'Here to stay': But lawsuit and foreclosure cloud Kluge's dreams

news-kluge-moses-spec-houseOn the block: the first homestead in Vineyard Estates, developed by William Moses and Patricia Kluge.

With a looming foreclosure of its only spec house and a $2 million lawsuit against it, Patricia Kluge's Vineyard Estates subdivision seems to be pumping out sour grapes instead of sales.

"If Vineyard Estates breaches the contract, they have to pay the full commission," says Brock Green, attorney for real estate broker Frank Hardy, who alleges in lawsuit that Vineyard Estates breached its listing contracts and now owes nearly $1.9 million in commission his firm would have reaped had it sold all the lots.

Back in 2003, wine-making philanthropists Kluge and husband William Moses envisioned the 511-acre Vineyard Estates as luxury villas in the midst of grapevines and orchards. After their bold concept of interweaving mansions with vineyards fell afoul of neighbors and Albemarle County zoning laws, the couple ended up performing a simpler by-right division of 24 lots. Frank Hardy signed two listing agreements for the million-dollar-plus lots in 2007 that were to expire about a year and a half later.

According to Hardy's suit, filed about a year ago in Albemarle County Circuit Court, his firm "diligently, professionally, and aggressively" pursued leads but met with resistance not only from buyers but from Vineyard Estates. Notably, the suit claims, Hardy was not permitted to enter the properties in the MLS, a searchable system but one sometimes considered too proletarian for upper-echelon estates.

The suit alleges that when Hardy refused to release Vineyard Estates from the contract without compensation for time and expense, Vineyard Estates signed with another brokerage, Sotheby's– the firm responsible for the initial $100 million-dollar listing of Kluge's main residence, the 24,000 square-foot Albemarle House, which was reduced mid-February to a still eye-popping $48 million.

In response to Hardy's suit, Vineyard Estates claims it really had been released from Hardy's contract– and provides an exhibit that seems to support the claim.

"We all agree that we would like to accept your offer of $25,000 together with the release of the existing contract," Hardy wrote in an email to Vineyard Estates representative John Grab on April 25, 2008– about a year before the listing contracts expired. "Would you like to prepare a document which would terminate our agreement upon receipt of funds?"

While Hardy's attorney Brock Green says that email "is only a small part of the story," Vineyard Estates attorney David Thomas says the "email speaks for itself" and notes "lawsuits like this are more common since the real estate market took a downturn."

Regardless, the lawsuit is "bizarre" says one local realtor, who asked not to be named. "I would never sue my clients," says the realtor, noting that the real estate business is "relationship-based" and relies on goodwill and word of mouth.

Realtor Roger Voisinet agrees that suing clients is indeed unusual–- particularly given what he sees as a "generous" settlement offer.

"To be given any compensation is way more than the average seller would do," notes Voisinet, adding that Hardy, whom he respects, "must have given it a lot of thought, and maybe felt that he was much more damaged than $25,000."

Albemarle Circuit Court Judge Cheryl Higgins will rule on Friday, February 26 whether the case will go to trial.

Could it be that there just aren't buyers for such exclusive listings? A year into the new listing agreement with Sotheby's, not a single lot at Vineyard Estates has sold. And making matters worse, the lone spec house now faces the threat of foreclosure.

The house, a 6,600-square-foot mansion at 2621 Coopers Lane, was built in 2007 on 2.895 acres and is assessed for $2.76 million. Buyers hoping to score a bargain should be sure to bring their checkbooks to the 9:30am March 1 auction at the Albemarle courthouse, as a $360,000 deposit is required.

According to county property records, a company called Lehman Rockwell Evans LLC bought an 18.33 percent piece of the house for $712,000 in March 2007. Brian and Debra Helms invested $1 million for a 30 percent share in January 2008.

“Like most real estate projects, it was developed with partners,” says winery spokesperson Kristin Moses Murray. “As a result of the collapse in the real estate market, some of those other partners went bankrupt, and many of the remaining investors abandoned their continuing obligations. In short, they have gone under, and Patricia and Bill have not.”

Only one lot in the subdivision is foreclosed, and Vineyard Estates is a separate holding from other Kluge enterprises, such as the Kluge Winery and Vineyard, stresses spokesperson Murray.

“Because we remain financially viable, we are in the process of consolidating all ownership back with us,” Kluge and Moses say in a prepared statement, “and pursuing discussions with stronger partners who both understand the potential of these 24 lots and have the resources to help us realize it.”

But with so much property for sale, including gourmet gas-bistro Fuel, on the market since mid-2007, are all the for-sale signs indicative of cash-flow woes or merely downsizing, which has been the official company line since Albemarle House was listed with Sotheby’s in October?

“You’ll never hear the D-word out of my mouth,” says Murray. “But they are streamlining their lifestyle.”

Murray points to a Sotheby’s release: “Her future plans include creating a new home on the vineyard property, which will be built and decorated in a style entirely different from Albemarle House, reflecting her changing taste and more streamlined lifestyle.”

Indeed. Kluge plans to start streamlining by auctioning the estimated $13-million contents of Albemarle House. On June 8 and 9, according to an auction house official, Sotheby’s will hold an on-site auction at the 300-acre property in southern Albemarle County in an effort to unload an estimated $13.5 million worth of decorative objects, Georgian furniture, and paintings.

“Let me assure you,” says Murray, “that both the [Vineyard Estates] project and Kluge are here to stay.

–with additional reporting by Lisa Provence

Updated February 22 with the Albemarle House price reduction.
Updated 3:49pm, February 23 with scads of additional infomation
Original headline: "Default alleged: Kluge spec house under foreclosure"


Deep pockets are going to be increasingly hard to find, my guess-- this will be the year when the wealthiest of the wealthy, in our community, will be hit hard.

from today's Washington Post: " there's been an enormous bubble in commercial real estate and it has to come down..there will be significant bankruptcies among developers and significant failures among community banks" according to Elizabeth Warren, chairman of the Congressional Oversight Panel, the watchdog created by Congress to monitor the financial bailout.


"much of that was in tax decreases for 95% of america. in fact, most of the tea baggers received a tax decrease under obama. how many of them know that and how many want to give that back? i would think 0 and 0."

You received more in your paycheck but are still in the same tax bracket. This trick shows up when you fill out your taxes.

confused One of the nightspots in Belmont had a burlesque show a while back just a JOKE that story in in another blog in the hook

bushes spending
obamas spending

How about the american middle class spending WAY more than they made for an entire decade.

You want to blame the government because YOU spent money.

you deserve to lose.

fdr though you were DEAD please stay that way.

hey taxman...

when the tax cuts expire next year will that be an increase or a decrease?

Price Reduced: Albemarle House now goes for $48 Million, a cut of $52M. Why, we'll be seeing new owners over there any day now, won't we?


Told you she was a deep financial doodoo.

Just what I like to hear .The rich winery whine about not being rich enough! Only in C-Ville ( Stepford that is )What are they going to do buy it back at 1/2 price like someone else we know did last week ?

Just watch --not this time, sure they won't go to the poor house, but many will face a drastic change in lifestyle. The regulatory environment is changing, and just today we learned from the fed that the days of cheap borrowing are coming to an end. Think you'll be surprised at what's coming down the pike for the wealthy.



Mrs. Kluge seems headed back to the penury with which she started, when she was an "exotic dancer." Karma. She extracted a lump sum from Kluge, blew it all in upscale ventures reflecting her own pretentious taste rather than sound business judgment, and now can't pay the maid. All she kept from Kluge was his name (even after she remarried). Hard to feel sorry for her. Welcome back to the real word. Get a job.

Pound Foolish, no I did not spend beyond my means nor did many people. Unfortunately many did do so and now we all are expected to bail them out.

Chouva, Obama has more than doubled the deficit already, mostly borrowed from China. What tax decreases? This will not end well.

No, the spending has to decrease. Taxes will go up next year but the spending has to slow as well. Buying out GM and Chrysler to save the UAW was a horrible ideas as is bailing out state governments.

whomever won the election was getting a 1.2T defecit. that is fact according to the CBO. obama has added to it, to the tune of about 300B so far, with more to come.

much of that was in tax decreases for 95% of america. in fact, most of the tea baggers received a tax decrease under obama. how many of them know that and how many want to give that back? i would think 0 and 0.

i cant take a group of people seriously when their solution to defecit reduction is tax decreases.

...sniffle ... sniffle .. (tears in my eyes) .. That is just sooooo sad .. Booo Hoooo! .. sniffle

The biggest part of the deregulation happened under Clinton when they removed most of the rules regulating banks that were setup by, yes, FDR in the 1930's. No, I didn't like Bush's spending. However it is still Obama who is spending billions on the car companies and subsidizing the banks today and doubling the federal deficit.

Ending financial advantages for the wealthy is long overdue. What we've witnessed is welfare for the wealthy,and the middle class and working class have financed this huge gap in earnings, where real work earned less,and investments and moving your money around earned more. I do believe that Obama and his advisors have seen this for what it is, and both the effects of the housing and commercial real estate bubble bursting, and the inability of everyday Americans to make ends meet, even for basic necessities, is forcing a change.

Nancy Thanks for the Washington post quote ! NOT!!!!!!!!!!!!!!!!!!! The riches of the rich will never get hurt by this stuff. It becomes right-off for them and the get it back in a lower tax bill!

"streamlined lifestyle.” first we need to know what is her lifestyle and then we can hypothesize what this will mean. I seem to remember someone commenting that her vision for Vineyard Estates was only affordable for Arab oil sheiks, now perhaps only affordable for downsized Wallstreet CEO's .

Nancy, hate to give the bad news, but Obama and his advisors are the wealthy benefiting from it all. Direct bank bailouts, bailouts for the UAW, indirect bank bailouts by having the feds provide funds to prop up home prices, which incidently hurts those trying to buy a home.

Its a mess and it isn't getting better.

Time to get Halsey Minor on the line, now that would be a partnership: " pursuing discussions with stronger partners who both understand the potential of these 24 lots and have the resources to help us realize it.”

Don't disagree that it's a mess, and I'm sure Ms. Kluge would concur, but the blame goes back before the Obama administration, to the go go Bush days of deregulation. Easy money, easy credit, led to just the type of development you see here. I doubt if you will see many multi-million dollar spec houses built anytime soon in this area.

Nancys right The Bush crime family started all this bank ,housing health insurance stuff the first two years in office . We'd be in deeper dodo if this administration didn't just in as save their ass's .FDR you know that there are other real news outlet besides the Fox(faux)News network. Try the BBC America on for size and see the real deal.

Crozetette, how is that a useful comment?

The topic here is the Kluge/Moses couple looking to dump their bad choices onto the banks and ultimately the taxpayer. I don't feel sorry for the banks - they shouldn't have loaned her the money without real collateral.

Please take your earlier conspiracy theories about Bush etc elsewhere. There are plenty of non-news blogs for that.

Have you seen the trailer trash that lives in that neighborhood? Blenheim Road is one of the trashiest spots in the county.


It may well be that Ms. Kluge could afford to make the lenders whole, but why should she? The property is worth less now than when the financing was provided (to the buyers) in 2007 and early 2008. Any rational businessperson would and should walk away from such an investment.

It doesn't mean that she's in the poor house. The property is under water. In such a circumstance, foreclosure is the smart move.

She's another great C'ville entrepreneur. As long as she was married to the richest man in the U.S her words meant something. She's as hollow as her name. John could afford a helicopter with landing pad. Even Thomas Jefferson would live on the West-end if he had kids and had to go pick up them up at soccer practice! Ever seen Rt.53 at 7 a.m. no Patricia I'm sure you haven't. Most upwardly mobile multimillionaire types like to leave their house in the morning! Why not have another taped interview on the Live show with WNRN where you tell everyone how great your new husband is. Why didn't you take his name? She should have been forced to drop the name Kluge when he paid you off! The only reason she has a dime! I see her as a great motivator in the C'ville area. From what I've been told she's single handedly changed Farmington's Membership requirements as far as land owners being members and how the board of visitors get appointed!