An Arlington judge has ordered a developer to give $250,000 to 22 homeowners in the county's Court House area, saying the developer breached his contract to buy their houses.
Many of the homeowners had moved and taken out loans for new houses after agreeing to package and sell their properties to the developer for a high-rise project that has yet to materialize.
Circuit Court Judge William L. Winston, ruling Monday on a suit brought by the homeowners in February, found that the Bethesda-based Courchevel Corp. had broken its contract with them and would have to turn over the money it posted to show earnestness with the owners. An appeal by Courchevel or its insurance company, Trans America, is expected.
David McC. Estabrook, the owners' attorney, said the ruling essentially frees them to proceed with plans to sell to another developer, Nordheimer Brothers Co. Inc., once a related suit now on appeal is resolved.
"We had reached a point of frustration and were just elated to have a victory," said Thomas A. Clary, one of the homeowners who moved last year when Courchevel informed the group that it planned to settle last Dec. 31.
But that settlement never took place, leaving many of the homeowners who had taken out loans for new houses in dire financial straits at a time they had been expecting to reap profits from the development boom that has changed the Courtlands neighborhood near the Court House Metro station.
In what was the area's first trend-setting major assemblage of properties, the 22 owners banded together to sell their land in a package rather than be picked off individually by developers wanting to cash in on a county plan for high-rise buildings in the area.
As a result, they concluded a deal with Courchevel for almost $10 million, approximately three times the assessed value of their land.
Shortly afterwards, rumors surfaced that the deal was shaky, but the homeowners and Courchevel President Thomas F. Herr insisted the rumors were false.
It was not until Dec. 19, almost a year after the project won County Board approval, that Courchevel notified the homeowners that the firm could not settle as scheduled on Dec. 31.
Herr and attorneys for Courchevel and the insurance firm could not be reached for comment yesterday. In the past, they have said the deal fell through when a partner Courchevel had counted on for the $100 million high-rise project withdrew because of pending changes in the tax laws.
Estabrook, the owners' attorney, said their plans to sell to Nordheimer will have to await a decision by the Virginia Supreme Court on whether to hear an appeal from Courchevel on a related suit won by one of the homeowners in Arlington Circuit Court.
The suit, which involves strategically located land owned by Myrtle W. Melnick, creates a cloud on the title to the whole package, Estabrook said.
Although the homeowners agreed that their properties would be sold simultaneously as one, Courchevel sold its rights to develop her property last December to the District-based National Athletic Advisors Inc. But Melnick refused to sell her land separately to the District firm and its suit against her was thrown out of court.
Attorney John W. Melnick, her son and a former state legislator, said Monday's court ruling was "the second shoe dropping in this case" and a finding that should benefit his mother's case.
Melnick said that, once the project's fate is resolved, Nordheimer will likely have to redesign the project and seek County Board approval.
Since the 22 owners won approval, other groups, including one adjacent to them, have begun packaging neighborhood properties. The practice became so popular that the County Board had to warn residents that it would not grant rezonings and higher densities in areas not already earmarked for such development