By Carol Vaughn — A group of Captains Cove residents filed a civil lawsuit June 21 in Accomack County Circuit Court against the company proposing to build a 140-unit townhouse development adjacent to the Captains Cove subdivision near Greenbackville.
The lawsuit alleges that past and proposed actions by the development company, CCG Note LLC, by virtue of having a controlling majority of its own representatives on Captains Cove’s property owner’s association board of directors, “represent self-dealing in breach of its fiduciary duty owed” to Captains Cove property owners.
The plaintiffs are asking the court to declare their property rights, as established in documents related to the subdivision; to find that CCG Note controls the property owner’s association; to award damages against CCG Note, in an unspecified amount; and to enjoin the developer and the property owner’s association “from taking any actions that interfere with or damage” residents’ property rights as established.
“It is unfortunate that the residents of Captains Cove had to take legal action against CCG Note LLC; however, there is no other recourse for us to protect the assets and design of our community,” said Teresa Birckhead, chairperson of Concerned Citizens of Captains Cove, in an email Monday.
Birckhead said there are “five board members affiliated or associated with that company and (who) will reap economic benefits from using our private assets,” referring to members of the Captains Cove property owner’s association board of directors who are affiliated with CCG Note.
“Even after 53 years of inception of Captains Cove, the developer controls the Property Owners Association. That is not a flattering fact for any developer especially when most buildable lots are owned by the members of the community,” she wrote.
The residents are represented by attorney Douglas E. Kable, of the Chesapeake firm Basnight, Kinser, Leftwich & Nuckolls.
The lawsuit names seven Captains Cove residents, including Birckhead, as plaintiffs and CCG Note LLC and Captain’s Cove Golf & Yacht Club Inc. as the defendants.
Captain’s Cove Golf & Yacht Club is the property owner’s association for the residential subdivision and CCG Note LLC, a Maryland LLC, is the developer, according to the lawsuit.
CCG Note’s owners/members include Timothy Hearn, James Silfee, Rodger Holland, and Michael Glick, according to the lawsuit.
The 88-page lawsuit includes as exhibits several documents related to Captains Cove, including a declaration of covenant restrictions, property owners’ association board of directors results, plats, documents related to the community’s water and sewer utilities, a site plan for the proposed townhouse project, and proffers CCG Note made to Accomack County related to an application for a conditional use permit.
Among claims detailed in the lawsuit is that the developer, CCG Note, has a super-majority on the property owners’ association board of directors, resulting in CCG Note representatives controlling the association.
“(In) its capacity as declarant and through its control of the association, CCG Note owes the plaintiffs, and the other Captain’s Cove property owners, a fiduciary duty and an obligation not to engage in self-dealing in any manner that damages their property rights,” according to the lawsuit.
The lawsuit also says the developer’s plan to use Captain’s Corridor, a private street in Captains Cove, to access the proposed townhouse development violates the declaration of covenant restrictions for the subdivision.
Additionally, the lawsuit says that, according to the declaration, the sewer system that serves Captains Cove not intended for public use and that use of numbered lots in the subdivision is restricted to single-family homes, but that lots were sold for sewer system use.
The lawsuit details the history of the sewer system, which CCG Note proposes to also use for the townhouse development.
In the lawsuit, the plaintiffs say the sewer system does not have capacity to serve both the townhouses and the platted lots in Captain Cove.
In a 1973 deed, the original developer, First Charter Land Corporation, conveyed all streets, parks, recreational facilities, and amenities to the property owners’ association.
In October 2014, Timothy Hearn, in his capacity as president of Captain’s Cove Utility Company Inc., signed an agreement to sell the sewer assets to Aqua Virginia Inc.
The agreement obligated Captain’s Cove Utility Company to convey to Aqua a 10-acre parcel, to be used as rapid infiltration basins for sewer treatment. The land at the time was not owned by the utility company but by the property owners’ association.
In February 2015, Hearn, as president of the utility company, signed a sales agreement for the 10 acres with the property owners’ association, which Hearn and other owners/members of CCG Note controlled at the time, according to the lawsuit.
Additionally, CCG Note or its affiliate, CCG Land LLC, sold “several numbered Captain’s Cove residential building lots” to the utility company, which in turn sold them to Aqua to be used for the sewer system, which the lawsuit says violated restrictions on use of the lots.
In December 2015, the property owners’ association, “while under the control of CCG Note,” also granted Aqua a permanent easement to access and use an area on the golf course for the sewer system. The easement crossed private areas that were supposed to be for exclusive use of property owners, according to the lawsuit.
The lawsuit also says a groundwater withdrawal permit for Captains Cove’s water system does not authorize its use to supply the townhouse development.
Additionally, the lawsuit says CCG Note’s proffer to donate land on Fleming Road to the Greenbackville Volunteer Fire Department violates covenant restrictions, which say numbered lots may only be used for single-family homes.
