answer to cross-bill, filed february 15, 1996

TABLE OF CONTENTS

Bill of Complaint, filed December 21, 1995 • • • • • • • • • • • • • • • • • • • . 1

Demurrer and Answer (Essex and Trustees), filed January 17, 1996 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 9

Demurrer, Answer, and Cross-Bill (BMC Properties), filed January 14, 1996 • • • • • • • • • • • • • • • • • • • • • • • • • • • . • • • • • 13

Answer to Cross-Bill, filed February 15, 1996 • • • • • • • • • • • • • • • • • 18

Motion for Summary Judgment (BMC Properties), filed June 11, 1996 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 20

Brief in Support of Motion for Summary Judgment (BMC Properties), filed August 28, 1996 • • • • • • • • • • • • • • • • • • • • • • • • 22

Responses to Interrogatories (BMC) • • • • • • • • • • • • • • • • • • • 29

Agreement for the Purchase and Sale of Real Estate • • . • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •. • 36

Agreement for the Purchase and Sale of Real Estate • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 45

Memorandum of Law in Opposition to Motion for Summary Judgment, filed September 19, 1996 • • . • • • • • . • • • • • • • • • • • • • • 54

Final Decree, entered November 20, 1996 • • • • . • • • • • • • . • . • • • • • 60

Plaintifrs Motion to Vacate the Decree, filed December 5, 1996 • • • • • • • • • • • • • • • • • • • • • • • . • • • • • • • • • • • • • • • • • • • • 62

Union Recovery Limited Partnership v. Thomas E. Horton. et al. • • • • • • • . . • • • • . • • • • • • • • • • • • • • . • • • • 70

Virginia Special Warranty Deed • . • • • • • • • • . • • • • • • • • • • • 73

Order, entered December 11, 1996 • • • • • • • • • • • • • • • • • • • • • • • • • 83

Notice of Appeal, filed December 18, 1996 • • • • • • • • • • • • • • • • • • • 84

~mended Notice of Appeal, filed December 19, 1996 • • • • • • • • • • • . 87 •o;

Statement of Facts, entered January 31, 1997 • • • • • • • • • • • • • • • • • 89

Assignments of Error • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 96

ePHERSON.

SANTOS. L.C

tS AT LAW

~ VIRGINIA

2·1287

VIRGINIA: IN THE CIRCUIT COURT FOR THE CITY OF WAYNESBORO

WAYNESBORO VILLAGE, L.L.C. ) ) )

Plaintiff

v.

BMC PROPERTIES Defendant

Serve: John A. Conrad 5500 Toddsbury Road Richmond, Virqinia 23226

and

c. P. Barqer Rural Route 1 Waynesboro, VA 22980

and

BANK OF ESSEX Serve: ·

) BILL OF COMPLAINT ) )

Alexander F. Dillard, Jr., Reqistered Aqent Ritchie House Prince and cross streets Tappahannock, VA 22560

and

ALEXANDER F. DILLARD, JR., TRUSTEE Ritchie House Prince and cross Streets Tappahannock, VA 22560

and

EARL R. JOHNSON, TRUSTEE 323 Prince Street Tappahannock, VA 22560

The Plaintiff, Waynesboro Village, L.L.c., respectfully

represents as follows:

1. This is a suit for declaratory judgment brought pursuant

to provisions of Section 8. 01-814, et seq. of the Code of Virginia,

1950, as amended, for the construction and interpretation of a

- 1- 1.

N McPHERSON.

'5 1!1 SANTOS. L.C

lRNEVS AT LAW

NTON VIRGINIA

ZA.A.02·1Z87

restriction contained in the deed described in Paragraph 6 of this

bill of complaint.

2. BMC Properties (BMC) is a Virginia partnership, of which

the Defendants John A. Conrad and c. P. Barger are partners.

3. The Defendant Bank of Essex (the Bank) is the holder of

the note secured by the deed.of trust described in paragraph 7.

4. The Defendants Alexander F. Dillard, Jr., and Earl R.

Johnson are trustees of the deed of trust described in paragraph

7.

5. By deed dated July 6, 1987, recorded in the Office of the

Clerk of the Circuit Court of the City of Waynesboro (the Cl~rk's

Office) in Deed Book 146, Page 732, Royal Oaks Investment Corpora

tion conveyed certain property to Shenandoah Vill·age Associates,

L. P. (SVA).

6 •. By deed dated June 20, 1989, recorded in the Clerk's

Office in Deed Book 160, 17 (a copy of which deed is attached

as Exhibit A), SVA conveyed to BMC a four acre tract of land in the

City of Waynesboro, Virginia, more specifically des9ribed in the

deed (the BMC Property) , which deed contains the following language

(the Restriction):

The party of the first part covenants and agrees (i) not to sell any remaining portion of the property which it acquired from Royal Oaks Investment Corporation for the use as a motel, hotel, inn or lodging business or similar facility, (ii) not to allow any remaining portion of the property which it acquired from Royal Oaks Investment Corporation to be used, constructed, or improved as a motel, hotel, inn or lodging business or similar facility, and (iii) that no such lodging facility or business shall be allowed to operate or exist within the boundaries of its remaining property. This restriction shall only apply for so long as the property herein conveyed to the party of the second part is being used as a motel, hotel, inn or lodging business or similar facility. Upon the discontinuance of such use, this restriction shall expire.

-.

7. By deed of trust dated October 19, 1994, which deed of

trust recorded in the Clerk's Office in deed book 209, page 808,

BMC conveyed the BMC Property to Alexander F. Dillard, Jr., and

Earl R. Johnson, Trustees, to secure payment of an indebtedness to

the Bank.

8. The Plaintiff, Waynesboro Village, L.L.C. (Waynesboro

Village), is the successor in title to SVA in the ownership of a

tract of land in the City of Waynesboro, Virginia, containing

135.801 acres (the WV Property), being the same property shown on

a plat entitled "Physical survey Waynesboro Village Factory

outlets" for FDIC as receiver for the Dollar Dry Dock Bank, dated

october 6, 1994, prepared by Tom Shumate, Surveyor, Inc., which wv Property is adjacent to the BMC Property. The wv Property was

conveyed to Waynesboro Village by deed dated october 28, 1994,

recorded in the Clerk's Office in Deed Book 210, Page 115.

9. Both the wv Property and the BMC Property are affected by

the Restriction.

10. Although the Restriction purports to restrict the use and

alienation of the WV Property, the Restriction appears to apply

only to SVA and to be valid only as long as the owner.of the BMC

Property uses the BMC Property for a "motel, hotel, inn or lodging

business or similar facility. 11 The BMC Property was not so used at

the time of the creation of the Restriction and has not subsequent-

ly been so used.

11. Waynesboro Village desires to sell the WV Property to

F"HERsoN. prospective buyers who may want to construct a motel, hotel, inn or ANTOS. L.C

i AT LAW

VIRGINIA

·12CI7

lodging business, or similar facility on the WV Property, which use

Waynesboro Village asserts is not in violation of the Restriction.

Waynesboro Village asserts that the Restriction i~ unenforceable as

a matter of law to prohibit the use of the WV Property for a motel,

hotel, inn, lodging business or similar facility.

12. BMC has informed Waynesboro Village that such a use of the

WV Property would violate the Restriction.

13. That language of the Restriction regarding its application

and expiration is ambiguous and requires interpretation by the

court.

14. There exists an actual controversy concerning the proper

construction, interpretation and effect of the Restriction within

the purview of Section 8.01-184 et seq. of the Code of Virginia,

1950, as amended, and Waynesboro Village has a judiciable interest

therein.

WHEREFORE, Waynesboro Village prays that the Court will take

jurisdiction of this proceeding; that the Court_will interpret the

Restriction; that the Court determine that the Restriction does not

prohibit the use of WV Property for a motel, hotel, inn, lodging

business or similar facility: and that the Court will order any

other relief that it deems equitable.

-:~LAGE, L.L.C.

Of counsel Victor v. Ludwig Nelson, McPherson, summers & Santos, L.C. P. o. Box 1287 Staunton, Virginia 24402-1287

N McPHERSON. ( 540) 885-0346 S A SANTOS. l..C

•RNEYS AT LAW

NTON VIRGINIA

!4A02·12D7

a:\clients\lawyers.b-c

.. -·· 4 -L.J.-

JU:._p' '95 15119 WA~ EXHIBIT A

.~VILLAGE

:11'-- ~11' . • 0984 Rr""r 1 .... 0 -1.., w-·~ r) ?.\CE :) I

'Ibis Dl!lD, .a. .a 8ll"t&N4 .u:= this ·20tb drZi af J'1me, 1969. bV cJS

be'tM!eft SS!2IAI1EXWI v.tirtAGB ASSCCJ•-:a, L.P ... a v~ lim.itEd partnership,

p:~rty of t:be fjzst putt, am! BC fteperUes~ a V,Ug£ma general ~p,

• ""*=- addzaa• a c/o Jotm A. CCGraci,. Esq., ~~ Allderson, Mu1cs & ~Uler,

801 East MaiD Street, Ric:l1raa¥1, VirgiD:la 23216

• * M I 'f X Z s. SET B • .•

Per aa! ~ ~ion of 'the sum of Tc :COllazs ($10 .. CO) ~ m han:! ' . paid. ~ far ~ Gocd .a -.luable CC"S~deratian pl88in; ma ~ paio1:y of

the secoad PIU"t 1mtc tte party of b fim~ part, 'tM Neeipt af Wbich is

~ aciD:Iwla!ged, tbe said Shm9mCEPJl Village~. L.P •• a VUginia ... .

lJ&I.te putDersbip. pa'ty of 'tt. finrt put, does _._. ~. grant:,

sell an! a:aMii wi:tll GII1I!ML 1IARRARl'! A1ll DmJSB CCVIHAI'IS a1 ttrt.E 1mtD liC .. ~' a v~ gaaalJBtttaaA\p, all tbat Clll"tii!D lot ar parcel of . . . . .

llftl, ~ w:i1:b all ba1ld111;a lid~ tts ttwzaz, :t-ights.

pr1v1lc;ca .i! ~ ~ belcqJ1tV ar :iD aayw:ise ~.

ISC%:l])ed lyirlO en! be1Jv ~ tbe CS"tf ot ~' VizV,inUl, cmd ~ 4.00 ~e bareco orded ~ -=ns • lltDm CD tta plat attacbiEIS MI:Ro eaUtlaJ "'faiftl' of Sabaiv'..sign oak. 4. 1t 81. Plat 4 Am-e Paft1a\ af ,.,.., r•:eb Vil1'91 ~. t..P. ~o;arty.

~. Virgm!a•, JIBde 1:11 1'a &aaate, ~. Im:., data! e.v 31,

l!MJa; tJei1V a px'ticn af tt. .... IDI ideatical ~ estate as 'tba1: ~

to 1:be pag:1:1eB af tbl fimt part - ~ at ~ ~ ~~ Corpm!:tica, da:taS 3al7 s, 198'7, aD! %i!CXJ11kl "m 1:be "Na7•es1 Uri) Circa:lt c=rt •

,wOfACD PloD~ :a&. ~wq,a.

II &. AUB. t.C. 'OMWMtt• ..0.~ :~l41t

·~

· Clsk's OffiCe m talA ia&* 1.48 at PIQe -n2., 1:o *ic:b. .u deB! am 5~l&t sad . -

ta tt. zwrw-=- 1:111re1n caatalDed, n!WeDCe 1s ne:e IB5e t= • ~

sc-t!caalal' ~ of 't:be ~ esiaw b:rre:iD aa.,..,.ci • 1tell as ~

&A'iW.'tiea. of ti'tle.

EXittBIT A

- ..5 -S"

i

' I l . l \ '

08109/85 15:3Y UOUol-'01..).11iJ

lA'I/1 OIACif AU&I.~TCK

WATICN, C:.U.U. amrs &. AwM. P.C.

I'A .... .,.,

WAYNiiSIDIQ, W1Q1N1A

~·· .. ~: ::

P.7/9

e001 1f)0 PACE 51b

. -2-

Fat- tbe fili!rlle .c:cnsiderat;.on aforesa1d, the ~ of 'tbe fi:-st part does

barebrf gram Cld ClaDUII!Jf 1mtn tb! party of tba ~part (1) en ea&efleftt. cf

ing:nlsB d. egz IF I 'tD St-Rrvkal-1 Villa;e tm"i9e £1-aa tbe ~ bue.iD

~~ ard bUDg ~ partiCQlarly·~£beiJ CD tbe afCZBBiiicl pla'C a8 a

30' by so• em ;at si~ em adjaim:rv pz:apa;ty af tbe party of the fimt

part at tiJe WI I rt CQLIEC .of ttJe property herem c:onvered and ( i~ a 2Q'

' ee • rt for 1te J.Dstalla'ticm. repU: aid ftlplac ~ut af a ami 'taz7 seer

lue octodi:v frca a~ asi;aa"ted as rc to t11e s:sa:tbem propwxt:y lil»

!bis ~- Ja .. ~ to a zo• eaeJr=nt fell' tba im"tallat1Cih.

~ .all! "Flac~at Clf a tllm.itazy .._. um ex•esrd:iqJ fltCIL a Rlnl'Dle

CJesi;cate4 • tm to tie PfCIJill!l tt ~ af a 4 .58& a:zre pa&-eeJ. CJh!d by Moss

Her 'enlan. ~ ..S ~ the :5tAtb Jt!S't rmw• of 1:l'ae proper~ herein

~. all as sb::llft em tM afaz e i" plat. 'lb:i& ~ is lll5e ·

~ ad:»ject ta m •n•n .. m:t

situated m tbe rat! e •~ ~ af tbe p&qwtJ "hmwln CAift!eli.

~ l8l1:r ot tt. • ., pirt ~a= ...,rtan 1ta"C (1) D) faclXiiy . .. ., .

c:a:tllrt Gl' S1e uat zataU states at' gas sta"t:U:D. (UJ D) ~-ve-.bl or fast

fCCI4 xesbml:mlc. 11x:llJE!:bv bK DDt lim:tal "tD a Jt:1lrfilld's, anger ~~

Waaly1• ar lt:JJ' JliW;a, (W) m !I'M ata"'''V ~. ercept far a ffte-- . -sta11:1nQ ¥:aco-ctzlw-m mtacazwJt N:dch. s.c ba1:n§ cpen.S *Ue a~.

~1, Sml Cll' lcdglt l8 lcc:atC 8111 ~ CD 128 pNiiiiitty b=e:iD canveye:i.

am~ ( ivl Ja CJtiB:' "c.e DDt ';e!llitted by ali' tcr pl;m adopted (~ now . .

6 -- ~-

08/09/9$ 15:40 'U~U4lG#~JI.;,

JU:.. z:t '95 15:11 LIFttte... .~ v~

-QMCII :a~. DA.:ra&. Q& CM.U. rs & A&..&.EM P.C. :..~·-~"~ u..ltf:S

. -s-

~ lbl1l be ~ ar cperated upcm tbe Pf\14WlY bazein ~ . . or cv PQftim thereof. ~ reStrictic:ID shall anly ~~~PlY fer so J.cq: as any . . partic:ID at tbe ree'n'J'V Jiitqmty CMB1 ar a. sartt at me fnst pet 1s

be.iJV used as a factory Oltlet d/or dJS' uw:rt ft'ta:ll staxes. 'Dpcft tbe

. . . " ~ ~ at 1:t. fist: pll't a:rw WftS an! ayz s (i} Mot to eell any

~ pottiCD of tr. Pl'epel ty tGicb it a=;aiNd fzm Jb!ial oall:l . . ~ CUiPQ&'&tiea\ 1=- uee as a mt:el6 botel, iml ozt lcd;itV basiness en-

smile facl:lity. (11) U)t to al.lclf -v ~ P't:lcD af tbe pn:ptilf

cons~~~ IllS ai. JIDbtl. ~· tara oz- lcdg'~ hsj.m:ss or similar

:aci~ty, IDS (111) 'ttat DO SID 1~111 fac:1l1ty ar l:IQsinsT sball be

allaed 1:0 CJPiil1lC& azr exiSt 11itbia. tt. ll ,.,._ ot ·iota :r iD:iJV pGpbi tt.

1.'!a:1s ftGtrictiaa 5ball anly awJ.y · fC2' so Jar.v as 1:be ptqetey harem cameyal .

to t:he ~ ot ~ WCibQ4 ~ !8 twWJg ma:~ • a IDtel. w, sm ~

.... far 1981 aba1l be pa:wat:Bd - af the dare at de11wzy af tbW . .,_

7 -7-

.. J'LL Z? '95 15:12 ~-·~ VILU=IGE

&001 160 rACE .');; =.

&,A1J OffiCII AU.D&. OM.'TQII.

JIATDIL Cdwu. s:ms &. A&&.~H. f.C.

•..o.aa.t8Ddg

-naaoiQ 'AlOMA UIIIIW4at

.._... STATE or ~~~-......-·p;;~~: --Clft/Cdlll'l.T ,. -.a..·-=· •. -..... -----

._ .,._ oa ·s szs go

C11¥ 1'a 11,4 17S,QO

t'Nulllr 111 ~.oo

P 'ine 801 ... .,.. awt.., 1.-.1 'fa-

20.00 175.00

lZ$ 00

~ $ 1QZ1.QQ

»-1. ... .JriQ_ ,.....az._

_.._

Villbda: Ia .. CJak•• omc. aldie ~Qutoft.a.,rtlW~aat •

5;Q4 , ••• I My §. ,_,,,

11da 11lMtaa-wid& •&IA:Iuc of .,; ll'las'r-'AP LllrfrnitRd -.--a.lmdi&ciM .... iaJ1111 .. .... 5LJ...aia1MIIDGIII&flf

s 35ft QO .... ,...

"-.· .. ·

) 1la"'.. . •

ft.YlZ: ,.. - :1' "" / a.

8 i'-

VIRGINIA:

IN THE CIRCUIT COURT FOR THE CITY OF WAYNESBORO:

WAYNESBORO VILLAGE, L.L.C.,

v. BMC PROPERTIES, a Virginia

General Partnership

BANK OF ESSEX, a Virginia Corporation

ALEXANDER F. DILLARD, JR., TRUSTEE EARL R. JOHNSTON, TRUSTEE,

DEMURRER

PLAINTIFF

Chancery No. 820CH95000143-00

DEFENDANTS

Defendants, Bank of Essex (Essex) and Alexander F.

Dillard, Jr. and Earl R. Johnston (Trustees), by counsel, demur

to the Bill of Complaint in this declaratory judgment suit and

say that it is not sufficient in law or chancery and ought not

to be prosecuted on the following grounds:

1. Plaintiff does not allege in the Bill of Complaint it

plans to use its property for lodging purposes nor does

plaintiff allege it has been contacted by an individual or

other entity interested in purchasing plaintiff's real estate

for lodging purposes, and, hence there is no alleged

justiciable controversy between Plaintiff and defendants which

would give rise to a declaratory judgment suit.

2. The restrictive covenant set forth in the Bill of

complaint which prohibits the owner of plaintiff's land from

using same for lodging and related purposes so long as defen-

dant BMC Properties (BMC) uses its land for like purposes (BMC

has expended large sums and executed extensive plans

9 Jl./.-

preparatory to using its land for like purposes) is one which

runs with the title to both the dominant and subservient

tracts, and hence as a matter of law no actual controversy

between the parties exists.

ANSWER

For their Answer to the Bill of Complaint exhibited

against them, Essex and Trustees state the following:

1. The applicable provisions of the Code of Virginia are

set forth inS 8.01-184, et seq., not§ 8.01-814 et seq.

2. They admit all allegations set forth in paragraphs 2,3

and 4 of the Bill of Complaint.

3. T~ey neither admit nor deny the allegations set forth

in paragraph 5 of the Bill of Complaint and demand strict proof

of same.

4. They admit the allegations set forth in paragraphs 6


5. They neither admit nor de~y the allegations set forth

in paragraph 8 of the Bill of the Complaint and demand strict

proof of same.

6. They admit the allegations set forth in paragraph 9 of

the Bill of Complaint.

7. They deny the allegations set forth in paragraph 10 of

the Bill of Complaint.

- 2- 10

- tS'-

8. They are unaware of plaintiff's intentions concerning

sale of its property for lodging and related purposes, but

allege that such proposed use would violate the Restriction

which is binding upon the lands of the plaintiff and defendant

BMC, contrary to the allegations of Plaintiff in paragraph 11

of the Bill of Complaint.

9. They neither admit nor deny the allegations set forth

in paragraph 12 of the Bill of Complaint.

10. They deny all allegations set forth in paragraphs 13


WHEREFORE, they pray that the Court refuse to take

jurisdiction of the proceeding, or that the Court determines

the applicable Restriction to be binding upon the plaintiff in

the use of its land so as not to diminish the value of Essex's

security interest in the land belonging to BMC.

scot A. Katona Dillard and Katona, p.d. P. o. Box 356 Prince and Cross Streets Tappahannock, VA 22560 (804) 443-3368

BANK OF ESSEX EARL R. JOHNSTON, TRUSTEE ALEXANDER F. DILLARD, JR.,

TRUSTEE

B j,-* A . K.tM,___ Y------~~~----~---------Of Counsel

-3- 11

- I~-

CERTIFICATE

The undersigned, Scot A. Katona, counsel for Bank of

Essex, Earl R. Johnston and Alexander F. Dillard, Jr., Trust-

ees, certifies that copies of the foregoing Demurrer and Answer

were this day mailed to Victor v. Ludwig, Esquire," Counsel for

the Plaintiff, and to BMC Properties, c/o John A. Conrad,

Esquire, at the addresses set forth in the Bill of Complaint.

Given under my hand this H~ day of January, 1996.

Scot A. Katona

-4- 12 - 17-

VIRGINIA:

IN THE CIRCUIT COURT FOR TilE CITY OF WAYNESBORO Chancery Division

WAYNESBORO VILLAGE, L.LC.,

Plaintiff,

v.

BMC PROPERTIES, and BANK OF ESSEX and ALEXANDER F. DILLARD, JR.,

TRUSTEE and EARL R. JOHNSON, TRUSTEE

Defendants.

) ) ) ) ) Case No.: CH95-143 ) ) ) ) ) ) ) ) ) ) )

DEMURRER

Comes now BMC Properties, a Virginia general partnership, by counse~ and

demurs to the allegations contained in the Bill of Complaint on the following grounds:

1. In its Bill of Complaint, the plaintiff does not allege that it has ·a contract

to sell the remaining· portion of the property for use as a motel, hotel, inn or lodging

business or similar facility, or that it plans such use of the property and, thus, no present,

actual controversy exists.

2. Moreover, the covenants contained in the June 20, 1989 Deed and

applicable to the title held by Shenandoah Village Associates as well as BMC Properties

are expressly intended to create a servitude and burden upon succeeding parties in

interest so long as the proposed uses of property are maintained and, thus, these

covenants run with the title of that land as a matter of law.

WHEREFORE, as a matter of law, no actual controversy exists between the

parties and the undersigned moves this Court to dismiss this claim.

ANSWER

1. The applicable provisions of the Virginia Code are set forth in § 8.01-184.

2. The allegations contained in paragraphs 2, 3 and 4 of the Bill of Complaint

are admitted.

3. These defendants have insufficient knowledge and/or information to admit

or deny the allegations contained in the paragraph numbered 5.

4. In response to the allegations contained in paragraph 6, these defendants

state that Exhibit A appears to be an accurate copy of the Deed recorded in Deed Book

160, page 517, but these defendants reserve the right to introduce additional evidence if

necessary to correct this document.

5. The allegations of paragraph 7 are admitted.

6. These defendants have insufficient knowledge and/ or information to admit

or deny the allegations contained in the paragraph numbered 8 and call for stri~ proof.

7. In response to the allegations contained in paragraph 9, these defendants

say that BMC Properties certainly is affected by the restrictions, but it has no knowledge

as to whether or not WV Property is affected by the restrictions.

8. The allegations contained in the paragraphs numbered 10, 11, 13 and 14

are denied.

2

1~

-1'1-

9. In response to the allegations contained in paragraph 12, this defendant

has insufficient knowledge and/ or information to admit or deny this allegation and, . thus,

call for strict proof thereof.

10. Moreover, this defendant affirmatively alleges that it paid money for the

four acres in question and spent additional time and money to develop this property as a

motel in reliance upon the covenant agreed to by the party of the first part and the

plaintiff, as its successor in interest, is estopped from changing its position.

CROSS-BILL

Comes now the defendant, BMC Properties, by counsel, and for its Cross-Bill


1. As a pait of the consideration for the purchase of the four acres

represented in the Deed dated June 20, 1989, referred to as Exhibit A in the plaintiff's

Motion for Judgment, BMC Properties obtained a covenant from Shenandoah Village

Associates, L.P ., which is referred to on page three of the Deed in the paragraph that

begins "The party of the first part covenants and agrees ... ".

2.- In fact, there were mutual covenants exchanged by Shenandoah Village

Associates and BMC Properties as a part of the consideration in this transaction.

3. As a part of that consideration, it was intended that these covenants would

run with the title of the parcels of real estate owned by Shenandoah Village Associates

as well as BMC Properties in order to protect their use and value.

4. To interpret the intent of the parties to be otherwise would constitute the

covenants of no effect and value whatsoever.

3

15

- .J...a-

5. The parcel in question in this Deed, dated June 20, 1989, and containing

four acres is intended to be used by BMC Properties as the site for a second motel.

WHEREFORE, BMC Properties requests this Court to confirm the original

interpretation intended by the parties and if this Court renders any decree or judgment

pertaining to the efficacy of these covenants or the intent of the parties, then BMC

Properties moves this Court to declare its judgment and/ or enter a decree declaring the

interpretation and/or intent of both covenants, the covenant applicable to the party of

the second party, BMC, beginning at the bottom of page 2 of the Deed, as well as the

covenant applicable to the party of the first part, Waynesboro Village and/ or its

successors, including the plaintiff in this case.

John Conrad SAND , ANDERSON, MARKS & MILLER P. 0. B ~ 1998 Richmo d, VA 23218-1998

4

BMC PROPERTIES,

By Counsel

16 -~1-

CERTIFICATE

I hereby certify that a true copy of the foregoing was mailed, postage prepaid, to

Victor V. Ludwig, Esq., P. 0. Box 1287, Staunton, Virginia 24402-1287 and to Scot A.

Katona, Esq., Dillard and Katona, P. 0. Box 356, Tappahannock, Virgi · this

the 1.4''"day of .f~ , 1995.

f

5 17

McPHERSON,

& SANTOS. LC.

"EYSATLAW

ON VIRGINIA

402·1287

VIRGINIA: IN THE CIRCUIT COURT OF THE CITY OF WAYNESBORO

WAYNESBORO VILLAGE, L.L.C Plaintiff

v.

BMC PROPERTIES, ET AL. Defendants

) ) ) ) ) ) )

ANSWER TO CROSS-BILL CH95000143-00

Comes now the plaintiff, Waynesboro Villaqe, L.L.C. (Waynes

boro Village), by counsel, and, in response to the cross-bill

filed against it by BMC Properties (BMC), respectfully represents

as follows:

1. Waynesboro Village admits that the provision to which BMC

refers is contained in the deed described in Paragraph 1 of the

cross-bill (indeed, that is the very provision which is the

subject of the action filed by Waynesboro Village), but it denies

the balance of the allegations contained in Para9raph ~ of the

cross-bill.

2. Waynesboro Village admits that there is a restriction,

similar to the Restriction described in the bill of complaint,

which affects the use of the WV Property (as described in the bill

of complaint), but it denies the other allegations contained in

Paragraph 2 of the cross-bill.

3. Waynesboro Village denies the allegations contained in

Paragraph 3 of the cross-bill.

4. The matter contained in Paragraph 4 of the cross-bill is

a conclusion of law and requires no response by Waynesboro

Village, but Waynesboro Village disagrees with the conclusion of

law.

18

- ~ lf.-

EASON, TOS.LC.

TLAW

~GIN lA

7

5. Waynesboro Village is without sufficient knowledge to

admit or deny the allegations cont~ined in Paragraph 5 of the

cross-bill, but avers that, to the best of its knowledge and

belief, the BMC Property (defined in the bill of complaint) is not

now "being used as a motel, hotel, inn or lodging business or

similar facility," as the Restriction contemplates.

WHEREFORE, Waynesboro Village prays that the cross-bill be

dismissed and that it be awarded its costs and attorney's fees.

Victor v. Ludwig

WAYNE~ V~LLAGE, L.L.C.

BY~ 1_...__...__ Of counsel

Nelson, McPherson, Summers & Santos P. o. Box 1287 Staunton, Virginia 24402-1287

CERTIFICATE

I hereby certify that a true and correct copy of the

foregoing answer was mailed to scot A. Katona, Esquire, Dillard

and Katona, P.D., P. o. Box 356, Prince and Cross Streets,

Tappahannock, Virginia 22560, and John A. Conrad, Esquire, Sands,

Anderson, Marks & Miller, P. o. Box 1998, Richmond, Virginia

23218-1998, this 13th day of February, 1996.

-----J~- l Victor v. Ludwig

c:\clients\j-k-1\lt.ans

19

- .:l s--

VIRGINIA: IN Tim CIRCUIT COURT FOR Tim CITY OF WAYNESBORO

WAYNESBORO VILLAGE, L.L.C., Plaintiff

v.

BMC PROPERTIES, and BANK OF ESSEX, and ALEXANDER F. Dll..LARD., JR., TRUSTEE, and EARL R. JOHNSON, TRUSTEE,

Defendants

Case No. CH95-143

MOTION FOR SUMMARY JUDGMENT

Defendant, BMC Properties, by counsel, pursuant to Rule 3:18 of the Supreme Court of

Virginia, moves for summary judgment against Plaintiff, Waynesboro Village, L.L.C., on the

grounds as follows:

The covenants contained in the June 20, 1989 deed and applicable to the title held by

Shenandoah Village Associates, predecessors in title to Waynesboro Village, L.L.C., as well as

BMC Properties are expressly intended to create a servitude and burden upon their respective

properties so long as the proposed uses of the properties are maintained and, thus, covenants

contained in said deed run with the title of the respective lands as a matter of law.

WHEREFORE, Defendant, BMC Properties, pray that they have summary judgment

against Plaintiff by dismissal of this case and that they be awarded their costs expended in this

action.

Respectfully submitted,

BMC PROPERTIES By Counsel

2.0

Charles L. Ricketts, m Allen & Carwile, P.C. P. 0. Drawer 1558 Waynesboro, Virginia 22980 (540) 943-8200

Certificate of Mailing

I certify that a true and accurate copy of the foregoing Motion for Summary Judgment was mailed to Victor V. Ludwig, representing Waynesboro Village, L.L.C., Nelson, McPherson, Summers & Santos, P. 0. Box 1287, Staunton, Virginia 24402-1287 and Scot A. Katonii, Esquire, Dillard and Katona, P. 0. Box 356, Tapp , ir · 22560 on this the I 0 ({_ day of ([,1: l .J. ' 1996.

VIRGINIA: IN THE CffiCUIT COURT FOR THE CITY OF WAYNESBORO

WAYNESBORO VILLAGE, L.L.C., Plaintiff

v.

BMC PROPERTIES, et al., Defendants.

DEFENDANT'S BRIEF IN

CH95000 143-00

SUPPORT OF MOTION FOR SUMMARY JUDGMENT

For its Brief in Support of its Motion for Summary Judgment, the Defendant


FACTS

On or about D~cember 21, 1995, Plaintiff filed a Bill of Complaint in this court

seeking declaratory judgment in order to interpret the meaning of a restrictive

covenant contained in a certain deed.

The Plaintiff in this action, Waynesboro Village, L.L.C. (hereinafter 'W.V."),

is the successor in title to Shenandoah Village Associates, L.P. (hereinafter "S.V .A").

S.V .A. was the original developer of a retail shopping mall· lm.own as

Shenandoah Village. On June 20, 1989, S.V .A. sold a four acre out-parcel fronting

on Route 340 at or near its intersection with Interstate 64 to the Defendants, BMC

Properties (hereinafter ''BMC"). By deed dated June 20, 1989, S.V .A. conveyed title

to the four acre parcel to BMC which was recorded in the Clerk's Office in Deed book

160, page 517:

Title to the one hundred thirty-five acre parcel was transferred by S.V.A to

W.V. by deed dated October 28, 1994, recorded in the Clerk's Office in Deed Book

210, page 115.

Included in the language of the deed by which S.V.A. conveyed title to the land

sold to BMC were reciprocal covenants which exp~essly restricted or prohibited

certain uses of the four acres purchased by BMC and the property retained by S.V.A.

The restrictive covenant cited by the Plaintiff in paragraph six of its Complaint

states as follows:

The parties of the first part (S.V .A) covenants and Sgrees (i) not to sell any remaining portion of the property which it acquired from Royal Oaks Investment Corporation for the use as a motel, hotel, inn or lodging business or similar facility, (ii) not to allow any remaining portion of the property which it acquired from Royal Oaks Investment Corporation to be used, constructed or improved as a motel, hotel, inn, or lodging business of similar facility, and (iii) that no such lodging facility or business shall be allowed to operate or exist within the boundaries of its remaining property. This restriction sball apply for so long as the property herein conveyed to the party of the second part is being used as a motel, hotel, inn or lodging business of a similar facility. Upon discontinuance of such use, this restriction shall expire.

Also included in this deed is a reciprocal negative easement expressly

restricting the use by BMC of its four acres:

The party of the second part covenants and agrees (i) no factory outlet or discount retail stores or gas station, (ii) no drive-in or fast food restaurant, including but not limited to a McDonald's, Burger King, Wendy's or Roy Rogers, (iii) no free standing restaurant except a free standing non-drive-in restaurant which is being operated while a motel, hotel, inn or lodge is located or operated on the property herein conveyed, and (iv) no other use not permitted by any master plan adopted (whether now existing or hereafter adopted) and any amendments thereto by the City of Waynesboro shall be constructed or operated on the property herein conveyed or any portion thereof. This restriction shall only apply for so long as any portion of the remaining property owned by the party of the first part is being used as a factory outlet and/or discount retail stores. Upon discontinue of such use, this restriction shall expire.

The deed in question is attached as Exhibit "An to Plaintiff's Bill of Complaint.

2

23 - 32.-

Attached as Defendant's Exhibit "A" is the "Agreement for Purchase and Sale of Real

Estate" entered into by BMC and S.V .A., which ~ been incorporated into the

Defendant's Response to Interrogatories.

Pursuant to Section 4(b) of this Agreement, S.V .A. agreed to the covenant

which was ultimately incorporated in the deed and applicable to the remaining

property owned by it, and, pursuant to Section 14, BMC agreed to the covenant

applicable to the four acres.

· In addition, as indicated in the Defendant's Responses to Interrogatories,

Interrogatory No.4:

BMC spent $350,000 to purchase the land in question. BMC has incurred interest expense and other debt and service expenses in financing a portion of this case.

BMC has spent at least $93,863 on surveyors, architects, soil engineers, attorneys and engineers in p]annjng and preparing the site for construction of a motel.

... BMC has spent considerable time and BMC has incurred additional expenses (e.g., $5,611 in legal expenses) in order to secure a loan in the amount of $418,000 in order to finance the cost of a~quisition of this parcel as a motel as well as a loan in the amount of $1,000,860 for the cost of constructing a motel on this four acre parcel.

Moreover, as indicated in BMC's answer to Interrogatory No.8:

BMC's business is the ownership, development and operation of lodging facilities. BMC currently plans to develop the four acre parcel as a motel with a restaurant as allowed by the restrictive covenants.

In addition, it should be noted that BMC owns and operates the Comfort Inn,

a seventy-five unit motel, as well as the General ~ayne Inn, a twenty-five unit

3 24

33-

property, which are located approximately three miles from the four acre parcel in

question.

LEGAL ARGUMENT

There is no doubt that restrictions against the commercial use of land such as

the reciprocal restrictions expressly prohibiting certain commercial uses of the two

parcels in question are reasonable and enforceable. Duvall v. Ford Leasing. 220 Va.

36 (1979), and Net Realty Holding Trust v. Franconia Properties. Inc .• 544 F. Supp.

759 (1982), (copies attached).

At the time that these provisions were agreed to in the contract and

incorporated in the original deed, there was no lodging facility nor were there fast

food restaurant or gas station facilities physically in existence on either property, but

it was clearly the intent of both parties to establish a plan of development in which

a lodging facility would be developed only on the four acre parcel and factory outlet,

discount retail stores, gas station and fast food restaunmt facilities would be

developed only on the remaining acreage.

There has been no change of circumstances which would warrant changing the

clear agreement and inten~ of the original parties. BMC has expended $350,000 to

purchase this land, which value was due in part to this plan of development agreed

to by S.V .A. and BMC. BMC has also expended almost $100,000 in the preparation

for the development of the property as a motel.

Because the restrictive covenants were reciprocal and part of the development

plan of the entire tract of land owned by S.V .A and BMC, they are the type of

4 Z5

- 3 ct.-

restrictive covenants which normally run with the land. The original intent of the

covenants in question are not merely for the benefit o~ BMC, but were part of a plan

of development for the entire tract, that there would be a motel developed only on

this four acre out-parcel, and factory outlet, discount retail stores, gas stations and

fast food restaurant facilities developed only on the remaining property.

Moreover, even a personal covenant restricting the use of land for the benefit

for one particular party is binding upon a successor in interest, such W.V.:

... One is bound by such a personal restrictive covenant even though it does not run with the land if he takes it with the knowledge of its existence, even though the deed to him does not recite the restriction.

This principle is clearly announced in 26 C.J .S., ''Deeds", Section 167, page 54 7,

where it is stated:

... So, regardless of whether a covenarit not to use the land for certain purposes runs with the land, a court of equity will, nevertheless, enforce it against a grantee taking title through a deed reciting the covenant and subject thereto, or against a grantee taking title with full knowledge of its existence, although it be omitted from his deed. ...

See Oliver v. Hewitt. 194 Va. 167 (1950), (copy attached).

In the Oliver case, although it was not shown that the lessee of the premises

had actual knowledge of a covenant, it did appear that through recordation of the

deed, he had constructive notice. " ... Under these facts, in equity, the restrictive

personal covenant limits the use to which either or both may put the lots in

question." See Hewitt. supra., at p. 168 .

... Every owner of real property has the right so to deal with it as to restrain its use by his grantees within such limits as to prevent its appropriation to purposes which will impair the value or

5

ZG - 3S-

diminish the pleasure or the enjoyment of the land which he retains. The only restriction on this right is, that it shall be exercised reasonably, with a due regard to public safety and without creating any unlawful restraint of trade. ·

In Carneal v. Kendig, 196 Va. 605 (1955), (copy attached) the Supreme Court

upheld a restrictive covenant prohibiting the operation of a motion picture business

inside the existing hotel. The Court noted as follows:

... Restrictions on use of land are not favored at law, but, where the intention of the parties is clear in their creation, they are confined within reasonable bounds and are not against public policy, they will be upheld.

Carneal v. Kendig, 196 Va. 605, 613 (1955).

Moreover, the mere lapse of time, unaccompanied by circumstances affording

evidence of a presumption that the right has not been abandoned, does not constitute

latches. Riordan v.·Hale, 215 Va. 638 (1975), and Hening v. Mavnard, 227 Va. 113,

313 S.E. 2d. 379 (1984), (copies attached).

In the present case, there is no material fact in dispute. The language as well

as the intent of the reciprocal easements expressly prohibiting certain uses on these

contiguous parcels is undisputed. Since it was the intent to protect the interest of

S.V .A. and BMC in developing their respective properties as a motel and since BMC

paid $350,000 for the parcel and since then almost $100,000 to develop the parcel as

a motel, its interest should be protected pursuant to the terms of the covenants.

WHEREFORE, Defendant respectfully requests that summary judgment be

entered declaring that the covenants in question contained in the above-described

deed are valid, enforceable and binding on the parties herein respectively.

6

27 - 3(,-

Charles L. Ricketts, ill Allen & Carwile, P.C. P. 0. Drawer 1558 VVaynesboro,\'i~a 22980 (540) 943-8200

BMC PROPERTIES By Counsel

CERTIFICATE OF MAILING

I hereby certify that a true and accurate copy of the foregoing Defendant's Brief in Support of Motion for Summary Judgment was mailed to \'ictor \'. Ludwig, Esquire, Nelson, McPherson, Summers and Santos, P. 0. Box 1287, Staunton, \'irginia 22402-1287 and Scot A. Katona, Esquire, Dillard and Katona, P.D.,_P~ Q. Box 356, Prince and Cross Streets, Tappahannock, v· . . a 22560 on this ~ day of August, 1996.

c

7

Z8 - 37-

VIRGINIA:

IN THE CIRCUIT COURT OF THE CITY OF WAYNESBORO

WAYNESBORO VILLAGE, L.L.C. I ) )

Plaintiff, ) )

v. ) CH95000143-00 )

BMC PROPERTIES, et al., ) )

Defendants. )

RESPONSES TO INTERROGATORIES

COMES NOW the defendant, BMC Properties, by counsel and for

its answers to Plaintiff's First Interrogatories, states as

follows:

1. Please identify the lawyer who or law firm which

represented BMC in the purchase of the property described in the

Deed.

ANSWER: John A. Conrad, Sands, Anderson, Marks & Miller .•

2. Please identify and describe in detail the contract

between BMC and SVA which resulted in BMC's purchase of the BMC

Property, including, but not limited to:

a. the date of the contract

b. the identity of the individual or individuals who

negotiated the contract;

SVA).

c. the terms of the contract

ANSWEB:

a. Ma~ 11, 1989.

b. John A. Conrad (for BMC) and Marvin J. Hyman (for

c. See attached copy of contract.

29 - 3~-

.~-~·_._PLAINTIFF'S · .. , :~·-.. EXHIB"" . :-·A .. .. ..~~·. .. .....

• 0 .:..--

3. Please describe each and every contact which any

representative of BMC had with any agent of SVA prior to the

consummation of the contract described in Interrogatory 2, and

please identify the agents involved in such contacts.

ANSWER: John A. Conrad contacted Charles E. Bloom of SVA by

phone in November of 1988 in order to express an interest in

purchasing the land. On April 20 of 1989 a written agreement for

the purchase of real estate was forwarded to Mr. Hyman by Mr.

Conrad and responded to by Mr. Marvin J. Hyman on April 28, 1989.

Mr. Hyman responded on April 2~ with a revised draft of the

agreement. There was a third draft forwarded by Mr. Hyman on May

s, 1989 and a fourth draft on May 5, 1989 and a sixth draft

forwarded by Mr. Hyman on May 8, 1989 and the agreement was

signed on May 11, 1989.

4. Please describe in detail the "additional time and

money [which BMC has spent] to develop [the BMC Property] as a

motel" as alleged in Paragraph 10 of your answer.

ANSWEB: BMC spent $350,000 to purchase the land in

question. BMC has incurred interest expense and other debt

service expenses in financing a portion of this cost.

BMC has spent at least $93,863.00 on surveyors, architects,

soil engineers, attorneys, and engineers in planning and

preparing the site for construction of a motel.

John conrad of BMC has spent considerable time and BMC has

incurred additional expenses (e.g. $5,611.00 in legal expenses)

in order to secure a loan in the amount of $418,000.00 in order

2

30 -39-

to finance the cost of acquisition of this parcel and the

development costs for the development of this parcel as a motel

as well as a loan in the amount of $1,86o;ooo.oo for the costs of

constructing a motel on this four acre parcel.

5. Please describe in detail any knowledge that SVA had

concerning the "additional time and money (which BMC has spent]

to develop (the BMC Property] as a motel" as alleged in Par_agraph

10 of your answer and describe the method by which SVA would have

obtained such knowledge.

ANSWER: BMC has no knowledge of any knowledge that SVA has

concerning the time and money which BMC has spent to develop the

property in question as a motel.

6. Please describe in detail any knowledqe that Waynesboro

Village had concerning the "additional time and money [which BMC

has spent] to develop [the BMC Property] as a motel1' as alleged

in Paragraph 10 of your answer and describe the method by which

SVA would have obtained such knowledqe.

ANSWER: BMC has no knowledge of any knowledqe that

Waynesboro Village has concerning the time and money which BMC

has spent to develop the property in question as a motel.

7. Please describe in detail any motel, hotel, inn, or

lodging business or similar facility is currently located on the

BMC Property.

ANSWER: The business of BMC properties, the owner of the

property, is the lodging business, but there is no lodging

facility currently located on the property in question. ·.

3

31.

- l..{..t; -

a. Please describe in detail any and all plans which BMC

currently has for the use of the BMC Property for any motel,

hotel, inn, or lodging business or similar facility

(collectively, a Lodging Facility), including, but not limited

to:

a. any and all contacts with third parties for the

location of a Lodging Facility on the BMC Property and the

identity of such third parties;

b. any and all contacts with any architects for the

development of plans or specifications for the construction of a

Lodging Facility and the identities of such architects;

c. any and all contacts with building contractors for

the construction of a Lodging Facility (including, but not

limited to any requests for bids, estimates, or contracts for

construction or site preparation) and the identities of such

contractors.

AHSWER: BMC's business is the ownership, development and

operation of lodging facilities. BMC currently plans to develop

the four acre parcel as a motel with a restaurant as allowed by

the restrictive covenants.

a. BMC has worked with its architect, engineers and

soil engineers and banks in order to develop plans for the

construction of a lodging facility:

Balmer Architectural Group Phoenix, Arizona

J. Terry cox, Architect Richmond, Virginia

4

3Z

- <t 1-

Lanna Dunlap & Spriggs, Engineers Richmond, Virginia

Bob Sayer, Soil Engineer Richmond, Virginia

sands, Anderson, Marks & Miller, law firm Richmond, Virginia

Jack Roberson Bank of Essex Tappahannock, Virginia

b. See answer to 8 (a).

c. BMC acts as its own general contractor.

9. Please describe the earliest date by which you project

that a Lodging Facility will be constructed on the BMC Property.

ANSWEB: A specific date has not been determined.

10. Please describe all facts on which you base your

assertion in Paragraph 3 of your cross-bill that 11it was intended

that these covenants would run with the title of the parcels of

the real estate owned by Shenandoah Village Associates as well as

BMC Properties in order to protect their use and value."

ANSWER: In the June 20, 1989 deed signed by Shenandoah

Village Associates, L.P., it ••• "covenants and agrees:

(i) not to ~ any remaining portion of the property

.•• for use as a motel, ••• [etc.],

(ii) not to allow any remaining portions of the

property to be used, constructed or improved as a motel, •

• • (etc.], and

5

33 - LJ2 ___.

(iii) that no such lodging facility or business shall

be allowed to operate or exist within the boundaries of its

remaining property." (Emphasis added.) ·

The language of the deed provides that it shall "apply for

so long as the property ••• is being used as a motel, ••• "

By the language used, it is clear that SVA intended and

agreed that these restrictions would survive its ownership of its

property. The fact that SVA intended and agreed that these

restrictions should run with the title of its remaining property

is further evidenced by the fact that these covenants were

incorporated into SVA's deed which it signed and recorded in the

Circuit Court's records in order to provide notice to all future

potential purchasers of the land.

11. Please identify each person you expect to call as an

expert witness at trial and state the basis of such witness' area

of expertise and education, background and credentials in such

area of expertise, state the basis of each expert's opinion

including the grounds for each opinion, and identify all

documents pertaining to each such opinion.

ANSWER: None.

12. Please identify the person answering these

interrogatories on behalf of BMC.

ANSWEB: John A. Conrad.

6

BMC PROPERTIES,

By Counsel

John A. Coniad SANDS, ANDE SON, MARKS & MILLER P. o. Box 1 98 Richmond, V rqinia 23218-1998

CERTIPICATB


foregoing was mailed postage, fully prepaid, to all counsel of

record, on this l ( i\, day of March, 1996.

7

35

8LOM19 • 'ar. .nt 01

AGREEMENT FOR THE PURCHASE AND SALE OF

REAL ESTATE

A. INTRODUCTION. This is an Agreement made by and

between SHENANDOAH VILLAGE ASSOCIATES, L.P., havinq an

address at 103 Eisenhower Parkway, Roseland, New Jersey

07068 (the "Seller") and BMC PROPERTIES, havinq an address

at c/o John A. Conrad, Esq., Sands, Anderson, Marks '

Miller, 801 East Main Street, Richmond, Virginia 23216 (the

•purchaser•), the provisions of which are as follows:

B. RECITALS.

1. The Seller is the owner of certain real

estate located in Wa~esboro, Virq.:ia and generally known

aS Shenandoah Villaqe~~ow.~~·('

2. The Seller desires to sell to the. Purchaser

and the Purchaser desires to purchase from the Seller that

portion of the Shenandoah Village property indicated on the

attached pla~ consisting of fou~ (4) acres (the •Parcel•).

C. AGREEMENT. In consideration of the agreements,

promises , covenants and c·ondi tiona set forth herein, the

parties hereto agree as followss

1. Price and Pinancial Ter.ma. The Seller aqrees

to sell the Parcel to the Purchaser and the Purchaser agrees

to buy the Parcel from the Seller at the purchase price of

Th:ee Hundred Pifty Thousand ($350,000) Dollars in cash to

be paid at Settlement.

36 •

- ._J._s--

__ _, ........ .,. ... .

2. Deposit. The Purchaser has deposited with

the Seller's aqent, Barnwell ' Jones, the sum of Twenty Five

Thousand ($25,000) Dollars as ·an earnest money deposit which

shall be neqotiated only upon execution of this Aqreement by

Seller and Purchaser, held in trust by Barnwell ' Jones, and

shall be applied as a credit toward the purchase price at

Settlement. Should the transaction contemplated by this

Aqreement not close for any reason except default hereunder

on the part of the Purchaser, all amounts paid pursuant to

this paraqraph shall be immediately refunded to the Purchas

er by the Seller.

3. Settlement. The Settlement shall be located

at the General Wayne Inn or at Barnwell ' Jones on July 1,

1989, of which time shall be of the essence with respect to

PUrchaser's obligations hereunder. At the Settlement, the

Seller shall deliver to Purchaser a General Warranty Deed

with Enqlish Covenants of title prepared at the expense of

the Seller conveying th• •~eel to Purchaser free and clear·

of all encumbrances, tenancies and liens, but subject to the

applicable restrictive covenants specified in this Aqree

ment. The Purchaser shall pay for all other closing costs

in connection with the purchase and sale of the Parcel with

the exception of the Grantors Tax which shall be paid for by

the Seller, the survey referred to in paraqraph 4 (b) and

Seller's attorneys~ fees.

Hotwithstandinq any other provisions of this

Aqreement, whether express or implied, if Seller shall be

37 • 2.

BLOM19· · ........ c!nt.Ol

unable to convey the Parcel in accordance with the terms of

this Aqreement, then the sole obligation and liability of

Seller shall be to refund to Purchaser the payment made on

the signing of this Aqreement. Upon the makinq of such

refund and reimbursement, this Aqreement shall be deemed

cancelled and this Agreement, and any interest of Purchaser

in the Parcel, shall cease and terminate, and neither party

shall have any further claim aqainst the other by reason of

this Agreement. Seller may take any measures of any kind

(including the commencement of any action or proceeding~,

and shall be entitled to adjourn the date of Settlement

hereunder for a period up to thirty (30) days, in order to

render the title to the Parcel marketable or otherwise to

convey title in accordance with the term. of this Aqreement,

but. Seller shall not be required so to do or to incur any

expense or obligation lD respect thereof. PUrchaser may

(but shall not be required), accept such title as Sellar may .

be able to convey, without reduction of the purchase price

or any credit or allowance aqainst the purchase price and

without any liability on the part of Seller. The acceptance

of a deed by Purchaser shall be deemed to be a full perfor

mance and discharge of every agreement and obligation on the

part of.Seller to be performed under this Agreement. Unless

specifically stated to surviv• th• delivery of ~he deed, no

aqreement made hereunder shall survive the delivery of the

deed.

38 •

-<1-1- 3.

BLOM19:Aqr~ JDt 01

4. Conditions Precedent: All obligations of the

Purchaser are subject to the fulfillment prior thereto of

the followinq conditions precedent:

(a) The Purchaser shall obtain legal title

to the Parcel as described in paraqraph 3.

(b) Seller aqrees to pt:ovide to Purchaser,

at Seller's expense, a survey of the boundaries of the

Parcel, which boundaries shall be acceptable and agreed to

by the Seller and the Purchaser.

(c) The Purchaser shall obtain, at its

expense, a qeotechnical survey of the subterranean soil,

minerals and rock of the Parcel, which survey shall be

acceptable to the Purchaser.

(d) Provided Seller receives the. requisite

consent from ita mortgagee, Seller agrees and covenants not

to sell or allow any other portion of ita remaininq~~operty . ~~k&~~,.,

(generally known •• Shenandoah Villaq~ to he us d, con-

structed or improved aa a motel, hotel, inn or lodqinq

businesa or similar facility and further agrees that no such

lodgin9 facility or business shall be allowed to operate or

exia~ within the boundaries of ita remaininq property at any

time except on the Parcel. Seller further agrees that this

agreement and covenant shall be incorporated as a restric

tive covenant to apply against the remaining property

currently owned by the Seller. but such restriction shall

only apply for ·~ lonq as the Parcel is being used as a

motel, hotel, inn or lodqing business or similar facility,

39 • 4.

- l/.Y-..

and upon the discontinuance of such use, such restriction

shall thereupon expire. If such consent is not obtained

from Seller's mortqaqee (and Seller shall not be obli9ated

to perform any act other than requesting such consent from

such mortqaqee), such failure shall be considered as Sell

er's inability to convey title as provided under paragraph 3

hereof and the riqhts and obliqations of Seller and Purchas

er shall be governed by paragraph 3 hereof.

(e) If Purchaser does not receive acceptable

title, survey, geotechnical report and/or covenants, as

described in paragraphs 4(a-d), the Purchaser shall no~ be

obligated to perfor-m any act other than notifying Seller in

writinq prior to JulY. 1, 1989, in which event Purchaser

shall he entitled· to a refund of the deposit provided in

paraqrap~ 2 anc! this Aqreement shall become cancelled and

void without further action of the"partie• and any obliga

tion and liability of PUrchaser under this Agreement shall

immediately cease and terminate an4 neither party shall have

any further claim against the other by reason of this

Agreement.

5. Risk of Loss. Risk of los• because of fire

or other casualty shall remain on the Seller until the

transfer of legal title to the Purchaser.

6. Proration. Real estate taxes shall be

prorated aa of the date of the Settlement on an acreage

basis.

40 •

5.

BLOM19·~~r~. ~nt 01

7. Possession. Possession of the Parcel shall

be qiven by the Seller to the Purchaser as of the data of

the Settlement.

8. Commission. Purchaser is unaware of the

terms and conditions of the aqency relationship between

Arthur Harrison, Barnwell & Jones, Inc. and The Chelsea

Group and the Seller shall hold harmless the Purchaser from

and aqainst any claim _for commission by same, which obliqa

tion shall survive the Settlement.

~. Representations and Warranties. The parties

hereto acknowledge that none of them haa relied on any oral

representation or agreement by any of them, and. no such

representation shall affect in any way the terms of this

Agreement •

. 10. Benefit. .ftia Agreement shall be binding

upon, and inure to the benefit of the heirs, personal

representatives, successor• an4 aaaigns of the parties to

this Agreement, except that Pluchaser shall not have the

riqht to assiqn this Agreement without the prior written

consent of Seller other than (a) to a partnership or corpo

ration of which tha majC?rity of interest or the votinq

shares is held by the partners of Purchaser or (h) to the

individual pa~tners of Purchaser.

11. Construction of Aqreement. This Agreement is

beinq delivered and ia to be performed in the State of

Virqinia and· shall be construed and. enforced in accordance

with the laws of that state. t\1.

• .. 6. -s-o-

BLOM19··-~~ ~nt 01

12. Complete Agreement. This A;reement consti

tutes the full and complete a;~eement between the parties to

it, supercedes any and all other agreements and understand

inqs, whethe~ written or oral, between these parties reqard

inq the subject matter contained in such aqreement and may

be modified, amended or chanqed only by a written instrument

executed by all the parties to this Aqreement.

13. Counterparts. This Aqreement may be executed

simultaneously in two or more counterparts, each of which

shall be deemed an original, but all of which toqether shall

constitute one and the same instrument.

14. Restriction of Use of Parcel. Purchaser

aqrees that the Parce~ will not be use4 for factory outlet

o~ discount retail stores or for a qas station, a drive-in

fast foocl re•taurant, iDclu4inq, but noc limited to, a

Mc~nal4 • •, Burger King, Wendy' • or Roy Rogers, a free

standing restaurant, except for a free-standing non-drive-in

resta~ant which is baing operated while a motel, hotel, inn

or lodqe i• located an4 opera~inq on the Parcel, or for any

othe~ use not permitted by any master plan adopted (whether

nov exia~ing or hereafter adopted) and any amendments

thereto by the municipality for the Shenandoah project.·

Such restriction as to factoey outlet oz- discount retail

stores shall only apply for so long a• the ramaininq parcel

is being use4 as· a factory outlet and/or discount retail

stores an4 upon the discontinuance of such use such re

strictions shall thereupon expire. Purchaser agrees that

. . •

- s-1- 7 • 4Z·

this aqreement and covenant shall be incorporated as a

restrictive covenant ~o apply against the Parcel pursuant to

the terms hereof.

15. Option. Purchaser shall have the option to

purchase the additional property of approximately two (2)

acres as shown on the attached plat on or before the second

anniversary of the date of this Agreement at a price equal

to Eighty Seven Thousand rive Hundred ($87,500) Dollars per

acreage including partial acres as shown by a survey pre

pared by Seller. · Such option shall only be exercisable by

Purchase~: CJiving notice of such exez:cise by certified ma1·1,

ratu~ receipt reque•tec!, to Seller given on oz: before the

second aDDiversary of the date of thi• Agreement. Such

notice shall be accompanied by an earnest money deposit of

$25,000 to be held by Barnwell 1 Jonea under the same terms

and condition• as ••t forth iD paraCJraph 2 hereof. If not

timely and properly exercised, such option shall be null and

void and of no futhe&- force u4 effect. If exercised by

Selle~, (a) the clo•inv shall take place no later than sixty

(60) c!aya after the exercise thereof, time beinq of the

••••nee a• to hrcha•er' • obliCJationa, and (b) the rights

and obliCJ&tion• of Sellei and Purchaser shall otherwise be

qovemed by the teJ:JU of this Agreement, incluc!inq the

restrictive covenant• specified in thi• Agreement.

D. CONCLUSION. To evi4ence their aCJreement to the

ter.ms and conditions of this Aqreement as set forth above,

a.

BLOMl! ~e~ment 01

the parties hereto have duly executed this Agreement on the

day, month and year indicated below.

Dated: May (\ .. c...., 1989

WITNESS:

WITNESS a

•

PURCHASER:·

BMC PROPERTIES

B ~ .. ,....- ( ) y __ ........ ~~·.,-;·u...._ ____ SEAL ., I

SELLER I

8LOM19 · A.gr. .nt 01

AGREEMENT FOR THE PURCHASE AND SALE OF

REAL ESTATE

A. INTRODUCTION. This is an Agreement made by and

between SHENANDOAH VILLAGE ASSOCIATES, L.P., having an

address at 103 Eisenhower Parkway, Roseland, New Jersey

07068 (the "Seller") and BMC PROPERTIES, having an address

at c/o John A. Conrad, Esq., Sands, Anderson, Marks &

Miller, 801 East Main Street,.Richmond, Virginia 23216 (the

"Purchaser"), the provisions of which are as follows:

B. RECITALS.

1. The Seller is the owner of certain real

estate located in Way~esboro, Virqi~ia and generally known

aS Shenandoah Villaqe~~UA~~~ (7

2. The Seller desires to sell to the. Purchaser

and the Purchaser desires to purchase from the Seller that

portion of the Shenandoah Village property indicated on the

attached plat consisting of four (4) acres (the •parcelw).

C. AGREEMENT. In consideration of the aqreements,

promises, covenants and conditions set forth herein, the

parties hereto agree as follows:

1. Price and Financial Ter.ms. The Seller aqrees

to sell the Parcel to the Purchaser and the Purchaser agrees

to buy the Parcel from the Seller at the purchase price of

Three Hundred Fifty Thousand ($350,000) Dollars in cash to

be paid at Settlement.

45

-'17-

2. Deposit. The Purchaser has deposited with

the Seller•s agent, Barnwell & Jones, the sum of Twenty Five

Thousand ($25,000) Dollars as .an earnest money deposit which

shall be negotiated only upon execution of this Agreement by

Seller and Purchaser, held in trust by Barnwell & Jones, and

shall be applied as a credit toward the purchase price at

Settlement. Should the transaction contemplat~d by this

Agreement not close for any reason except default hereunder

on the part of the Purchaser, all amounts paid pursuant to

this paragraph shall be immediately refunded to the Purchas

er by the Seller.

3. Settlement. The Settlement shall be located

at the General Wayne Inn or at Barnwell ' Jones on July 1,

1989, of which time shall be of the essence with respect to

Purchaser's obligations hereunder. At the Settlement, the

Seller shall deliver to Purchaser a General Wa~ranty Deed

with English Covenants of title prepared at the expen~e of

the Seller conveying th• P~rcel to Purchaser free and clear

of all encumbrances, tenancies and liens, but subject to the

applicable restrictive covenants specified in · this Agree

ment. The Purchaser shall pay for all other closing costs

in connection with the purchase and sale of the Parcel with

the exception of the Grantors Tax which shall be paid for by

the Seller, the survey referred to in paragraph 4 (b) and

Seller's attorneys~ fees.

Notwithstanding any other provisions o~ this

Agreement, whether express or implied, if Seller shall be

BLOM19 · ·r .... _ ... cant. 01

unable to convey the Parcel in accordance with the terms of

this Agreement, then the sole obligation and liability of

Seller shall be to refund to Purchaser the payment made on

the signinq of this Agreement. Upon the making of such

refund and reimbursement, this Agreement shall be deemed

cancelled and this Agreement, and any interest of Purchaser

in the Parcel, shall cease and terminate, and neither party

shall have any further claim against the other by reason of

this Agreement. Seller may take any measures of any kind

(includinq the commencement of any. action or proceedinq),

and shall be entitled to adjourn the date of Settlement

hereunder for a period up to thirty (30) days, in order to

render the title to the Parcel marketable or otherwise to

convey title in accordance with the terms of this Agreement,

but Seller shall not be required so to do or to incur any

expense or obligation in respect thereof. Purchaser may

(but shall not be required), accept such title.as Seller may .

be able to convey, without reduction of the purchase price

or any credit or allowance against the purchase price and

without any liability on the part of Seller. The acceptance

of a deed by Purchaser shall be deemed to be a full perfor

mance and discharqe of every aqreement and obliqation on the

part of Seller to be performed under this Aqreement. Unless

specifically stated to survive the delivery of the deed, no

aqreement made hereunder shall ·survive the delivery of the

deed.

47 J.

BLOM19:Agr~ ~nt Ol

4. Conditions Precedent: All obligations of the

Purchaser are subject to the fulfillment prior .thereto of

the following conditions prec~dent:

(a) The Purchaser shall obtain legal title

to the Parcel as described in paragraph 3.

(b) Seller agrees to provide to Purchaser,

at Seller's expense, a survey of the boundaries of the

Parcel, which boundaries shall be acceptable and agreed to

by the Seller and the Purchaser.

(c) The Purchaser shall obtain, at its

expense, a geotechnical survey of the subterranean sofl,

minerals and rock of the Parcel, which survey shall be

acceptable to the Purchaser.

(d)- Provided Seller receives the requisite

consent from its mortgagee, Seller agrees and covenants not

to sell or allow any other portion of its remaininqJ~operty h~~D~'J

(qenerally known as Shenandoah Villaq~ to be us d, con-

structed or improved as a motel, hotel, inn or lodqinq

business or similar facility and further aqr.ees that no such

lodginq facility or business shall be allowed to operate or

exist within the boundaries of its remaining property at any

time except on the Parcel. Seller further agrees that this

aqreement and covenant shall be incorporated as a restric

tive covenant to apply against the remaining property

currently owned by the Seller but such restriction shall

only apply for s~ long as the Parcel is being used as a

motel, hotel, inn or lodqing business or similar facility,

, . -/tJtJ-

· 8LOM19:~qr'- .nt:. U.L

and upon the discontinuance of such use, such restriction

shall thereupon expire. If such consent is not obtained

from Seller's mortgagee (and Seller shall not be obligated

to.perform any act other than requesting such consent from

such mortgagee), such failure shall be considered as Sell

er's inability to convey title as provided under paragraph 3

hereof and the rights and obligations of Seller ·and Purchas

er shall be governed by paragraph 3 hereof.

(e) If Purchaser does not receive acceptable

title, survey, geotechnical report and/or covenants, as

described in paragraphs 4(a-d), the Purchaser shall not be

obliqated to perform any· act other than notifying Seller in

writing prior to Jul:r: 1, 1989, in which event Purchaser

shall be entitled to a refund of the depoa·it provided in

paragrap~ 2 and this Agreement shall become cancelled and

void without further action of the parties and any obliga

tion and liability of Purchaser under this Aqreement shall

immediately cease and terminate and neither party shall have

any further claim aqainst the other by reason of this

Agreement.

5. Risk of Loss. Risk of loss because of fire

or other casualty shall remain on the Seller until the

transfer of leqal title to the Purchaser.

6. Proration. Real estate taxes shall be

prorated as of the date of the Settlement on an acreage

basis.

43. s.

-/01-

BLOM19·~gr~. ~nt 01

7. Possession. Possession of the Parcel shall

be qiven by the Seller to the Purchaser as of the date of

the Settlement.

8. Commission. Purchaser is unaware of the

terms and conditions of the agency relationship between

Arthur Harrison, Barnwell & Jones, Inc. and The Chelsea

Group and the Seller shall hold harmless the Purchaser from

and against any claim _for commission by same, which obliga

tion shall survive the Settlement.

9. Representations and Warranties. The parties

hereto acknowledge that none of them has relied on any oral

representation or aqreement by any of them, and no such

representation shall affect in any way the terms of this

Agreement •

. 10. Benefit. .This Agreement shall be bindinq

upon, and inure to the benefit of the heirs, personal

representatives, successors and assigns of the parties to

this Agreement, except that Purchaser shall not have the

riqht to assign this Aq~eement without the prior written

consent of Seller other than (a) to a partnership or corpo

ration of which the maj~rity of interest or the votinq

shares is held by the partners of Purchaser or (b) to the

individual partners of PUrchaser.

11. Construction of Agreement. This Agreement is

beinq delivered and is to be performed in the State of

Virqinia and shall be construed and enforced in accordance

with the laws of that state.

50 6 • . .

- /0;1..-

12. Complete Agreement. This Agreement consti

tutes the full and complete agreement between the parties to

it, supercedes any and all other agreements and understand

ings, whether written or oral, between these parties regard

ing the subject matter contained in such agreement and may

be modified, amended or changed only by a written instrument

executed by all the parties to this Agreement.

13. Counterparts. This Agreement may be executed

simultaneously in two or more counterparts, each of which

shall be deemed an original, but all of which together shall

constitute one and the same instrument.

14. Restriction of Use of Parcel. Purchaser

agrees that the Parcet will not be used for factory outlet

or discount retail stores or for a gas station, a drive-in

fast food restaurant, including, but not limited to, a

McDonald' s, Burger ltinq, Wendy' s or Roy Roge.rs , a free

standing restaurant, except for a free-standing non-drive-in

restaurant which is being operated while a motel, hotel, inn

or lodge is located and operating on the Parcel, or for any

other use not permitted by any master plan adopted (whether

now existing or hereafter adopted) and any amendments

thereto by the municipality for the Shenandoah project.

Such restriction as to factory outlet or discount retail

stores shall only apply for so long as the remaining parcel

is beinq used as ·a factory outlet and/or discount retail

stores and upon the discontinuance of such use such re

strictions shall thereupon expire. Purchaser agrees that

51. -7 • . .

--~··-· . .,

this agreement and covenant shall be incorporated as a

restrictive covenant to apply against the Parcel pursuant to

the terms hereof.

15. Option. Purchaser shall have the option to

purchase the additional property of approximately two (2)

acres as shown on the attached plat on or before the second

anniversary of the date of this Agreement at a price equal

to Eiqhty Seven Thousand Five Hundred ($87,500) Dollars per

acreaqe includinq partial acres as shown by a survey pre

pared by Seller. · Such option shall only be exercisable by

Purchaser qivinq notice of such exercise by certified ma~l,

return receipt requested, to Seller qiven on or before the

second anniversary of the date of this Aqreement. Such

notice shall be accompanied by an earnest money deposit of

$25,000 to be held by Barnwell ' Jones under the same terms

and conditions as set forth in paragraph 2 hereof. If not

timely and properly exercised, such option shall be null and

void and of no further force and effect. If exercised by

Seller, (a) the closing shall take place no later than sixty

(60) daya after the exercise thereof, time beinq of the

essence as to Purchaser's obligations, and (b) the riqhts

and obliqations of Seller and Purchaser shall otherwise be

qoverned by the terms of this Agreement, includinq the

restrictive covenants specified in this Aqreement.

o. CONCLUSION. To evidence their agreement to the

terms and conditions of this Agreement as set forth above,

sz B.

-ltJt/-

BLOMl~ qredment 01

the parties hereto have duly executed this Aqreement on the

day, month and year indicated below.

Dated: May [\'"c....., 1989

WITNESS:

WITNESS:

PURCHASER:

BMC PROPERTIES

B ~J~r-- ( y __ ---.:.;F~'!Aw;;.,."""'~rJI----- SEAL) ./ I

SELLER:

SHENANDOAH VILLAGE ASSOCIATES, L.P., By CDL Chelsea Partners, Inc., General Partner

~L~· (SEAL)

~~~~ ~~ t i¥tJ_, .. ~~ ~"" . p

53 •

· . -IdS"=- g.

McPHERSON, & SANTOS. L.C.

iEYSATLAW

"ON. VIRGINIA

-402·1287


WAYNESBORO VILLAGE, L.L.C.

Plaintiff

v. ·cH95000143

BMC PROPERTIES, et al.

Defendants

MEMORANDUM OF LAN IN OPPOSITION TO DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

In response to the Defendants' brief in support of their

motion for summary judgment, the Plaintiff represents as follows:

DEFINITIONS

1. Waynesboro Village is the plaintiff.

2. The WV Property is the real estate and improvements

conveyed to Waynesboro Village by deed recorded in the

Clerk's office in Deed Book 210, page 115.

3. BMC is the defendant, BMC Properties.

4. The BMC Property is the real estate conveyed to BMC by

deed recorded in the Clerk's Office in Deed Book 160,

page 517.

5. SVA is Shenandoah Village Associates, L.L.P.

6. The Restrictive Language or the Language is the

language quoted in Paragraph 6 of the Complaint.

STATEMENT OF FACTS

The Plaintiff adopts the statement of facts contained in the

Defendants' brief except in the following particulars:

54

-I ~q-

1. Although title to the 135 acre tract was transferred to

Waynesboro Village by deed dated October 28, 1994, recorded in

the Clerk's Office in Deed Book 210, page 115; SVA was not the

grantor. Rather, the grantor was the Federal Deposit Insurance

Corporation, receiver for Dollar Dry Dock. Bank.

2. The last paragraph of the Defendants' stat·ement of facts

appears nowhere in the record of this case.

3. In response to Interrogatories 5 and 6, BMC acknowledged

that it had no knowledge that either SVA or Waynesboro Village

knew of any "additional time and money [expended by BMC] to

develop [the BMC Property] as a motel."

4. In response to Interrogatory 6, BMC acknowledged that

there is no lodging facility located on the BMC Property, and in

response to Interrogatory 9 (requesting the earliest date by

which BMC projects that it would construct a lodging facility on

the property) , BMC responded that " [a] specific date has not been

determined."

5. At the time of the conveyance of the BMC Property to BMC,

the property which became the WV Property had already been

factory outlet shopping center.

ARGUMENT

The Restrictive Language clearly does not proscribe

Waynesboro Village from using its property as a hotel facility at

~soN. the present time. By its own terms, the Language applies: ::>S.LC. LAW

~INIA

. . . only for so long as the [BMC Property] is being used as a motel, hotel, inn or lodging business or similar facility.

55

-/L/()-

McPHERSON,

& SANTOS. LC.

'IIEYSATLAW

"ON. VIRGINIA

402-1287

Moreover, the Language is equally explicit that "[u]pon

discontinuance of such use, this re·striction shall expire. " It

cannot more clear that any restriction derived from the Language

was intended to apply only for such time as the BMC Property is

being used in some fashion as the site for a lodging facility.

By its own admission, BMC is not using its property as a "motel,

hotel, inn or lodging business or similar facility." Moreover,

by its own admission, BMC has no firm plans or time schedule to

put the property to that use. Because it is not currently

applicable, the Language does not now restrict the WV Property

from being used as the site for a hotel.

Clearly, the real problem is whether or not the Restrictive

Language is to be construed to take life at such tim~ (if ever)

as BMC actually develops its property for use as a lodging

facility. When or if that will occur is not clear from the

record. Hence, the Language, which does not now apply and may

never apply by its own terms, yields an anomalous result.

Although it may never be actually in force (and, therefore, may

never be enforceable), it has precisely the same effect as if it

were.

An interpretation of the Language as a restriction which

will come to life, if ever, at some indeterminat·e time in the

future, fails to address two issues. First, there is no

evidence that Waynesboro Village knew or had reason to know that

BMC had not (at some point after it had purchased the BMC

Property but before Waynesboro Village purchased its property)

used and then discontinued use of the BMC Property as a site for

56 - JL./.1-

~SON.

OS.LC. LAW 31NIA

a lodging facility. Hence, immediately upon the purchase of its

property (and, for that matter, with its intention factored into

its purchase price) , Waynesboro Village could have undertaken to

develop its land in good faith and without knowledge of any

existing restriction. Second, even given that BMC has never used

its property as the site for a lodging facility, the mere

existence of the Restrictive Language inhibits Waynesboro Village

from developing its property for what is not currently an

unrestricted use. For Waynesboro Village to construct a lodging

facility now is to risk the possibility that BMC wTll later elect

to develop its property as a lodging facility and then argue that

the Restri~tive Language ripens into a restriction to be enforced

by an injunction against Waynesboro Village prohibiting the

continued use of its (by then) already developed property.

While Waynesboro Village cannot dispute BMC' s assertion that

restrictions against the commercial use of land can be reasonable

and enforceable, the Supreme Court of Virginia has also stated

the law to be that:

Valid covenants restricting the free use of land, although widely used, are not favored and must be strictly construed and the burden is on the party seeking to enforce them to demonstrate that they are applicable to the acts of which he complains. [Citations omitted.] Substantial doubt or ambiguity is to be resolved against the restrictions and in favor of the free use of property. [Citation omitted.] Friedburg v. Building Committee, 218 Va. 659, 665 (1977) 0

In the instant case, there is a clear ambiguity in the

Restrictive Language in that, from its inception, it was no

restriction at all and remains ineffective except in an in

5~" -1</2-

. McPHERSON,

; & SANTOS. LC.

NEYSATLAW

~ON. VIRGINIA

~-1287

terrorem sense. By its plain terms, the Restrictive Language

applies to a circumstance which does not exist, has never

existed, and may never exist. It is like an interest in land

which has not and may never vest.

Whether the Restrictive Language is perceived to be a

covenant running with the land or a personal covenant potentially

restricting the use of the WV Property for the benefit of the BMC

Property, it is neither a restriction or a personal covenant

currently benefitting BMC. As BMC has noted, a court of equity

may enforce even a personal covenant of which a purchaser has

notice (citing Oliver v. Hewitt, 194 Va. 167 [1950]), but a court

of equity ought not enforce a restriction which does not apply or

a personal covenant of which there is no evidence that the

purchaser had notice. Even if the restrictive la~guage was not

void ab initio (because ineffective ab initio), it is clearly

inequitable to enforce it against Waynesboro Village, which "

purchased its property with no reason to believe that the

purported restriction was applicable to its property, either

because the language clearly did not apply at the time of the

purchase (as there was no lodging facility on the BMC Property)

or because it had ceased to apply (because, for all Waynesboro

Village knew, BMC had discontinued use of its property as a

lodging facility) .

over seven years have elapsed since the Restrictive Language

appeared in the deed from SVA to BMC, and over five years passed

between the deed to BMC and the deed to Waynesboro Village.

During that time, BMC has taken no action (certainly none which

58 _Jt./3-

SON,

IS,L.C.

AW INIA

would be apparent to any successor of SVA) to cause the

Restrictive Language to ripen into an enforceable restriction.

Waynesboro Village agrees with BMC that the mere lapse of time

does not give rise to a presumption that a restrictive right has

been abandoned. Here, however, the lapse of time, coupled with

BMC's inaction, has resulted in a change in position by ----------------~---------------

Waynesboro Village, an innocent party acting in good faith

without notice of the applicability of any current restriction. ··-- . - ·-·-- . - ·~--.- -· ... - ----

Waynesboro Village purchased its property at a time when there

was no lodging facility on the BMC Property, so free of any

current restriction. Having sat quietly as Waynesboro Village

changed its position by purchasing property unaffected by a

restriction, BMC should now be estopped to ask a court of equity

to interpret the Restrictive Language so as to apply in the

future to the detriment of Waynesboro Village.

< ~L Victor V. Ludwig Nelson, McPherson, P.O. Box 1287 Staunton, Virginia

Respectfully submitted,

Waynesboro Village, L.L.C. By Counsel

Summers & Santos, L.C.

24402-1287

Certificate of Mailing

I hereby certify that a true and accurate copy of the foregoing memorandum was mailed to Charles L. Ricketts, III, Allen & Carwile, P.C., P.O. Drawer 1558, Waynesboro, Virginia 22980; John A. Conrad, Sands, Anderson, Marks and Miller, P.O. Box 1998, Richmond, Virginia, 23216-1998; and Scot A. Katona, Dillard and Katona, P.O. Box 356, Tappahannock, Virginia, 22560, on September 19, 1996.

Victor V. Ludwig

59 -- I d.£/-

VIRGINIA: IN THE CIRCUIT COURT FOR THE CITY OF WAYNESBORO

WAYNESBORO Vll.LAGE, L.L.C., Plaintiff

v.

BMC PROPERTIES, and BANK OF ESSEX, and ALEXANDER F. DILLARD., JR., TRUSTEE, and EARL R. JOHNSON, TRUSTEE,

Defendant

DECREE

Case No. 820CH95000143-00

This cause, which has been regularly matured, set for hearing and docketed,

came on this day to be heard upon the bill of complaint and exhibits therewith; upon

the responsive pleadings ofBMC Properties, Bank ofEssex, Alexander F. Dillard, Jr.

Trustee and Earl R. Johnson, Trustee; upon the cross bill of Defendant, BMC

Properties; upon the Plainti.ft's answer to the cross bill; upon the motion of BMC

Properties for summary judgment, and was argued by counsel

Upon consideration whereof, it appearing to the Court that no fact in this cause

is genuinely in dispute; that the restrictive covenant which is the subject matter of

this cause is not ambiguous and can be interpreted from the deed in which it is

contained; that the intent of the parties to the original deed containing the restrictive

covenant was to protect their respective interest in the future and that said covenant

was prospective; that to interpret the restrictive covenant otherwise would be to

render the agreement of the original parties meaningless; it is therefore ADJUDGED,

ORDERED and DECREED that the motion for summary judgment filed by BMC

Properties be granted; that the bill of complaint be ~smissed and that the restrictive

covenant, prohibiting the Plaintiff from using its property as a motel, hotel, inn or

60 _,LJS- 773

other lodging business, as set out in a deed from Shenandoah Associates, L.P., a

Virginia limited partnership to BMC Properties dated June 20, 1989 and recorded in

the Clerk's Office of the Circuit Court for the City ofWaynesboro, Virginia in Deed

Book 160 at page 517 is an enforceable restrictive covenant prohibiting Plaintiff from

the uses aforesaid.

Chir es L. Ricketts, ill Counsel for BMC Properties Allen & Carwile, P.C. P. 0. Drawer 1558 Waynesboro, Virginia 22980

Date: g.7J,. I'''

SEEN AND OBJECTED~ 'IHE GROUNDS SET FORTH IN 'lHE MEMORANDUM OF LAW IN OPPOSITION TO

~~0~ ~y JUDGMENT.

Victor V. Ludwig Counsel for Waynesboro Village, L.L.C. Nelson, McPherson, Summers & Santos P. 0. Box 1287 Staunton, Virginia 24402-1287

Scot A. Katona Counsel for Bank of Essex, Alexander F. Dillard, Jr., Trustee and Earl R. Johnson, Trustee Dillard and Katona P. 0. Box 356 TappahannoCk, VirgUrla 22560

61, - 14~-

. McPHERSON, ; & SANTOS, L.C. NEVSATLAW

TON. VIRGINIA

1.402·1287


WAYNESBORO VILLAGE, L.L.C Plaintiff

v.

BMC PROPERTIES, ET AL. Defendants

PLAINTIFF'S MOTION TO VACATE THE DECREE

CH95000143-00

Waynesboro Village, L.L.C. (Waynesboro Village), by counsel,

for its motion to set aside the Decree entered by the Court o

November 20, 1996, states as follows:

Introduction

In the Decree, the Court ruled that the "restrictiv

covenant, prohibiting Waynesboro Village from using its propert

as a motel, hotel, inn or other lodging business, as set out in

deed from Shenandoah Associates, L.P. (SVA), a Virginia limite

partnership, to BMC Properties dated June 20, 1989, and recorde

in the Clerk's Office of the Circuit· Court of the City o

Waynesboro, Virginia, in Deed Book 160 at page 517 is an enforce-

able restrictive covenant prohibiting Waynesboro Vill~ge from th

uses aforesaid."

Pursuant to Rule 1:1 of the Rules of the Virginia Suprem

Court, the action remains within the control of the Court and i

subject to be modified, vacated or suspended by the Court.

there are two determinative issues that will materially affect

outcome of the action, Waynesboro Village· respectfully request

that the Court exercise its discretion and vacate the Decree t

permit the consideration of two legal issues. The purpose of thi

memorandum is to set forth the basis of the additional issue

62

-Jt./.7-

:RSON,

ros. LC. "LAW

IGINIA

sought to be presented to the Court by Waynesboro Village. Fo

the purpose of this memorandum, waynesboro Village adopts th

definitions set out in its Memorandum of Law in Opposition t

Defendants' Motion for Summary Judgment.

Brief Summary of Facts

In 1988, SVA owned a 130-acre tract located in Waynesboro,

Virginia. On February 11, 1988, SVA conveyed real estate pursuan

to a deed of trust to secure a mortgage loan made by Dollar Dry-

Dock Bank (the Deed of Trust) . The Deed of Trust was recorded i

the Office of the Clerk of the Circuit Court of the City o

Waynesboro, Virginia, in Deed Book 150, page 806 on February 11,

1988.

Subsequent to the recordation of the Deed of Trust,

received a Certificate of Partial Release from the Deed of Trus

for the BMC Property and, on June 20, 1989, SVA conveyed the BM

Property to BMC. The deed to BMC contains the Restrictiv

Language.

Following the failure of Dollar Dry-Dock Bank, the Federa

Deposit Insurance Corporation (FDIC) exercised its right to tak

control of the bank as Receiver. On October 21, 1993,

remaining portion of the 130-acre tract was conveyed to

Thereafter, on October 28, 1994, the FDIC conveyed the

portion of the 130-acre tract to Waynesboro Village. Attached t

this Memorandum as Exhibit A is a true and accurate

special warranty deed transferring title from the FDIC

Waynesboro Village.

2

63 - JL/ f-

..CcPHERSON, l SANTOS. LC. EYSATLAW

lN. VIRGINIA

J2·1287

Araument

1. The Restrictive Lan a e. is invalid ursuant to th D'Oench Duhme doctrine.

In a landmark decision in 1942, the United States Suprem

Court, in D'Oench Duhme and Company. Inc. v. FDIC ruled that whe

a bank or savings institution is placed into receivership, a part

is barred from relying upon any agreements which are not reflecte

in the records of the bank or savings institution. D'Oench Duhm

and Company v. FDIC, 315 U.S. 454 (1942). The rule set forth i

the decision has come to be known as the D'Oench Duhme doctrine,

the essence of which has been codified by Congress in 12 U.S.C.

§1823 (e) .. section 1823 (e) provides that:

No agreement which tends to diminish or defeat the interest of the (FDIC) in any asset acquired by it under this section either as security for a loan or by purchase or as a receiver of any insured depository institution shall be valid against the (FDIC) unless such agreement

(1) is in writing,

(2) was executed by the depository institution and any person claiming an· adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the depository institution,

(3) was approved by the board of directors of the depository institution or its loan committee, which approval shall be reflected in the minutes of the said board of committee, and

(4) has been, continuously, from the time of its execution, an official record of the depository institution .

3

6ti - lc./..~-

RSON.

OS.LC. LAW

31NIA

The United States Court of Appeals for the Fourth

explained the D'Oench Duhme doctriae in Resolution Trust

v. Allen, 16 F.3d 568 (4th Cir. 1994} as follows:

[t] he D' Oench Duhme doctrine . . and its progeny, prohibits claims based upon agreements which are not properly reflected on the official books or records of the failed bank or thrift. The purpose of the doctrine is to enable the FDIC or RTC to rely on official bank records to set forth the rights and obligations of the financial institution to the exclusion of extraneous matters .

Given the public policy to require adequate supervision o

banking institutions by the FDIC, the D'Oench Duhme doctrine 11 ha

been held applicable to virtually any claim or defense that ha

the effect of adversely impacting the value of assets held b

failed financial institutions ... Zisman, 11 Banks and Thrift

Government Enforcement and Receivership 11 , Section 25.07 (1} (1995) .

Indeed, the clear import of §1823(e} provides that any asset tha

is adversely affected by an agreement is subject to the D'Oenc

Duhme doctrine.

There is no evidence before the Court that the requirement

of the D'Oench Duhme doctrine were met contemporaneously with th

recording of the Restrictive Language. There is no recorde

consent by Dollar Dry-Dock Bank or any evidence of approval by th

board of directors, of the filing of the agreement with th

minutes of the board of directors, or that the Restrictiv

Language was part of the official record of Dollar Dry-Dock Bank

Clearly, the Restrictive Language adversely affects

FDIC's interest in the asset held as security for the loan, as

covenant is an encumbrance. Thus, under the D' Oench Duhm

4

6 r• ;:,

_/.sz>-

'AcPHERSON, 1 SANTOS, LC. EYSATLAW

>N. VIRGINIA

J2-1287

doctrine, the agreement encompassing the Restrictive Language i

not enforceable.

The right to rely upon the D'Oench Duhme doctrine has bee

extended to parties who have purchased assets from the FDIC. Se

FDIC v. Morley, 867 F.2d 1381 (11th Cir. 1989), cert. denied, 49

U.S. 819 (1989); In re Hood, 94 B.R. 696 {Bkrcy. W.D. Mo. 1989);

FDIC v. Newport, 713 F. Supp. 320 {W. D. Mo. 1989) . Once a

agreement is invalidated by the FDIC, it cannot be renewed b

transfer of the asset to a third party by the FDIC, for to hol

otherwise would "emasculate the policy behind §1823(e) o

encouraging . (it) to participate in transfer agreements."

FDIC v. Newport, 713 F. Supp. at 320 (W.D. Mo.)

The Virginia Supreme Court recently addressed a similar issu

in Union Recovery Limited Partnership v. Horton, Record No. 96032

(November 1, 1996). In Union Recovery, an assignee of the RT

sought to rely upon the special federal statute of limitation

applicable to federal agencies acting as receivers for bankin

institutions, a code provision similar to the D'Oench Duhm

doctrine. In Horton, the Virginia Supreme Court held tha

assignees of the RTC enjoy the same rights and defenses availabl

to the RTC under the banking statutes. A copy of the Horta

opinion is attached to this memorandum.

The D' Oench Duhme doctrine's effect of invalidating

Restrictive Language is confirmed by the deed conveying

property from the FDIC to Waynesboro Village. Exhibit B to

deed lists specific "permitted encumbrances," and the Restrictiv

5 66 -lSI-

RSON. 'OS.LC. LAW

131NIA

Language is not included on that list. The clear import of th

history of the transfers in this action is that the agreement t

apply the Restrictive Language to the remaining portion of th

property of SVA was not a valid agreement under the D'Oench Duhm

doctrine and, therefore, the FDIC and purchasers claiming throug

the FDIC are not subject to the restrictive covenants. Therefore,

the Court should rule that the Restrictive Language is invalid.

2. The Restrictive Lan Associates did not assess the necessa conve an interest in the remainin acre tract.

In order to establish a valid covenant that runs with th

land, the party encumbering the land must have the capacity t

convey the land. Randolph's Admin. v. Kenny, 24 Va. {3 Rand.) 39

(1825). The Kenny case stands for the simple proposition that

party seeking to encumber land must not be a stranger to title bu

instead must have the capacity to conve~ title.

It is unquestionable that prior to the sale of the BM

Property, the entire tract of land owned by SVA was subject to

recorded Deed of Trust. In Virginia, a deed of trust

legal title to the property to the trustee. Va. Code

Abdelhag v. Pflug, 82 B.R. 807 (E.D. Va. 1988). In

Court noted that as legal title vests in the trustee, the debto

merely "retains the equitable right to repay the indebtednes

secured by the trust and obtain the prope~ty upon full payment.'

In Edwards v. Bridgetown Community Association,

1235 (Miss. 1986), the Court addressed the effects of a restric

tive covenants on a superior Deed of Trust. Citing Merchants an

6

67 -I S'"...t-

McPHERSON, & SANTOS, LC.

iEYSATLAW

ON. VIRGINIA

402·1287

Farmers Bank v. Pool Brothers, 140 Miss. 799, 106 So. 627 (1926),

the Court held that a bank's deed of trust may not be impaired b

a subsequent contract. The Court reasoned that while the ban

could waive its superior lien, "the bank, of course, has a righ

under its Deed of Trust to refuse to waive anything, and it woul

be beyond the power of the (mortgagor), after executing the Dee

of Trust, to make any contract without the consent of the ban

which would impair its security." Id. at 1238.

As legal title to the property was conveyed from SVA to th

trustees pursuant to the Deed of Trust, SVA did not have th

capacity to convey the remaining portion of the tract. In othe

words, as legal title resided with the trustee, SVA had no lega

authority to encumber the property. The title records do no

reflect any recorded consent of the trustees or any recorde

consent of the mortgagee to the encumbrance of the rernainin

portion of the tract. Therefore, the title records reflect upo

their face that the restrictive covenants sought to be enforce

against the remaining tract were a nullity as SVA had no capacit

to convey. Thus, the Court should rule on this further groun

that the Restrictive Language is invalid.

WHEREFORE, Waynesboro Village respectfully requests

Court vacate the Decree, consider the issues raised in this rnotio

and declare the Restrictive Language invalid.


BY COUNSEL

NELSON, MCPHERSON, SUMMERS & SANTOS, L.C.

7

68 _fs-3-

I SON, IS,LC . .AW

INIA

By: Victor V. Ludwig P. 0. Box 1287 Staunton, Virginia 24402-1287

CERTIFICATE


foregoing motion was mailed to Scot A. Katona, Esquire, Dillard

and Katona, P.D., P. 0. Box 356, Prince and Cross Streets,

Tappahannock, Virginia 22560; John A. Conrad, Esquire, Sands,

Anderson, Marks & Miller, P. 0. Box 1998, Richmond, Virginia

23218-1998, and Charles L. Ricketts, III, Esquire, Allen and

Carwile, P. 0. Drawer 1558, Waynesboro, Virginia 22980, this 5th

day of December, 1996.

\ Victor V. Ludwig

c:\clients\j-k-1\lt.mot

8

69 - !~r.l-

· ..,..,- , • . .. .. • • ·;. ~ - r .... -. _, __ , ,.._ •..

Pqe3

i.ST CASE of lAvei 1 priatcA iti FULL formal.

~10N RECO\'ER.Y r .. IM!TED PAl{T'NERSHIF v. THOMAS B. BORrON, ET AL.

1996 V&. l.EXIS 103

PRIOR HISTORY: [•1] PROM TUB ClRClil'i COUIU OF FAIRFAX COUNTY. M. Langhorne K:ith, Judge.

DISPOSmON: R.evenicd and rm:naudecl.

JUDGES: Present: All the luatices. C>P1NION BY JUSTICE LAWRBNCB L. KOONTZ, Jll..

OPINIONBY: LAWPJlNCI3 J.,. KOONTZ, JR.

OPl~·HON: OP!NlON BY JUSTICE IAVRBNCE L. KOONTZ, JR.

In this appeal we conak1er wh.ether at: ~~gn~ of ~ promi!SOty :lote trom me Resolution Tt.a: Co:rpc:J~Otl (KTC) is emhlt4 to the iMnefit oi the ~~•"~ ~-.t lhu!i:i· tion& available ur.der f~e~·~l lr.w to kTC a• r«:ei\f4.'i "' the: insured depo;i1tory instit~tion -1l::.ct. odaiJ&lly 1\61,:. tbe note. Adhering to the common Jaw rule uw an u· aigncc acquires the dghta of the ~tfd."~ w: hole; t·nar the federal ~ co•1tNl1S the 1;minrtioas perioc.

BACKGROUND

The tacts of lhe c~ aa·o not 1.1 dispute:. Ct:, Jw-.c 8. 1989, Thomas E. Horwn executed a p1"0~ry DOle in ia•.:or of federlil Saving! Bank of Vit~ia. F.S.&. (Federal) in the pfmctpal ~ of S 80,COO. A viiiable rate of mtere11 waa payable monthly oz: me note from August 1, 19l!9~ and th~ princLpil. wa dur. "ON DEMAND, BUT lP NO DSMAND IS ~ADE THEN OS 1ULY 1, 1990. II Robm J. Leipzig oxecuted a panial guaranty o! the~ in lbe llm\Dlt of S 20,000.

Sometime prior to April, 1992, Horton [~J defaultect on :he note and l.Aip7.is d.l:fauJ~ on tM g;uaranty. Ora Aptii 10. \ 992., Kl'C waa ~"4)()b;ted tea:~vcr for Pedenl and assumed control of iu u•cu, in:h:dins the ;:?t: and guaranty 81 UlDe. 0o JUilC 26, I 995, A1'C RS•

st.gn~ the note and guaruty co Uniua lteLJl\·a .'i i .. unlteJ Partnership (Un10D Recove'l)').

On August 30, 1995, U~ion Reco,·ery ;11~ I! mCJii\.n

for judsm= upiut Horcon and Leipzig to recover on '~ oote and guaramy. Withln rhe motion Cor judgment, Ullion Rcc::ovcry assencd the applicability oftbe liX4 year st~..alt.P- of limitB1ions afforded to RIC mder the PlnaDcial Institutions llcform, Recovery and Bnforc:ement Act (FIRREA). 12 U.S. C. I182J(d)(14)(A)(i). Botbltonon :and Leipzis filed pleu ill b6r con1e:St1Dg the application of the fcderallimitationa period aftd aaaenms lbat my action on the note wu barred by ~ rumUa& of the five-year statUte of limltadcml provided for UDder Code 1 8.01-246(2), which they allepcl waa che appliwlc t.tillt ltatute of llmita:km&.

The parties filed briefs .bl support of their respective ,o"'rloGS and prac:nted ~ co the rrtal court. By ~e: eu~ered November 17, 1995, tlle uiaJ court auawnd the pleu or tho staaxe of llmitlticml (•3] wl diamiAacd 1M tnOtioc tor judpx:nt with prejudice.

UoiOD Recovery fiEcd a motion for reconsidefation. In if. opinion letter dalecl December S, 1995 and adopted by mcrcocc in a nbsequent order denying the motton :or reconsideration, the trial gourt set fonh the pounds r.:.,c ih dcciaion. Citlag MMCO, 111, lJd. v. Pirn Pre.lmtRtt Monralt Corp., 856 F. Supp. 1016 (E.D. Vz. 1994). 1ho trial coun held that the ttatute of Umi· i.ations provl@d for in FIRREA was a right applicable o'.ly for suits brought by government chartcmd corpondoua. As ndl, tl&e trial court reasoned, the ~gbt was J)U&aa.al to 'RTC. and Union RecoveJ:y could aatuite only those rights R1C had under tDe JJDie aad guaruty lmtrumems, not Choae wblcb. R!'C had by vlnue of ita statu~> aa a receiver under PIRREA. '-" awar4ecl Union Rccovay an appeal.

APPUCATION OP STATE AND FEDERAL eTATUTB Of LIMITATIONS PBRJODS

Vl;-gini.a Statute of Limitatioos

Th~ note and. its asaocWed guiiiDDty were executed in 1 ~}J,'9 pr.or co the c:n&Ctmmt of Tltle 8 .3A, ml, acc.onting!y. this ea~e ia govemed by ttle rules fooDd In wpcr-

70 _;s-s--

wlecl1'itle 8.3. ~ p:1.~s have ~ntLsttn(!Y U'*cd tbe note as a pure demand note aldl\1U~h it (:t'~J r;rt:~\:~ed for a specific paymeot date it t-o <l~&!.ahd wu cl:W:. Cn~1 tile provis:ona of Code§ 8.3A-10H(c), abient .. ..ielllKOI!, a note oftbia type becomes pa.yabic Hll di:fuutt= time on the fixed date with the cau.ae of actio11 a=romg on tha1 d.ate. fsecause the isaue is ROl i~LeYant tO '3' ulumlte determination of thi& .appeal. we will a.uume, without deciding, tbal the partia bavc correctly appiled lhe rules or r.upersc=ded nue 8.3 ln their trcatiMnt of the note 1151

pure 4.emand aote. Under former Code I g .3·122( 1 )(b), the canse of actlOn on a pllft demand note acciUed upon lts execwlon.. Ptlm'.cdy. ci.cma.nC not:a •Ncrc subject to the f.ve·year swute of Umi1atioot appiicable to contracts senerally. Code i 8.01-~(2). " Aa:ordingly, Federal was required to 5ue on the note ~~tote JuGe !, t994 te avoid aD effective p!cz in bar nf the at11·11tc oilimitatJons.

.. Title 8.3A now ~;rc·'fides ~..:.r a. ,il\ .. yc.u· au.t~te oi luui.Wiom OA tlWSt fonm .; t· nea;CJli~lt: ~_.~.:~'='lts. Code f8.3A-:1H.

Federal Statut'-' or Lfmium<Jrt; &m\l.er f~ttj] FfitREA

FIRR.EA, Pub. L. No. ·H,l·"'l2, 103 Stat. 277 (1989}(t0dified m <li&Cf.tllr~'l!" ~!'$ ·Jl 't;d~ 12 and 15 of tbc U.S. Cod.c:~, aove::aa the pt~'"\lur.:s UD·

r:ter whtch fcdcrall)' char\tn:a corporations JK:ting as ~ or me Ur.!ted Slates be':Ome r~ei"~n or oon· acrvaton of faded federally ~,!tt.red &an.,;RJ m~tiQJ· uons. lu pnncipat applieat:ioo it to the P~ra! [)eposit Insurmce Corpor~d.on (PDtC). However, when p..cdue as receiver of an insured depository inStitution, lUC 11 deemed to be an agem of tbe. t:taited Swes. 12 U.S. C' § /#la(b){l)(AJ. As .suc-h, ~. aa ro;oCver. l1a dle saD'..e rights and powers aa does PDIC under FIRREA. 12 U.S. C. I 1441tz(b)(4)tA>. Tnua. ahh\1U&hcrc&&:cd for differez1~ purpl)fea, R.TC and FDIC en ~n ftlJ. reapcc.ta identically situated "'~ actlng u recelv~B in rhe aame of r.b.e U~ State:& under FDlREAw

The relevant portiona ot PI~ S/-.. !\;/J)!~~c!II~ 10 m!«; appeal are found 1112 u.s.c. § !S~l(d)U-41: ... .;.; r.::.d ~a~~

(A) ~ genetal. Not~ttbw~~ :A':J pt~'r.~~toJ\ of iit::tY coDmiCl, the app:icable scamre or tioitad~ WJUl r.-rpd tc any attion btoulbt by &., Co~u~ ., CODSe\'VIt« or receiver !hall be-

{I) the 6-yu.r period bcginnir.g on rhc:. ru= ~ claim

l"'.ll11'll

Pap4

accrues; or

(11; Lbe period ~lh:Hble u.oder Stale law;

(B) Determination of lbc date 011 whtcb a claim accme1. Par P'.lrJ'OIU of subparagraph (A), tbe date on wbich the sta.tute of limitatiou begtna to run on any claim dom'oed in aucb mbparasraph Jhall be the la&cr of-

\1) me dale of dlc appoiatmcDt of the Corporation ~ ~rvator or receiver• or

~H) t.~ date en wbith the cause of actio:rl acc.ruet •

"When R1C acquired tbe note IA4 guaranty a ncolver, 1t maa entitled under FIRRBA to lnltttute actions on them under lhe loageat period provided by the combiDed appll<:ation of IUblectioaa A IDd B of 12 V.S.C. I 1&2J(d)(l4). Uader me provtsimrs of sub&ection B. I\1C wu permitted to advance the clare of accrual of 1be .:.1:.ae.1 of acrioa"' April 10, 1992. die clam of iu ap· pt·~'ltmml • ~iver. It wu timber pertlliEla1 co take the aiA-ycar sta!Ute of llmltatlou of wbseccion A over the nve-year aUJUte of Umltationa available under swe liaw. ;\~rclingly. RIC had UDlil April 9, 1998 1.0. me u1)0n me note anc1 gummy.

DISCUSSION [4f7]

11 is well eatablilbed law ill Virgillia 1hat an asaignr:e obta1Da hla rights !tom the auipcr, • dma, he is aaid to "&tand in the shoea • of the assignor when pursuing an a:tion on the ccmttact or imt:rument assigned. See. e.g., NonOMI Bank and 7Jwr Company Dl C/ulrlolleJYiJl~ v. Ctut,t, 196 \fa. 686, 692·91, 8S S.E.2d 228. ?SZ (1935). Th111. the sole qw:ation in tbia appeal iJ wbuther the swure of llmlwlcma conuinecl in 12 U.S. C. It1l(d)(l4)(A) and.(B) applies to asipeca oflm:. or dtj tl!eae aasigueea tab d1elt aa&lpu~Brtts aubjett cml)' LO

:1-"' rtp1a Whlcb would. have accru4 to the falled IDBtitu&n ior whlch RIC is acting u receiver, tiNs becoming <it fa=o aseianee& of me instiluticm..

Jn Mnwutlia Sllll&.' FiltalrdtJl Raolln'.&J Corp. v, AgralWIJ, 711 F. Sllpp. 15'0 (w.D. Oldtl. 1991), ·~~ fin& !epOr1C4 c.e lO addreaa the application of F"i~A's sramto of Jimjtlfk>Qs p1oviskms to an assignee of an agent coqJOralicn of the United Statz~, the co\U't bcld that the federal stanue of limitations applied

71. - ;s-~-

1996 Va. LEXIS 103~ tt7

to caNigneeofFDIC./d. al/j$2. Thecounn:aaooecl tlw:

An aa&ignee atan.dt m mo shoe;a or the .uaignm:, aad acquires all of t~ wtgoor's t~~l rights anc. l~li· tics in the assignment. 'ndtt gcr&crlll !)ii:l!:l~~~ ai".d e strong public pollcy requlre W' th: 'PD1C' :J us; ;c~e acq11irc lhe aix~year hmitatioli& J~~rtoc1 9fO'.'i(\X1 ~Y i 1821(d)(l4)(A).

I d.

Several coum nave relied ('t the ::!llii:Yalint !.I:

MOWUaul StaLeS lO extend to wlgnees of FDIC the &ix.-yw stamte of limiwions vr::r'.'ir~ bJ ..-2 U.S.C 1 /82/(d}(I4)(AJ(\l. S"..e, e.g., FD l. C. v. bltil;(:~, 98!'1 P.2d 80$ (Sth Cir. 1993); Re;.':i!:!lon l"~t!:fmlnrs, Jr.c. 11. Kadmacy, 930 F. Sc.:.pp. ~;5 (C. D. Cal. 1996_),· Wftire v. Mon,arry, JS Cal. Apf. .;rJ& 12kl~ 19 C4l. Rptr. 2d 200 (Cal. Ct. App. 199J),' Th'OU lenlurts, Inc. "· .Bumaltn, 870 P.ld !244 (Colo. 19?4},· Cadl' CD. H, Inc. \1. Lewis, 2.$4 Kan. I $8, 864 P. 2ll 718 (Kan. 199J), cen. denied, U.S. , 114 S. Ct. 161.3 (1994),· C~~ttral Staza &Jourca Corp. v. Pirn Narional Bank, 243 NB1 . .538, SOl N. W.2d 271 (Neb. 1993j. ln ad4ltion. a teeent dcei.liou of the Appclllle Coun of lllinoia bu applied lhia aame reaaolll:oa U> a suit. broual=.t by an Ullignce nf RTC. 'l'w~r:t;v Fi "&! Ctllltu"} Rl.tXMry, Lid. v. Ma:J~; 279 u;. .ipp. Jd 660. 66S N.E.2d $73, 21(. nl. Dfc. 51.l (nZ. 0. Afop. 1996).

Disagreeing With the 1113jority view tn:o Cottt m WA..~CO, the d~i~io4 reli~ ou ')y !he t.~:sJ \!t)'"~ !.g) ;.n thiJ c.as;J, held :hat i:tC •1\'~· )t::or 'lir£Ptti~ :J:.1.'T~ fi:· ~i':l'litatiom appl led ro B derrumd : U1te 8-"tgc..~1 hy R'X t:.. W.~~JCO. Va'.iMCO, fd6 P. S~;. or J(~r,B . .IJll .. ~ ~:. sa the court founJ th::a1 th.~ :s:am~.e Ql~JUY coof~trea thL

bene& of the six-year limitation on iTC in ita atama as receiver. AA such, the C011!'l reuoued that the belefit il personal and, therefore, doe. not triDifer to an ustsnee under existing common law rule. ld. at 1086. The t..Vl.U't mnher found that pub& pol!Gy aloue could JlDt suppiy the tlg1lt where lhe sume wa m!ent. Id.

We do DOt concur ln the view expressed in WAMCO ai&d adopt lhc view taken by the majority of other federal and itate ju:lsdk:ti.cma. We find that application of tl\e common law, even without ~efen:nce 10 the public pol· 1cy ibis would promote, mmdatet the applieation of the !on.S~! limitaliom period. Aa expreased. by the United States Coon of Appeals for the Pifth C'U"Cuit lD Bledaoe, we hold that whcrc •statutes ate abtolutely ailmtt ou [a) matter[, i]t is 31\ ~iomatie priDC\ple of statutory eonsttu~ion tluu. in efl'cctua.d.n& Congress' intcDt courts are .. .(! tu~ the lnevitabl~ lftatUtoty gaps by reference to me ptil1Ciples of [•10] me commaa. law." Bl~ 989 F.2d ar 810.

The c~tcndcd statute of ltmltalicnl is merely a mechamun for provtdhlg rhe receiYer with mlliequate time to pursue those clabns which the financlallnadtudon could cot succcs1fally pumw prior to ita failure. AI such, chc receiver's right to sue within the ltatute of Umitattona period Is iJlherent in lla poaaeulon of the iaattUmCats at isauo alld would lhu& be among the "'rigbcs, remecllea and beneftU which are incidental lO the mms usipecl,' • lVWCO. 8S6 R SMpp. II 1086, and DOt merely a ript "'pmona~ to tbe aasip« and for (lul baefifomy:· Id. {citation omitted).

!1<'r tht.St reasons, we will rcvCIIC the order of the tnal court diamiastng the motion for judgmenc auci remand the (1~ for funher ProceediD&•· ~~vened 8Dd mn1Dde4.

7Z

lSi-

2499 @QQ( 2.1. 0 ?I~ 115 yirqinia Spaqial warranty Deed

TBIS CONVBYANCB IS ZXEHPT •aoM aBCORDATIOH TAZES IMPOSED UNDER SECTION 58.1•802 o• TBB CODB OP VIRGIH~, 1150, AS AMENDED, IH ACCORDAHCB !ITB TBB PROVISIONS OF 12 USC SBCTIOH 1825(8)(1).

The undersigned, Federal Deposit Insurance corporation as Receiver for Dollar Dry Dock Bank (herein called "Grantor"), whose mailing address is cjo J .E. Robert company of New England, 185 Plains Road, Milford, connecticut 06460, for and in consideration of the sum of TEN ( 10. 00) DOLLARS and other good and valuable consideration in hand paid to Grantor, the receipt and sufficiency of which is hereby acknowledged, by these presents does hereby GRANT, SELL and CONVEY WITH SPECIAL WARRANTY OF TITLE unto WAYNESBORO VILLAGE, L.L.C. (herein called "Grantee"), whose mailing address is c/o George Gilliam, Esquire, 418 East Water Street, Post Office Box 2737, Charlottsville, Virginia 22902

(i)

(ii)

that certain tract or parcel of land situated in Waynesboro, Virginia, described in EXhibit "A" attached hereto and incorporated herein for all purposes, together with all rights and appurtenances pertaining thereto, including, but not limited to, any right, title and interest of Grantor in and to adjacent streets, alleys or rights-of-way (the "Land"), and

all buildings and other improvements situated on the Land, tQCJether with all fixtures and other property attached thereto (hereinafter collectively called the "Improvements")

(all of the foregoing Land and Improvements being hereinafter together called the •subject Property•), subject to general real estate taxes on the Subject Property for the current year and subsequent assessments for prior years due to change in land usage or ownership, zoning laws, regulations and ordinances of municipal and ~ther governmental authorities, if any, affecting the Subject Property and ~11 matters of record including bUt not limited to those matters set forth on bb:lbit "B" attached hereto and made a part hereof by reference (all of the foregoing hereinafter called the "Permitted Encumbrances"). ·

TO HAVE AND TO BOLD the Subject Property together with ail and singular the rights and appurtenances thereto belonging, unto the Grantee, and Grantor does hereby bind itself, its successors and assigns, to WARRANT AND FOREVER DEFEND all and singular the Subject Property unto the Grantee and assigns, against every person whomsoever lawfully claims the subject Property or any part thereof by, through or under Grantor, bUt not otherwise, subject, ·however, to the Permitted Encumbrances.

73 _,fS-

8001 210. PAGE 116 The conveyance is made upon the following terms and

conditions:

(A) For purposes of this Deed, the following terms shall have the definitions indicated:

(1) "Environmental Law" shall mean any federal, state or local laws, ordinances, permits or regulations, or any common law, regarding health, safety, radioactive materials, or the environment, inclucUng, but not limited to, the following federal statutes: Clean Air Act (42 u.s.c. 557401 et agg.) ("CAA"), Clean water Act (33 u.s.c. 551251 G S\Sl•) ("CWA"), Resource Conservation and Recovery Act (42 u.s.c. 556901 gt llml•) ("RCRA"), comprehensive Environmental· Response, Compensation, and Liability Act (42 u.s.c. 559601 At Jgg.) ("CERCLA"), Emergency Planning and Community Right-to-Know Act (42 u.s. c. 5511001 At .ISm•) ("EPCRA"), Safe Drinking Water Act (42 u.s.c. 55300f ~ ~-) ("SDWA"), Toxic Substances Control Act (15 u.s.c. 552601 gt ~·) ("TSCA"), Endangered Species Act of 1973 (16 U.S.C. 551531 g Ami•) ("ESA"), Federal Insecticide, Fungicide and Rodenticide Act (7 u.s.c. 55136 ~ ~-) ("FIFRA"), and the Occupational Safety and Health Act (29 u.s.c. 55651 ~ ~·) ("OSHA"), each as amended, and any regulations promulgated thereunder, guidances and directives issued with respect thereto, or policies adopted by authority thereunder.

(2) "Release" shall mean the discharqe, disposal, deposit, injection, dumping, spilling, leaking, leaching, placing, presence, pumping, pouring, emitting, emptying, escaping or other release of any Hazardous Material.

(3) "Hazardous Material• shall mean: (a) any radioactive materials; (b) any· substance or material the transportation, storage, treatment, handling, usa, removal or Release of which is subject to any Environmental Law; or (c) any substance or material for which standards of conduct are imposed under any Environmental Law. Without limiting the generality of the foregoing, "Hazardous Materials" shall include: asbestos and asbestos-containing materials (whether or not friable); urea-formaldehyde in any of its forms; polychlorinated biphenyls; oil; used oil; petroleum products and their by-products; lead based paint; radon; and any substances defined as "hazardous waste•, "hazardous substances•, •pollutants or contaminants•, •toxic substances", "hazardous chemicals", "hazardous air pollutants", or •toxic chemicals" under the CAA, CWA, RCRA, CERCLA, EPCRA, SDWA, TSCA, or OSHA.

( 4) "Environmental Hatter• shall mean any of the folloWillCJ: (a) the Release of any Hazardous Material on or at

YlltWa ....... ...

_,sq_

8001 210 PAGt 117

the subject Property or any other property; (b) the migration of any Hazardous Material onto or from the Subject Property; (c) the environmental, health or safety aspects of the transportation, storage, treatment, handling, use or Release, whether any of the foregoing occurs on or off the su~ject Property, of. Hazardous Materials in connection with the operations or past operations of the subject Property; (d) the violation, or alleged violation with respect to the Subject Property, of any Environmental Law, order, permit or license of or from any governmental authority, aqency or court relating to environmental, health or safety matters; (e) the presence of any underground storage tanks within the confines of the subject Property; (f) the presence of wetlands within the confines of the LandJ (9) the presence of any endangered species on, in or around the Land; (h) the characterization of the Subject Property as historical in nature in any way; or (i) soil, groundwater and surface conditions on, in or around the Subject Property which may have an adverse affect upon the use or value of the Subject Property.

(5) "Released Parties• shall mean, collectively, all of the following (to the extent applicable):

(a) The Federal Deposit Insurance Corporation ("FDIC") in any and all of ita various capacities; including as Receiver or Liquidating Agent of a financial institution.

(b) Grantor and all of the directors, officers, employees, agents, contractors, representatives, successors and assigns of Grantor and of each of the parties referenced above in this Paragraph (A)(5).

(B) Grantee acknowledges that Grantor has acquired the Subject Property due solely to the failure of a financial institution for which Grantor has the responsibility for liquidation, and consequently has little or no knowledge· of the condition of the subject Property and the surrounding areas. ACCORDINGLY, GRAI'IBB ACDOifLEDGBS AND AGRBIS 'l'D'r GRAH'IBI IS PURCHASING TIIB SUBJBC'I IROPIRft 11A8•1811

1 "WBBRII•18111 UD "lfXTB ALL

fAULTS" 1 QIUUI'rBB ACCBftl 1'IIB BUB-rBc:l IROPBRTY "aB•1811 , "WBBR!l•I811

ABD "W:t'IB ALL .AUL'IS," AIID GltAR'n:B •ua'IIIBR ACDOU.BDGBS UD AGRBBS !BA'l' GIWI'IOR BBRBIY BDRESSLY D:tSCLA:tKB AllY Aim .ALL :tHPL:tED WJUUUUt'l:tiJS COHCIJIUIUG 'fBIJ COHD:tt:tOII o• DB 8UB3Bct' PROIIRft 100) ANY IORt10N8 UIRIO. 1 1HCLUD:tHQ1 IU'l' BO'I L:OU:'IID '101 DB %HPL%1D 1fARDn118 o• DI1'1UIL%ft, IIDCIIABDIIL:tft OR .1DBBS lOR A IAR'I:tCULaa PURPOBB.

(C) Grantee acknowledges and agrees that Grantee has not relied upon any representations or warranties (oral or written) made by or purportedly on behalf of Grantor unless expressly set torth herein, and. baa not relied upon any documents or other information (oral or written) aupplied by or purportedly on behalf of Grantor.

YIIPiaiiiWIW liN

7 -· ~ - l~o-.

aool 210 PACt 118 (1) GUII'fBII UHDDSIIUDS aHD &Gll&BS fta., ~ DOCUJID'lS OR

IJD'OllHAT%011 IROVIDBD 110 GRNI'ID B'f GllAB'f01l OR Oil GRl\HTOR 1 8 BBDLI' BAVB BID OBDlHID ftOK A VlUlift'f OJ' SOURCBS, DVZ HO'I BBIH IHDDBHDBN'rLY IIIVBSTIGA'lBD OR VBRII'IBD BY GMR'l'Oll, AND ARB HOT 110 BB aELIZD UPON BY GRU'!BB Ill IOBCDSIBG TBB SUBJBCl' PROPERTY • GRAB'lOR IIAKBS HO BDitBSS RBPRBSBR'l'ATIONS OR 1fARilAHTIB8, A11D DISCUIHS UY UD ALL IKPLIBD WARRANTIES, CONCBJUIIHG DB ftU'nl, &CCUDC'f UD COHPLftDBSS OF ANY DOCUMENTS OR XHrORHATIOH SUPPLIED '10 GRAHTBB BY GRANTOR OR AHYOHB &CIIHG Oa IORPORTIHG TO ACT OH GIABTOR'S BEBALr.

(2) Gltltlft'IB MRIB8 TD., rl D8 DIVBSTIGl\TBD 'fBI SUBJBCT PROPERTY »m IS 81\TISI'IBD Wl'IJI ITS COliDITIOH, MD DB IIIDBPB!mmr.rt.Y VERII'IBD AllY IUOJUGTIOH PROVIDID BY CDl\NTOR, OR II' GRl\11'111 DB I'AIL2D 110 SO DVI:STIG&TB TBB SUBJECT IROPDTY AHD/OR DB I'AILZD OR BBBN UDBLB TO DDDDDEJrU.'f VBRift ANY 01' TBB IHFORKATIOH PROVIDED BY GRANTOR, GRAH!BB 1\GREBS TBAT ITS 1'1\ILURB TO INVBSTIGl\TB MID/OR VDlft DtrORH&TION IS AT ITS OWN RISK 1\HD IS ITS OD DBCISIOH I'OR DICB IT IS SOLELY RBSPONSIBLB.

(D) GRANTOR MA1tB8 HO RBPRZSDTATIOHS OR DIUlA!fTIBB, DPRBSS OR IIIPLIBD, COBCDBIHG AllY H&ftDS DJVOLVDCJ DB sUBJB= PROPBRft, BXCBPT TO 'l'BZ BX'l'mrl BDRBSSL'f PROVXDID IIIIUIDI. WI'l'IIOU'l' LDIITIHG DB GEHIRAJ.Ift 01' DB J'OREGOIHCJ, GRU1'Ma BBRBBY UI'DUIATIVBLY DISCt.l\DIS UY BDRBSS OR DULIBD RBPRUD'RTIOHS OR DIUlA!fTIBS CONCBJUaiiCJ UY OJ' DB I'OLLOWIHG 10\ftBRSI

(1) BXCBft U BDllBSSLY 8ft I'ORR BBRBDI, AllY DftBRB UI'BCTDG TITLB !fO DB SUBUct P1lOPDft1

(2) TBB CODLINICB OJ' 'IIIII SVBUC'I DOPBRft OR UY IORTIOH HBRBOI' UTB 1\!IY UD ALL UPL%CULB I'ZDBUL, SDTB UD LOCAL LAWS, OllDUIAHCBS1 IIRHIT8 1 RVLBS, U:GUUTIOHS OR RBQUIIUDUDI'IS, IHCL'IJJ)IHG, BU'I HO'I LIHITBD '!01 BIIVIROHKBHTAL LAWS;

( 3) !'811 SUI!'DILift OJl UPROHDifBHB88 OJ' 'fiiB 8UB3Cf IROPIR!Y OR AHr IORTIOH T.BIIZOI' I'OR I'V!URB DBVILOIKBHT OR RIHOVA'IIOH, DCLUDDIG, WIDOft LDIID'IIOH, DB DD, SISB, CAPACift, CUB n.cnr, BDBNSB81 DBnl.OPULII UD, OR I'OR TBB COHDUcn OJ' 1Uif USU OR ACTIVIIIIBB 'IDII GRAJiTZB DY BLBCT '1'0 COHDUC'l' BBRBOJII

( 4) DB COHDI'fiOH OJ' 'fD SOBJZC'I PROPBRft OR U'Y POR'l'IOH 'l'BZRBOI' IHCLUDIHG Wl'l'BOO'f LDilD'fiOH, DB DRJlB OR QUALift 01' COHS'l'RUC'IIOII, DBSIGH, OR IBGI!IBBRIHG OJ' AllY lJIPROVEHD'l'S; AND

(5) DftBRS.

'¥1IIWI ...... . ,. DB llliSBRCB OR USIRCB OJ' ale BHVIROlOIBH'fAL

76 -'vi-

bGOl 210 PACE 119 (Z) GRANTI:B1 J'OR ITSBLI' UD ITS BBIR8 1 SUCCBSSORS MD ASSIGNS

AND MYOHB ZLSB CLAIHIHG BY, lfllllOUGB OR UHDBR GRAHTOR, BBRBBY BIPRESSLY WAIV£S 'l'BZ CLAIMS AHD CAUSES OP AC'IIOH DBSCRIBBD BBLOW IH THIS PARAGRAPH (B) AS AGAINST GRANTOR OR TBB RBLEASBD PARTIBS (WIIBTBBR OR HOT SUCH CLAIMS OR CAUSZS OP AC'l'IOll ARB DOWN OR DISCOVBRABLI AS OP '1'81 DATB BBREOJ') AHD BSPRISSLY R2LBASE8 GRANTOR aND ALL RBLBASBD PAR'1'IE81 JOIH'1'LY AHD SBVERALI.Y, ROM AHY AND ALL LIABILITY BASBD Ill WJIOLZ OR Ill PART 1Jll011 AMY SUCH CLAIKS OR CAUSES OJ' AC'l'IOlll

(1) CLAIMS OR CAUSES OP AC'1'IOH BASED UPON ANY OF TBB MATTERS DESCRIBED IH PARAGRAPH (B), SUBPARAGRAPBS (1) A1ID (2) OF Pl\IU\GRAPB (C) OR SOBPARAGRAPBB (1) TBROUGB (5) OP Pl\IU\GRAPB (D) UOVB; AND

( 2) CLAIMS OR· CAUSES OP ACTION BASBD UOB ANY ACTUAL OR ALLEGED FAILURB BY CJU\NTOR TO SATISFY A DUTY TO DISCLOSB IHI'ORHATIOH '1'0 GRAHTBB COHCBUIHG '1'BB SUBJECT PROPERTY, IHCLUDIHG, Bft HOT LIMITID TO, IHI'ORHATIOH COHCBRHIHG THB PRESBHCI OP All! PATENT OR LATENT DBPEC'l'S, DBPICIEHCIBS Ill OR U'PBCTIHG '1'BB SUBJBC'l' PROPERft, OR '1'BJI PUSBHCB OJ' UY PAT~ OR LaTD'l' DVIROIOII!ITAL HAftBRS. .

(3) CLAIKS OR CAUSBS o:r ACTIOH BASED UPON GRAH'IOR BAVIHG INACCURATELY ST.a'l'BD AHI IHI'ORMATIOII COBCIRHIHG '1'BB SUBJBCT PROPERTY.

(F) Notwithstanding the parties'.intent that the waiver and release provisions contained in Paragraph (E) above bar all claims ancl causes of action by Grantee and Grantee's heirs, successors ancl assigns ancl anyone else claiming by, through or under Grantee, should a court of competent jurisdiction deem otherwise, Grantee agrees that the presence of the waiver and release provisions in Paragraph (E) above should serve as the overwhelming, primary factor in any equitable apportionment of rasponae costs under applicable federal, state or local lava, ordinances or regulations.

Yilllala ..... ....

77

\'

8001 210. 120 (G) Grantee aclcnowledges and agrees that the waiver and

release provisions contained in Paragraph (E) above are an essential component of the consideration for tbe sale of the Subject Property.

EXECUTED this ~ day of october, 1994 'at Milford, Connecticut.

STATE OF CONHECl'ICO'l'

COUNTY OP NEW HAVEN

CORPORATION DOeR BANK

By: __ ~~~--------~----~-----Name: Title:


SS: MILFORD OCTOBER tJ!' 1994

· Personally appeared Marla Berke-Schlesael, known to me to be the Attorney-in-Fact for the Federal Deposit Insurance Corporation as Receiver for Dollar Dry Dock Bank, known to me to be the person who subscribed the above instrument and actnowledqed that she signed the same as· bar free act and deed and the free act and deed of said Federal Deposit Insurance Co oration as Receiver for Dollar Dry Dock Bank, before me.

""s'sla ........ . ,.

78 -lu3-

STATE OF VIRGINIA

coUNTY or Allu.1114A.U

a001 210 rAG£ 121 ) ) . ss: )

OCTOBER .2t, 1994

Personally appeared luc#u6 r 'ti", r::m I known to ma to be the Ma"aee o Waynesboro Village, L.L.c., ·known to me to the person who subscribed the above instrument and acknowledged that she signed the same as his/her free act and deed and the free act and dead of said Waynesboro Village, L.L.c., before ••·

Yllsllll ...... liN

79

.. 8001 210 PAGE ··122

BXBIBI'r A (LEGAL DESCRIP'rZON)

Beginning at an 1zon in the south line of Shenandoah' Village Drive, said iron being tbe no~theast corner of a 4.000 Ac~e lot owned by BMC Prop., DB 160 PG 5171 Thence, leavift9 said drive and with two lines of the said lot s 19• 07' 49" B 255.91' to an ironr Thence, s 69• so• 35" w 524.79' to and iron, a common corner between the said lot, the Moss-Henderson Property, DB 161 PG 461 and the herein described landJ Thence, leaving the said 4.000 Acre lot and with 7 lines of the said Moss-Benclerson Property S &7• 21' 46 11 B 256.61' to an ironr Thence, s 57• 47' 1611 B 313.79' to an ironr Thence, N a&• 48' 31" w 187.07 1 to aD ironr Thence, s 3. As• 53" w 125.65' to an iron; Thence, S 42• 33' 27" W 170.72 1 to an. iron, ~hence, S 21. 28' 10" w 324.56' to an·ironr Thence, s sa• 03' 46" w 110.86 1

to an old iron in concrete at a large fence post a common corner between the said Moss-Henderson Property, Garvey and the herein described land, said old iron.also being a· corner to the Corp. line of the City of Waynesboro' Thence, leaving the said Moss-Henderson Property and with Garvey and with 5 lines of the said Corp. line, S 22• 37' 08" W 963.93' to an iron in the line of nov or formerly Garvey and a corner to Breuerr Thence, leaving Garvey and with 2 lines of said Breuer, s s&• 59' 05" B 360.85 1 ·to a metal fence postr Thence, S 1a• 43' 34" W 184.08' to a concrete monument in the line of said Breuer and a corner to Quillen at alJ Thence, leaving said Breuer and with the line of said Quillen s 74• OS' 23" B 2237.07 1 to a fence post, a come~ to Quillen and in the line of Nelson (Nee Craig)J Thence, leaving said Quillen and with said Nelson N 22• 43 1

45" E, pas•ing a common corner between said Nelson, tho said Corporation line and a come~ to land ovned by the city of Waynesboro, a total of 993.94' to an i~nJ Thence, continuing with the said land following 3 mo~e of it'a lines, s 14• 35' 15" B 415.20 1 to an ironr Thence, N 66• 14' 50" B 579.91 1 to a point from which a·fence post bears N 43• 37' 59• W 5.01'J Thence, H 57• 29 1 44" W 239.40' to. an iron in the aouthwest line of said Shenandoah Village Drivel Thence, leaving the aaid land and with 12 lines of said drive N 67~-G7' 19" W 657.95' to the point of curva~ure of a curve to the left having a central angle of 4• 11 1 43• and a radius of 1115.92'J Thence, vitb said curve 81.71' ~o the point of tangentJ Thence, H 11• 49 1 02" W 418.03' to the point of curvature of a curve to the right having a central angle of 77• 44' 12~ and a ~adius of 439.2&'J Thence, vitb said curve 595.97' to the point of tangentJ Thenca, M 5• 55 1 10". Z 360.67' .to the point of curvature of a curve to the left having. a central angle of so• 35 1 25" and a ~adlua of 379.26'J Thence, vith said curve 334.87' to the point of tangencyJ 'rbence, H 44• 40' 15" W 182.19 • to the point of curvature of a curve to the left having a cent~al angle of 43• 28 1 ss• and a radius of 302.10'1 Thence, vitb aaid cQ'Ve 229.26 1 to tbe point of reV.rae curve having e centJ:a1 -=--:-··' angle of 31• 54• 41• and a radias·of 841.26'1 Thence, vitb said c~ .468.55.' to the poiDt of reserve cane baving a cedtral angle of fiJ• 08' 00~ aad a radlu. of 251.5''' ~~ce, vitb aaid curve 277.11 1

to the point of taDgency1 'fbence, s •o• 37 1 31• w· 228.72' to the point of curvature of a ·carve to the right baving a central angle of 14• 31' 41" and a radius of 150.00'1 Thence,•witb aaid curve 38.04' to the point of beginningr containing 135.801 ac~ep and being in all respect• the exact same property aa •bovn on a £1at entitled "Physical Survey Wayneaboro Village Factory OUtleta for FDIC a• receiver for·the Dolla~ Dry Doek Bank, dated OCtober 6, 1994 and prep~ed by Tom &humate Surveyo~, %nc.·of Wayne•boro, Vl~ginia

80

BQOl 210 PACE 123 EXHIBIT B

Pennittcd Bnc;umbranm

l. Taxes for the last half of 1994 and all subsequent years.

2. Right of way granted Columbia Gas Transmission Corp. by instrument daled February 24, 1978 of record in Deed Book 698, Page 449.

3. Easement granted Vepco by iosttUment dated March 26, 1968 of record in Deed Book 537, Page 26.

4. Easement granted Virginia Electric and Power Company by instrument dated March 11, 1988 of record in Deed Book 152, Page 4.

5. Easement granted Clifton Forge-Waynesboro Telephone Company by instrUment dated April 29, 1988 of record in Deed Book 152, Page 570.

6. Easement granted Clifton Forge-Waynesboro Telephone Company by inscrument dated October 26, 1988 of record in Deed Book 156, Page 130.

7. Easement granted Moss Henderson Partuen by instrument dated August 9, 1989 of record in Deed Book 161, Page 459.

8. Easement granted City of Waynesboro by iDstrument daced June 23, 1989 of record in Deed Book 160. Page 509.

9. Possible limited access to and from Route 340 by property described under Exhibit A hereof.

10. Rights of others in aDd to the colllinued UDinterruptcd flow of the spring crossing insured premises.

11. Plat of survey by Thomas E. Shumate, CLS. dated October 6, 1994 which discloses the following:

L overbead power line, guy and pole. b. Old unused frame building 10 X 23 encroaches onto pr .. rty c. Small joint enuance drive for this property and laDd owned by BMC d. 20 ft. sanitary sewer easemenL e. paved walk to Moss-Headenon Property conaects to this property. f. drainage ditch/swale I· eacroacbment into Shenandoah Village Drive by sign appurtenant to .

iasurecl property

81. -If~~-

.. Exhibit B (continued)

!!IGl 210 PACE 124

h. possible 35 ft. wide ingress/egi'css euemem from said premises to Moss-Henderson property.

i. 20• gas line with the 50 ft. gas line easement . j. old farm fences do not coincide wilh prcperty lines

12. Other state of facts as would be dJsclosed by a current accurate survey and physical inspection of the premises.

13. Notes as shown on survey entitled •physical Survey Waynesboro VUlage Factory Outlets Waynesboro, Virginia• prepared for FDIC as Receiver for the Dollar Dry Dock Bank Scale 1• 111 200' dated October 6, 1994 by Tom Shumate Surveyor, Inc.

14. Rights of tenants in possession.

15. Any lien or right to a lien for services, labor or material, heretofore or hereafter furnished, imposed by law aud shown or not shown by the public records.

16. Financing Statement dated May 17, 1994, FUe No. 94-71. Secured Party: First Union National Bank of Virginia securing the property located on the store premises in the Waynesboro Outlet VWage in the City of Waynesboro, designated as STORE NO. 3A.

BZ

YIRGINI~· IN TIE CLERK'S OFFICE tF

WAYNESBORO CIRCUIT COURT ON THE 28TH lJAV fE

OCTOBERt 1994 AT 12:23Pf1 INSTRU~tENT 1940092499 WAS RECEIVED AND

UPON CERTIFICATION OF ACI<NOWLEDSEMENT TH£RETO ANraEJJt ADMITTED TO RECORD.

THE STATE TAX UIPOSED BY SEC. 58 .1-882 OF l1£ VIRGINIA CODEt HAS BEEN PAID IN THE AMOtm OFI S .88 STATE: 1.88 LOCP.ll S.89 TESTE: lEAtlETTE J. AKERS

(a.ERJ< CF CIRCUIT COURT>

BYI + ltl rf,_} D.C.

- tu1-

'HERSON.

~OS.LC.

iATLAW

VIRGINIA

1287



Plaintiff

v. ORDER CH95000143-00

BMC PROPERTIES, ET AL.

Defendants

On December 10, 1996, this matter carne to be heard on the

plaintiff's motion to vacate the decree entered on November 20,

1996, on the memorandum filed as a part of the motion, and on

objection of the defendant.

Upon consideration whereof, the Court being of the opinio

that there is no merit to the plaintiff's motion, it is ADJUDGE

and ORDERED that the motion to vacate

ENTER:

Cliarles L. Ricketts, Allen and Carwile P.O. Drawer 1558 Waynesboro, Virginia 22980

DATE:

counsel for the defendants

Seen and objecte to on the grounds set forth in the memorandu filed with the ion to vacate:

--~-~ .

V~V. Ludwig, Esquire, counsel for the plaintiff Nelson, McPherson, Summers & Santos P.O.Box 1287 Staunton, Virginia .24402-1287

83

-/~tg-

iON McPHERSON.

ERS a SANTOS. L..C.

'TOAI'tEYS AT LAW

AUNTON VIRGINIA

2••oz.12e7

VIRGIJIIA: IJI TBB CIRCUIT COURT 01' TBB CITY 01' WAYNESBORO

WAY.HBSBORO VILLAGE, L.L.C. ) ).

Plaintiff ) )

v. ) CH95000143 )

BMC PROPERTIES, et al. ) )

Defendants )

JIOTICB 01' APPEAL

The Plaintiff, Waynesboro Village, L.L.C., hereby gives

notice of appeal to the Supreme Court of Virginia from the final

judgment order of this court entered on the 20th day of November,

1996. As required by Rule 5:9 (b) of the Rules of the supreme

Court of Virginia, the Plaintiff states that it intends to file

a statement of Facts, Testimony or Other Incidents of Trial in

this case.

By:

Waynesboro Village, L.L.C.

?;~y~ /tfrj'10Cfo~

~~~~~~~ Santos, L.C.

24402-1287

CBRTIPICATB

I, Victor v. Ludwig, counsel of record for Waynesboro

Village, L.L.C., hereby certify that:

1(;1-

lcPHERSON.

SANTOS. L.C .

. YS AT I.AW

N. VIRGINIA

12·1287

1. The name and address of the appellant is:

Waynesboro Village, L.L.C. 601 Shenandoah Village Drive Box 1-B Waynesboro, Virginia 22980

2. The name, address, and telephone number of counsel for appellant is:

Victor v. Ludwig, Esquire Nelson, McPherson, Summers & Santos, L.C. P. o. Box 1287 Staunton, Virginia 24402-1287 (540) 885-0346

3. The names and addresses of appellees are:

B. M. c. Properties Serve: John A. Conrad Registered Agent 5500 Toddsbury Road Richmond, Virginia 23226

Bank of Essex Serve: Alexander F. Dillard, Jr., Registered Agent Ritchie House Prince and Cross Streets Tappahannock, Virginia 22560

Alexandra F. Dillard, Jr., Trustee Ritchie House Prince and Cross streets Tappahannock, Virginia 22560

Earl R. Johnson, Trustee Ritchie House Prince and Cross Streets Tappahannock, Virginia 22560

4 • The names, addresses, and telephone numbers of counsel for appellees:

Charles L. Ricketts, III, counsel for B.M.C. Properties Allen & Carwile, P.C. P. o. Drawer 1558 Waynesboro, Virginia 22980 (540) 943-8200

ON. McPHERSON.

:RS a SANTOS. L.C.

rOANEYS AT LAW

•UNTON. VIRGINIA

z••oz,tza7

Scot A. Katona counsel for Bank of Essex, Alexander F. Dillard, Jr., Trustee Earl R. John~on, Trustee Dillard and Katona, P.O. P. o. Box 356 Prince and Cross Streets Tappahannock, Virginia 22560 (804) 443-3368

5. A copy of this notice of appeal has been mailed or delivered to all opposing counsel and to the Clerk of the Supreme Court this 18th day of December, 1996.

86

- 171·

lltc:PHERSON.

1 SANTOS. L.C.

EYS AT LAW

)N VIRGINIA

02·1287

VIRGINIA: IR TBB CIRCUIT COURT OP TBB CITY OP WAYNESBORO

WAY.HBSBORO VILLAGB, L.L.C. ) )

Plaintiff ) )

v. ) CH95000143 )

BMC PROPERTIES, at al. ) )

Defendants )

AKBRDBD ROTICB OP APPEAL

The Plaintiff, Waynesboro Village, L.L.C., hereby gives

notice of appeal to the Supreme Court of Virginia from the final

judgment order of this court entered on the 20th day of November,

1996. As required by Rule 5:9 (b) of the Rules of the supreme

Court of Virginia, the Plaintiff states that it intends to file

a Statement of Facts, Testimony or Other Incidents of Trial in

this case.

Waynesboro Village, L.L.C.

By:~L Of Counsel

\_ victor v.' Ludwig, Esquire Nelson, McPherson, Summers & Santos, L.C. P. o. Box 1298 Staunton, Virginia 24402-1287

CBRTIPICATB

I, Victor v. Ludwig, counsel of record for Waynesboro

Village, L.L.C., hereby certify that, having filed this notice of

appeal on the 18th day of December, 1996, but later having

discovered that, due to clerical error, copies were not mailed to

87

- /7,t-

,. McPHERSON.

S 6 SANTOS. L..C

•A"'EYS AT LAW

.. TON VIRGINIA

!••02·12117

one other counsel of record as represented therein, I refiled

this notice of appeal on December 19, 1996 and have this date

mailed true and correct copies of the foregoing ~otice of appeal

to scot A. Katona, Esquire, Dillard and Katona, P.D., P.O. Box

356, Prince and Cross Streets, Tappahannock, Virginia 22560; John

A. Conrad, Esquire, sands, Anderson, Marks & Miller, P.O. Box

1998, Richmond, Virginia 23218-1998, and Charles L. Ricketts,

III, Esquire, Allen and Carwile, P.O. Drawer 1558, Waynesboro,

Virginia 22980.

~-( Victor V. Ludwig

88 173-

VIRGINIA:

IN THE CIRCUIT COURT OF THE CITY OF WAYNESBORO

WAYNESBORO VILLAGE, L.L.C. I ) )

Plaintiff, ) }

v. ) CH95000143-00 )

BMC PROPERTIES, et al., } }

Defendants. )

STATEMENT OF FACTS

On December 21, 1995, plaintiff Waynesboro Village, L.L.C.

(WV) filed a Bill of Complaint in the Circuit Court of the City

of Waynesboro seeking a declaratory judgment to interpret the

meaning of a restrictive covenant, praying that the Court

determine that the restrictive covenant was not enforceable to

prohibit specified uses of certain real estate owned by wv. On January 24, 1995, defendant BMC Properties (BMC) filed a

Cross-Bill against the plaintiff WV requesting that the Court

confirm the original interpretation intended by the parties·and

that if the Court render any decree or judgment pertaining to the

efficacy of these covenants or the intent of the parties, then

the Court declare the interpretation and/or intent of both

covenants applicable to BMC and WV.

Shenandoah Village Associates, L.P. (SVA), a predecessor in

title to WV, was the original developer of a retail shopping mall

known as Shenandoah Village. By deeds of trust (a) dated

February 11, 1988, recorded in the Office of the Clerk of the

Circuit Court of the City of Waynesboro (the Clerk's Office), in

Deed Book 150, page 806, and (b) dated May 23, 1990, recorded in ·;::--.. ~·· t.: _ l:iN~'s offiCI of the Circnfi

.... _. :.:: ·,:_i•lestoro Ctty q_ •'fl..

~ror-M2 ~-. ... ~Lf•'"J ~~t·-::~

89

_ I(; 1-

the Clerk's Office in Deed Book 168, page 137 (collectively, the

Deeds of Trust), SVA conveyed certain real estate, in trust, to

secure an indebtedness due to Dollar Dry Dock Bank.

On May 11, 1989, BMC and SVA entered into an Agreement for

Purchase and Sale of Real Estate, a copy of which was attached to

BMC's Responses to Interrogatories and incorporated hereto.

Subsequent to the recordation of the Deed of Trust, there

was recorded a certificate of partial release for certain

pro~erty to be conveyed by SVA to BMC, and by deed dated June 20,

1989, recorded in the Clerk's Office in Deed Book 160, page 517

(attached as Exhibit A to plaintiff's Bill of Complaint), SVA

conveyed to BMC a 4-acre tract of land, fronting on Route 340 at

or near its intersection with Interstate Route 64 (the BMC

Property) . That deed contained the following restriction on the

remaining property owned by SVA (the Restriction) :

The party of the first part [SVA] covenants and agrees kmBt (i) not to sell any remaining portion of the property which it acquired from Royal Oaks Investment Corporation for the use as a motel, hotel, inn or lodging business of similar facility, (ii) not to allow any remaining portion of the property which it acquired from Royal Oaks Investment Corporation to be used, constructed or improved as a motel, hotel, inn, or lodging business of similar facility, and (iii) that no such lodging facility or business shall be allowed to operate or exist within the boundaries of its remaining property. This restriction shall apply for so long as the property herein conveyed to the party of the second part is being used as a motel, hotel, inn or lodging business of a similar facility. Upon discontinuance of such use, this restriction shall expire.

2

90 ... ,q;;..-

Also included in the deed to BMC was the following restriction on

the use of the BMC Property:

The partyt~~tthe second part [BMC] covenants and agreegf\1) no factory outlet or discount retail stores or gas station, (ii) no drivein or fast food restaurant, including but not limited to a McDonald's, Burger King, Wendy's or Roy Rogers, (iii) no free-standing restaurant, except a free-standing non-drivein restaurant, which is being operated while a motel, hotel, inn or lodge is located or operated on the property herein conveyed, and (iv) no other use not permitted by any master plan adopted (whether now existing or hereafter adopted) and any amendments thereto by the City of Waynesboro shall be constructed or operated on the property herein conveyed or any portion thereof. This restriction shall only apply for so long as any portion of the remaining property owned by the party of the first part is being used as a factory outlet and/or discount retail stores. Upon discontinuance of such use this restriction shall expire.

(In the Agreement for Purchase and Sale of Real Estate executed

by SVA and BMC on lfay 11, 1989 the parties agreed to the

restrictive provisions.)

By Deed of Trust dated October 19, 1994, which Deed of Trust

recorded in the Clerk's Office of the Circuit Court of the City

of Waynesboro in Deed Book 209, page 808, BMC conveyed the BMC

Property to defendants Alexander F. Dillard, Jr., and Earl R.

Johnson, Trustees, to secure payment of an indebtedness to the

defendant Bank of Essex ("Bank").

At the time of SVA's conveyance of the BMC Property to BMC,

the property which would later be conveyed to WV had already been

developed as a factory outlet shopping center.

3

91.

- ;q3-

After the conveyance by SVA to BMC, the Federal Deposit

Insurance Corporation (FDIC) exercised its rights to take control

of Dollar Dry Dock Bank as receiver. By deed dated October 21,

1993, recorded in the Clerk's Office in Deed Book 198, page 535,

the remaining portion of the SVA Property was conveyed to the

FDIC.

By deed dated October 28, 1994, recorded in the Clerk'~

Office in Deed Book 210, page 115, the FDIC, as receiver for the

Dollar Dry Dock Bank, conveyed 135.801 acres (the WV Property) to

WV without reference to the Restriction.

BMC's business is the ownership, development, and operation

of lodging facilities, and it currently plans to develop the BMC

Property as a motel with a restaurant as allowed by the

restrictive covenants.

BMC spent

$350,000.00 to purchase the land in question and has spent at

least $93,683.00 on surveyors, architects, soil engineers,

attorneys and engineers in planning and preparing the BMC

Property for construction of a motel. BMC incurred interest

expense and other debt and service expenses in financing a

portion of this cost. BMC has spent considerable time and

incurred additional expenses (e.g. $5,611 in legal expenses) to

secure a loan in the amount of $418,000.00 to finance the cost of

the acquisition of the BMC Property and a loan in the amount of

4

9Z

$1,000,860.00 for the cost of constructing a motel on the BMC

Property.

BMC has acknowledged in its discovery responses (a) that it

has no knowledge that either SVA or WV knew of any time or money

expended by BMC to develop the BMC Property, other than the

purchase price, (b) that there is no lodging facility located on

the BMC Property and (c) that a specific dated has not been

determined for the commencement of construction of such a

facility.

On October 2, 1996, a hearing was held before the Honorable

Rudolph Bumgardner, III, Judge, on BMC's Motion for Summary

Judgment. After consideration of the pleadings, the legal

memoranda previously submitted by counsel, BMC's Responses to

Plaintiff's Interrogatories, the Agreement for Purchase and Sale

of Real Esta~e, and the argument of counsel, the Court announced

its ruling as follows: that no fact in this cause is genuinely

in dispute; that the restrictive covenant which is the subject

matter of this cause is not ambiguous and can be interpr~ted from

the deed in which it is contained; that the intent of the parties

to the original deed containing the restrictive covenant was to

protect their respective interest in the future and that the said

covenant was prospective; that to interpret the restrictive

covenant otherwise would be to render the agreement of the

original parties meaningless; that BMC's Motion for Summary

Judgment would be granted; that the Bill of Complaint would be

dismissed, and that the restrict covenant prohibiting the

5

93

-t1s--

plaintiff from using its property as a motel, hotel, inn or other

lodging business, as set out in a deed from SVA, a limited

partnership, to BMC dated June 20, 1989 and recorded in the

Clerk's office of the Circuit Court of the City of Waynesboro,

Virginia in Deed Book 160 at page 517 is an enforceable

restrictive covenant prohibiting plaintiff from the uses

aforesaid. On November 11, 1996, an Order was entered

memorializing the Court's ruling on BMC's Motion for Summary

Judgment.

We Ask

John A. Conrad Robert B. Delano, Jr. SANDS, ANDERSON, MARKS & MILLER P. 0. Box 1998 Richmond, Virginia 23218-1998

ord for the Properties

Charles L. Ricketts, III Allen & Carwile P.O. Drawer 1558 Waynesboro, Va. 22980 {703) 943-8200

6

Seen:

Victor V. Ludwig 4 ==

NELSON, MCPHERSON, SUMMERS & SANTOS, L.C. P.O. Box 1287 Staunton, Va. 24402-1287

Counsel of Record for the Plaintiff Waynesboro Village, L.L.C.

Seen:

Scot A. Katona DILLARD AND KATONA, P.D. P.O. Box 356 Prince and Cross Streets Tappahannock, Va. 22560

Counsel of Record for Defendants Bank of Essex, Earl R. Johnston, Trustee and Alexander F .. Dillard, Jr., Trustee

7

9 ·-;:,

-141--

Assignments of Error

1. The Court erred either in its determination that a

certain deed restriction (defined in the Statement of Facts,

hereafter referred to as the "Restriction") is not ambiguous

or in its determination that the correct interpretation of the

Restriction is that it currently restricts the plaintiff .using

its land for the development of a hotel, motel, or other

lodging facility.

2. The Court, acting as a court of Efquity, erred in

applying the Restriction to restrict the plaintiff from using

its land for the development of a hotel, motel, or other

lodging facility.

3. The co·urt erred in its determination that the

Restriction is. not invalid pursuant to the D' Oench Duhme

doctrine.

4. The Court erred in its determination that the

Restriction language is not invalid because SVA (defined ia

the Statement of Facts) did not possess the necessary capacity

to convey an interest in what would become the WV Property

(defined in the Statement of Facts) .

96

answer to cross-bill, filed february 15, 1996

Documents