive covenants, which were intended to be recorded by the original developer limiting the property to a typical residential subdivision, had not been recorded.

Using the concept of equitable servitude, our attorneys Andy Burcher and Mike Kalish filed suit on behalf of the homeowners who had purchased from the original developer. The goal was to impose an equitable servitude enjoining the County from building anything that was inconsistent with the original developer’s scheme of development: detached single family residences. After a two-day trial, the Loudoun County Circuit Court concluded that the County had actual and constructive knowledge of the original developer’s scheme of development of detached single-family residences. Based on this knowledge, the Court enjoined the County from using the property for anything other than a single-family residence. The case is Oliver, et al v. Board of Supervisors (Loudoun County 2011), Letter Opinion dated December 2, 2011 by Judge Burke F. McCahill. The County appealed the decision and the Virginia Supreme Court denied the appeal, finding no error by the trial court.

For developers, it is important to understand the nature of the property that you are purchasing. Due diligence obviously includes a proper title search. However, due diligence must include a complete understanding of the history of the property and potential obligations of the original owner beyond the land records. The possibility that adjoining parcels that were part of an original scheme of development may be able to thwart your plans through an equitable servitude should not be ignored.

Lamb Center v. City of Fairfax

Posted on by Admin

Firm attorney John Foote was recently successful for the second time in a single Supreme Court Term. In The Lamb Center v. City of Fairfax, a case Mr. Foote argued, the Virginia Supreme Court reversed the trial court and concluded that the Fairfax City Code could not be read to preclude “accessory or complementary” uses to a principal use when those accessory or complementary uses are comparable to other uses permitted in the same district in a local zoning ordinance.

The Lamb Center operates a counseling center that provides services to homeless persons. Its property is located in a C-2 zoned retail commercial area, and when the counseling center commenced, the City considered it a permissible office use. Subsequently, however, the City concluded that certain additional services provided to those receiving counseling free of charge in the form of light snacks, showers, laundry services, and haircuts, had transformed the otherwise permissible office use into an impermissible “eleemosynary” use not permitted in the C-2 district.

The Supreme Court disagreed, finding the additional services to be, in fact, “accessory or complementary” to the permitted counseling office use. It did so for two reasons.

First, the Court looked to the zoning ordinance and noted that all of the uses permitted by right in the C-1 office district were also permitted in the C-2 district. It further noted that because the C-1 district explicitly allowed for barbershops, restaurants, refreshment areas, and health clubs as accessory uses, that it necessarily follows that provision of the additional services to which the City objected were “accessory” to the counseling center’s indisputably permissible C-2 office use.

The Court also observed that because the City had actually known about the Lamb Center’s laundry and shower facilities when it issued the Center non-residential use permits in 1992 and 2001, the City had effectively determined that those showers and laundry services were permissible accessory uses to the counseling center at that time. The Court held that by twice making such a determination the City had already interpreted the term “accessory” to include those laundry and shower services, and that its interpretation should be given great weight in the context of this case. Because both were permissible in 1992 and 2001, those additional services remained permissible accessory uses at the time the City ruled otherwise.

Finding that the trial court had erred in sustaining the City’s violation notices against The Lamb Center, the Court ordered that court to reinstate a Board of Zoning Appeals’ decision that the additional services were in fact “accessory or complimentary” to the Center’s permitted counseling office use.

Key Takeaways:

  • Permissible accessory or complimentary uses in one zoning district may be used to determine whether uses in another district are “accessory or complementary” in the latter district when the uses in the first District have been incorporated by reference in that latter classification.
  • A zoning administrator’s prior determinations in connection with the issuance of use permits may constitute evidence of a locality’s interpretation of its ordinances, and such an interpretation must be given great weight by a reviewing court.

Virginia Supreme Court Overturns Long Lane

Posted on by thelandlawyers

In an opinion handed down on June 7, 2012, the Virginia Supreme Court reversed the Loudoun County Circuit Court’s decision in Long Lane Associates Limited Partnership v. Town of Leesburg and held that an adjoining landowner in a development subject to common proffers has no vested right in the continuation of the original zoning.

Long Lane alters the result in a case that had troubled land use lawyers, since it appeared to limit severely the ability to change the zoning in planned developments after portions had been sold, and to place a veto power in the hands of other owners. The most important aspects of the opinion are that:

1. A landowner can only have a vested right in its property, and not the use or expectation of use in a neighbor’s land.
2. A landowner can only have a vested right in the use of his or her land, and not a particular proffer.
3. A landowner does not need the consent of other owners of land subject to a common proffer scheme to seek a rezoning of its land.
4. Each individual parcel of property subject to such a scheme is a “property” under Va. Code Ann. § 15.2-2303(A) and therefore that statute does not create enforceable rights in adjacent owners, and the zoning of each parcel may be “subsequently amended.”
5. The adoption or amendment of written proffers or rezoning ordinances, and the amendment of a comprehensive plan are legislative acts that will not be disturbed absent clear proof that they are unreasonable, arbitrary, and bear no relation to the public health, safety, morals, or general welfare.