Valley feud: Neighbors sue neighbors under RICO
Last week's trial in U.S. District Court is just the latest in 10 years of litigation about the Greene County subdivision, and the continuation of the case left unresolved the issues in the $1 million civil lawsuit: Is the homeowners association liable for allegedly "extortionate" actions under the Racketeer Influenced and Corrupt Organizations Act?
Three Dogwood Valley residents (including Douglas Dye, pictured left) brought the suit against the homeowners association, claiming its actions amounted to extortion when it put liens on their property and clouded their titles, even after the Supreme Court of Virginia ruled in 2004 that the Dogwood Valley Citizens Association could not make special assessment or put liens on property– nor, as happened in the case of 15 lots, sell those properties at auction.
Defendants are association board members, including Gary Lowe and Matthew P. Brown. Lowe is not only the group's president and mayor of Stanardsville, he's also the person who purchased a property foreclosed over an alleged $35 debt.
As for Brown, testimony now indicates that besides serving as treasurer, he's the one who bankrolled the $159,000 in legal fees for cases that twice put the association on the losing side in Virginia's highest court.
Judge Norman Moon asked plaintiff's attorney Joe D'Erasmo to show how the remaining three defendants– Dean Musser, Keith Wynn, and Judy McDavid– committed extortion under RICO when the association sent letters to residents telling them to pay special assessments after Virginia's high court disallowed them in 2004.
"They were passively acquiescent," says D'Erasmo.
Brown testified that he relied on his attorney George Dygert's advice– advice that Dygert told him was risky– by making special assessments on residents and slapping liens on their property after the 2004 Supreme Court decision. In 2006, the state high court again ruled the Dogwood Valley Citizens Association could not make special assessments and could collect only the $15/year set forth in its original incorporation papers.
Brown and McDavid walked out of the court smiling June 25 after Moon continued the case, but they did not comment. The defendants' attorney, John Loehr, declined comment.
Greene attorney David Dickey, who's familiar with the years of litigation concerning Dogwood Valley, calls the continuance standard procedure. "Judge Moon does that. He always asks for memoranda."
Although a former association lawyer, Dickey describes the "arrogance" of the group and its "total disrespect" for the residents. "One day Matt Brown got in his head the culverts in the driveways hadn't been cleaned out," Dickey says. "He ripped them out, even on private property. He felt they had no right to them." Brown did not respond to a Hook call for comment.
The case that sent the organization to the Virginia Supreme Court the first time was when it sold William Winkelman's two lots, for each of which he owed $35 in 1998 special assessments plus a $50 penalty from 1997, according to testimony from Dygert associate Kelly Hobbs. Two months after she notified Winkelman his lots would be sold, they were on the auction block, and Lowe purchased one.
"Why did the [association] pay to defend the Winkelman case?" Dickey asks. "It used hundreds of thousands of dollars that could have been used to fix the roads– to defend Gary Lowe's property? The only people who had an interest were those who bought them cheap."
Lowe paid $1,000 for the Winkelman lot, but the high court voided the transaction in its 2004 decision.
Three years ago, the association refused to reveal that Brown was paying its legal bills, which didn't show up in annual reports, and Lowe told the Hook that residents should be "thanking" the then-anonymous donor.
Plaintiff Mitch Miller told the Hook in 2005 that the association had initiated 35 legal actions– he called them "nuisance suits"– against him and members of his family. The lawsuits were usually non-suited before the court date, and at that time had cost Miller $100,000 in legal fees.
After the Winkelman decision, attorney Dygert testified he filed "curative" documents to bring the Dogwood Valley Citizens Association in line with the Virginia Property Association Act, and the association continued to make special assessments and put liens on properties.
Plaintiffs allege a pattern of abuses designed to separate owners from their real estate.
Miller described in court how one cash payment to Lowe– videotaped at a 2002 association meeting by a gun-toting man sent by Dygert– still showed up as unpaid in 2003 on a lot he and his mother owned. When his brother, Steve Miller, paid the $208 again to make sure they could vote at the association meeting, his money was returned– and Mitch Miller was not allowed to vote because of allegedly unpaid assessments.
Plaintiffs contend that the revocation of voting rights was a way the association kept residents from having a say in the organization.
For instance, 82-year-old property owner Shirley Moore testified her voting rights were revoked because of "misconduct" for collecting "illegal" proxies. "I don't know anything about stuff like that," she told the judge.
Plaintiffs attorney D'Erasmo thinks the continuance is a good thing. "There could be more information that could pop off the exhibits," he says, and there were 82 exhibits. "Continuances are commonly done in that sort of case. It's not a simple case."
D'Erasmo describes his clients as "determined people who feel they definitely have been wronged. They feel their homes, family and property have been threatened by this group."
"People live [in Dogwood Valley] full time because they can't afford to live anywhere else," says plaintiff Grant Colby. And even if he prevails in the case, he points out that the association has already shown it "doesn't necessarily take heed of court orders and judges' rulings."