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1 . RIHARD J. JAMIIOASKY F. BRUE BAH QUINLAN H. HANOK J. HOWE BROWN JAK B. STEVENS THOMA& A. FORTl<OAT MIHAEL P. McWEENY ROSEMARIE ANNUNZIATA THOMAS S. KENNY MARUS D. WILLIAMS <3ERALD BRUE LEE STANLEY P. KLEIN ROIERTW. WOOLDRIDGE, JR. AR'TMUR 8. VIEREGG, JR. JANE MARUM ROUSH JUDGES t...,t- T. rftr.:: r-::.::. =~-- ~.. -,f1',,r,. '. ~' NINETEENTH JUDIIAL IRUIT OF VIRGINIA 't :l.<,-.:... ~ :~. ; :'.: : NB~To~s1ggj3 Fairfax ounty Judlclal enter 411 O hain Bridge Road Fairfax, Virginia (703) 24&-2221 OUNTY OF FAIRFAX Fu: (703) ITY OF FAIRFAX ' t (= :4 '\:..'.._-~ J Ut ---l. -./ " -..., ' J...J L....,,. - - ~. ~ _.,,, "' DR. MARK A. ZAFFARAHO DIRETOR, JUDIIAL OPERATIONS JAMEBl<Em4 LEWIS D. MORAIS BURH MILJ..SAP IIARNAAD F. JENNINQI l WIS H. GAtFFITH WILLIAM 3. PLUMMER THOMAS J. MIDDLETON RETIRED JUDGES Frederick H. Goldbecker, Esquire Box 517 Fairfax, Virginia Raymond J. Diaz, Esquire Rees, Broome & Diaz 8133 Leesburg Pike, Ninth Floor Vienna, Virginia Re: Dear ounsel: constance Gontis Olson Y, Rotonda condominium unit owners Association, Inc., This suit for an injunction was initiated by petitioner onstance G. Olson ("Olson"), an owner of a unit in a Fairfax ounty condominium known as "The Rotonda," against the respondent Rotonda ondominium Unit Owners Association, Inc. ("Association") 1 She contends that the Association's board of directors unlawfully enacted rules (i) permitting the destruction of audio tapes from which board of directors meeting minutes were prepared, and (ii) prohibiting the videotaping of board of directors meetings. The Association contend that the adoption of such rules was not unlawful. Facts A hearing was held on September 23, 1993 with respect to Olson's petition for an injunction. At the hearing, the petitioner contended that there ware no facts in dispute and that the controversy between the parties was governed by the rules 1 The Association is a non-stock, nonprofit corporation created pursuant to Section of the oda of Virginia to govern The Rotonda.

2 - Olson v, Rotonda condominium unit Page 2 promulgated by the board of directors. evidence at the hearing. Olson introduced no The Association, however, elicited testimony from Judy Light, its president, that an Association employee was charged with the responsibility of audio taping the Association's board of directors meetings and preparing board minutes from those audio tapes. She further testified that the tapes were maintained at the Association's offices; that upon request, the tapes were available to unit owners to listen to; and that if unit owners had the appropriate equipment, they also might copy the tapes. Light testified that the board had adopted a policy of destroying such audio tapes after board minutes were prepared from the tapes and approved by the board. Ms. Light also testified that the agendas for board of directors meetings were posted on bulletin boards around the condominium; and summaries of board actions were likewise posted and also published in a monthly newsletter distributed to unit owners. She testified that no unit owner had ever asked to listen to an audio tape of a board meeting. At the September 23 hearing, Ms. Light also testified that in August 1993, several unit owners appeared at a board of directors meeting and began to videotape the. board proceedings. She indicated that several board members expressed discomfort at the videotaping. Sha further indicated that she personally had not made remarks about a contract dispute involving the condominium because she was afraid that her remark might be the basis of a lawsuit against her. At the next board of directors meeting, the board voted to prohibit videotaping of board meetings. The board of directors also formalized their audio tape policy by voting that audio tapes used for the preparation of minutes would be destroyed after the board of directors meeting minutes had been prepared and approved. 2 In the course of her testimony, the Association's articles of incorporation, its bylaws and the public offering statement of The Rotonda were all introduced without objection. 2 Another board member, Jannath Farlay, testified regarding the board's action prohibiting videotaping. Ha testified ha had voted in favor of the rule because he felt intimidated by the videotaping. He stated that he felt ha might end up on the "evening news."

3 I. Olson v, Rotonda condominium unit owners Ass n, Inc. Page 3 ouestion1 Presented This case presents two issues: whether or not the board of directors of the respondent unit owners association, a non-stock corporation, has the authority pursuant to the Virginia ondominium Act, or otherwise, to promulgate rules: 1. Authorizing the disposition of audio tapes of board meetings created by an employee of the corporation for the purpose of preparing minutes of those meetings. ("Audio Tape Issue"). 2. Prohibiting the videotaping of board meetings. ( "Videotape Issue"). Decision A, The Audio Tape Issue At the September 23 hearing, Olson argued that Section :1 of the oda of Virginia (Supp. 1993) required the Association to make condominium records available for review by all unit owners; that the audio tapes constituted such records; and therefore that, by necessary implication, the Association was prohibited from destroying such records. She relied upon the following portion of the statute in support of her argument: All such record, minutes of the meetings of the unit owner association and the executive organ, and any other records pertaining to the condominium, shall be available for exaaination by all the unit owners and contract purchasers of a unit in the condominium at convenient hour on working days that shall be set and announced for general knowledge. Va. ode Ann. S :1 (Michie Supp. 1993). At the conclusion of the hearing, this ourt rejected Olson's audio tape argument and vacated the temporary restraining order earlier entered by this ourt enjoining the Association from destroying audio tapes in accordance with its record retention policy. While the foregoing statutory language requires the Association to make extant records available, it neither expressly nor implicitly precludes the Association from adopting a reasonable records retention policy. If Olson argument war adopted, this ourt would be required to

4 I. Olson v, Rotonda condominium unit. Page 4 find that, by its enactment of the above quoted statutory language, the General Assembly intended that a unit owners association be required to maintain in perpetuity any piece of paper or celluloid tape produced in connection with that association s business. This court will not attribute such a fanciful interpretation to the otherwise straightforward statutory language froviding that existing records be made available to unit owners. As the court stated in Watkins y, Hall, 161 Va. 924, 930 (1934): [w] hile in the construction of statutes the constant endeavor of the courts is to ascertain and give effect to the intention of the legislature, that intention must be gathered from the words used, unless a literal construction would involve a manifest absurdity. Where the legislature has used words of a plain and definite import the ~ourts cannot put upon them a construction which amounts to holding the legislature did not mean what it has actually expressed. In this, case, the interpretation advanced by Olson is not supported by the statutory language, and it would result in "a man if est absurdity." e, The Videotaping Issue Olson s second contention, that the Association could not prohibit videotaping, must also be rejected. It is premised on the following keystone assumption: [B]ecauae the condominium concept arises from a statute in derogation of common law, a condominium association has only thoaa powers expressly granted to it by the act creating it; here, the Virginia ondominium Act. Mem. at 3-4 (emphasis added). In effect, Olson claims (1) that had the General Assembly intended to empower condominium associations to proscribe the videotaping of board meetings, it would have, Of course, had the General Assembly intended that all condominiwa records be kept, it would have said so. See, e.g., section of the oda of Virginia (1993) requiring corporate minutes to be maintained as "permanent records."

5 Olson v, Rotonda condominium unit Page 5 (_ expressly said so; (2) no such power is expressly granted by the General Assembly to unit owners' associations; and therefore (3) unit owners associations are not authorized to preclude the videotaping of its board meetings. The fundamental flaw in this argument is obvious. It fails to recognize that the Act, like all legislation, may empower not only by express p~ovision but also by necessary implication. As the supreme ourt of Virginia declared in Norfolk s, Ry, co, v, Lassiter: 'A statute often speaks as plainly by inference, and by means of the purpose that underlies it, as in any other manner. A policy that is clearly implied is as effective as that which is expressed. The statute should have a rational construction consistent with its manifest purpose, and not one which will substantially defeat its object. A case not within the letter of a statute may be held to be. within its meaning, because it is within the mischief for which a remedy is provided.' 193 va. 360, 364 (1952) (quoting Leitner v, citizens cas, co,, 135 N.J.L. 608, 52 A.2d 687, 690, 171 A.L.R. 546, 549 (1947)). Olson relies on hesapeake Hausa v, Virginia Nat'l BanJc., 231 Va. 440 (1986), in which the Supreme ourt of Virginia declared that the Virginia scheme governing condominiwa associations, then in effect, did not vest a unit owners' association with the authority to maintain actions for alleged defects in a condominiu11'a common elements. The ourt reviewed the relevant statutes, but nowhere in its decision did it negate the proposition that the powers of a unit owners association must be created by express provision and not by necessary implication. The hesapeake decision, therefore, does not control this case. The Virginia condominium Act clearly intends that condominiwa unit owners may both incorporate their unit owners association and elect to have an executive organ for management purposes. Va. ode Ann. s (A), (B) (Michie Supp. 1993). It further provides that the power delegated to that executive organ will be set forth in the association's bylaws. 1sL. In the present case, the Association's bylaws state: section 2. Power and Duties. The Board of Directors shall have all of the powers and duties necessary for the administration of the affairs of the

6 I ' Olson v. Rotonda condominium unit Page 6 Unit Owners Association and may do all such acts and things as are not by the ondominium Act, the Declaration or by these Bylaws required to be exercised and done by the Unit owners Association. Defendant's Exhibit 2. This broad grant of powers affords the Association's board authority to set reasonable rules for the conduct of its business. The allowance or disallowance of videotaping falls within the ambit of such authority. 4 Similarly, although not expressly empowered to do so in the condominium Act, the board also might adopt Roberts Rules of Order to conduct its meetings. Olson's argument would preclude the use of such rules because they are not specifically referred to in the ondominium Act. When the ondominium Act is read as a whole, it is clear that the General Assembly did expressly authorize unit owners to use the corporate form to govern condominiums,.11. Jl Va. ode Ann. S (Michie supp. 1993), but it did not attempt to prescribe how such corporate business would be conducted. Under such circumstances, the necessary implication is that the General Assembly intended that such matters, like rules governing the conduct of board meetings, would be addressed in the Association s bylaws. The Association's bylaws specifically delegated to the board of directors the power to make rules regarding the conduct of board meetings. The rule prohibiting videotaping is a reasonable exercise of that delegated authority. c, Tb constitutional Argument In addition to the foregoing arguments of statutory construction, Olson contends that the rules promulgated.by the board of directors violated her constitutional rights. She claims that if the authority to promulgate those rules is authorized by the laws of the ommonwealth (as this court has found they were), then the rulemaking constitutes state action giving rise to constitutional scrutiny. State action, however, is not at issue in this case. In a case where the stat heavily regulated an electric 4 As the respondent has demonstrated, the General Assembly intended that unit owners be accorded "a great deal of flexibility" in addressing their shared concerns including those of governance. ~ Report of the ommittee to study and Recommend Revision of the ondominium Laws, House Document No. 5, 11 (1973).

7 I 01son v, Rotonda condominium unit Page 7 company and a state commission approved the private utility's regulations, the United States supreme ourt in Jackson y, Metropolitan Edison, 419 u.s. 345, 351, 95 s.ct. 449, 453 (1974) declared that [t]he mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment. Likewise, the United States District ourt for the Eastern District of Virginia found no state action under the Virginia onstitution where the number and location of dialysis centers in Virginia was determined by the state in accordance with statutory guidelines. Greenspan v, National Medical care, Inc,, 485 F. supp. 311 (E.o. Va. 1980). Olson's argument that Virginia's regulation of condominium associations constitutes state action fails, an4 therefore she is not entitled to constitutional scrutiny of the board of director's rulemaking. Mr. Diaz is requested to prepare a decree dissolving the temporary injunction earlier entered in this case and dismissing this cause with prejudice; to present the decree to Mr. Goldbecker for endorsement; and to file it with the 'a off ice for presentation to me for entry. (~