PKO Ventures, LLC v. Norfolk Redev't & Housing Auth. ( 2013 )

Present: Kinser, C.J., Lemons, Millette, Mims, McClanahan,
Powell, JJ. and Lacy, S.J.
PKO VENTURES, LLC
OPINION BY
v. Record No. 121534 JUSTICE LEROY F. MILLETTE, JR.
September 12, 2013
NORFOLK REDEVELOPMENT AND HOUSING AUTHORITY
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK
Louis A. Sherman, Judge
In this appeal we consider whether a redevelopment and
housing authority may acquire by process of eminent domain
unblighted private property located within a blighted area
designated for redevelopment subsequent to a statutorily imposed
limitation on acquisition by condemnation to only those
properties that are themselves blighted.
I. Facts and Proceedings
A. Creation of the Redevelopment Project and Earlier
Acquisitions
In January 1998, the Council of the City of Norfolk
approved the Hampton Boulevard Redevelopment Project ("the
Redevelopment Project") created by the Norfolk Redevelopment and
Housing Authority ("NRHA") under the authority of Code §§ 36-49
and 36-51. Code § 36-49 authorizes a redevelopment and housing
authority to "adopt a redevelopment plan for a designated
redevelopment area to address blighted areas." A redevelopment
and housing authority is "specifically empowered to carry out
any work or undertaking in the redevelopment area[,]" including
"[a]cquir[ing] blighted areas." Code § 36-49(A)(1).
Code § 36-51(A) authorizes localities to "approve
redevelopment plans through their governing body or agency
designated for that purpose." The properties affected by the
Redevelopment Project included a nine and one-half block area
bounded by Hampton Boulevard on the west, 48th Street on the
north, Killam Avenue on the east, and 38th Street on the south,
all within the City of Norfolk.
The NRHA's approval of the Redevelopment Project was based
upon a redevelopment study which determined that the
Redevelopment Project area was blighted due to incompatible land
uses, disrepair, environmental risks, demographic changes, and
high crime rates. Based upon the study, the NRHA concluded
that, without eliminating these factors, the adverse impact on
the general welfare would increase. The proposed Redevelopment
Project's properties were classified as good, fair, or poor.
The latter classification indicated a structure with extensive
exterior deterioration and an unlikely economic feasibility of
rehabilitation. Of all the properties, twenty percent were
classified as poor. The Redevelopment Project area was selected
to assist in the orderly expansion of Old Dominion University
("ODU"), a public university located immediately adjacent to the
Redevelopment Project.
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Following approval of the Redevelopment Project, two
decisions of the Circuit Court of the City of Norfolk, in 1999
and 2009, rejected challenges to the NRHA's condemnation of
several of the individual properties within the Redevelopment
Project. In 1999, the circuit court held that the area
designated for the Redevelopment Project was blighted under Code
§ 36-49. Norfolk Redevelopment & Hous. Auth. v. J.A.G. Assocs.,
No. CL99-1100 (Norfolk Cir. Ct. Nov. 16, 1999) (order overruling
jurisdictional defenses). In 2009, in rejecting a challenge to
a subsequent petition to condemn other individual properties
within the Redevelopment Project, the circuit court held that
the doctrine of stare decisis prevented these landowners from
relitigating the 1999 determination that the Redevelopment
Project was blighted and that the NRHA did not act in an
arbitrary or unreasonable manner. The circuit court, in the
alternative, confirmed that the area was blighted. Norfolk
Redevelopment & Hous. Auth. v. Arney, No. CL08-1918 (Norfolk
Cir. Ct. July 23, 2009)(letter opinion).
In its 2009 order, the circuit court also addressed a claim
contesting the propriety of ODU's agreement with the NRHA in
which ODU agreed to pay the NRHA a commission of four percent of
the total land assembly costs incurred for the acquisition of
property within the Redevelopment Project area. According to
the Cooperation Agreement between the NRHA and ODU, land
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assembly costs included appraisals, the title search,
environmental studies, title insurance, surveys of individual
parcels, and the purchase price for properties acquired by deed
or condemnation. The circuit court held that the NRHA's
acceptance of a commission of four percent of the total land
assembly costs from ODU did not create an improper agency
relationship between the NRHA and ODU.
B. Acquisition of the Subject Property
On April 21, 2010, the NRHA, after making an unsuccessful
offer to purchase, filed a petition to condemn the subject
property ("the Property") under the authority of Code § 36-49.
The Property is a parcel of land comprised of approximately
10,000 square feet located at 1069 West 41st Street in the City
of Norfolk and improved by a ten-unit residential apartment
building, then owned by PKO Ventures, LLC ("PKO"). According to
a stipulation between the parties, the Property was not blighted
at the time that the NRHA filed its petition. The petition
indicated that the Redevelopment Project had been approved and
that the Property was included within the designated
Redevelopment Project area. The petition requested that the
circuit court condemn the Property and pass title to the
Property in fee simple to the NRHA. PKO filed an answer and
grounds of defense to the NRHA's petition for condemnation.
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The NRHA filed a motion to strike PKO's objections and
affirmative defenses. It argued that the doctrine of stare
decisis precluded PKO from challenging the NRHA's acquisition of
its Property by eminent domain because the court had twice
upheld challenges to the Redevelopment Project in 1999 and 2009.
PKO filed a response to the NRHA's motion to strike.
In response to the NRHA's motion to strike, PKO argued that
(1) Code § 1-219.1 precluded the NRHA from acquiring PKO's
unblighted Property after July 1, 2010, (2) stare decisis does
not apply because the particular objections and defenses raised
by PKO were not raised in 1999 or 2009, and in part could not
have been raised because the law then in effect was different,
and (3) the NRHA violated due process requirements because it
had a pecuniary interest in the outcome which biased its
decision to condemn properties constituting the Redevelopment
Project.
The Circuit Court of the City of Norfolk, after a hearing
on the matter, denied PKO's objections and defenses to the
acquisition of the Property, granted the NRHA's motion to strike
in part, and authorized the NRHA to acquire PKO's Property by
eminent domain. In its letter opinion, the circuit court
reasoned that the law that was in effect on the day the petition
was filed controlled, and that, otherwise, the retroactive
application of Code § 1-219.1 to discontinue the case would be
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in violation of Code §§ 1-9 and 1-239. The circuit court also
held that the Redevelopment Plan was lawful, applying the
results of the 1999 and 2009 cases to the present case by virtue
of the doctrine of stare decisis. At the conclusion of the
subsequent July 2012 jury trial to determine just compensation
for the Property, the NRHA acquired the Property for $550,000.
PKO filed a timely appeal, and we granted review on all
assignments of error.
II. Discussion
A. Whether the Circuit Court Erred by Permitting the NRHA to
Acquire the Property at Issue After July 1, 2010
1. Legislative History of Code § 1-219.1
The Virginia General Assembly in 2007 enacted Chapters 882,
901 and 926, all of which are substantively identical
(collectively "Chapter 882"). Paragraph 1 of Chapter 882 added
the current § 1-219.1 to the Code of Virginia. As relevant
here, the legislation provided that property taken for
condemnation must itself be blighted at the time the petition
for condemnation is filed:
A. The right to private property being a
fundamental right, the General Assembly
shall not pass any law whereby private
property shall be taken or damaged for
public uses without just compensation. The
term "public uses" mentioned in Article I,
Section 11 of the Constitution of Virginia
is hereby defined as to embrace only the
acquisition of property where: . . . (v)
the property is taken for the elimination of
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blight provided that the property itself is
a blighted property.
. . . .
B. For purposes of this section: "Blighted
property" means any property that endangers
the public health or safety in its condition
at the time of the filing of the petition
for condemnation and is (i) a public
nuisance or (ii) an individual commercial,
industrial, or residential structure or
improvement that is beyond repair or unfit
for human occupancy or use.
Code § 1-219.1(A), (B) (emphasis added).
Paragraph 3 of Chapter 882 provides:
until July 1, 2010, the provisions of this
act shall not affect the ability of a
redevelopment and housing authority
organized pursuant to Title 36 of the Code
of Virginia to acquire property pursuant to
any redevelopment or conservation plan
adopted prior to January 1, 2007. However,
the provisions of this act shall be
applicable to all redevelopment and
conservation plans adopted after January 1,
2007.
(Emphasis added.) Paragraph 4 of Chapter 882, as amended by
Acts 2010, ch. 203, provides:
[n]othing contained in this act shall
prohibit the Norfolk Redevelopment and
Housing Authority or the City of Norfolk to
acquire property located at . . . , both
located in the City of Norfolk, through the
use of eminent domain for the location of a
recreational facility open to the public to
be owned or operated by a not-for-profit
entity, provided such acquisitions are
instituted prior to January 1, 2011.
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(Emphasis added).
2. Statutory Interpretation of Code § 1-219.1 and Paragraphs 3
and 4 of Chapter 882
PKO, in its first assignment of error, contends that the
circuit court erred in allowing the NRHA to acquire the Property
after July 1, 2010 by a condemnation action that the NRHA filed
before July 1, 2010. PKO argues that the circuit court erred
because: (1) the Property was not blighted at the time the
petition was filed, as required by Code § 1-219.1, and (2) the
acquisition of unblighted property was prohibited beginning on
July 1, 2010, as indicated in Paragraph 3 of Chapter 882.
PKO's assignment of error presents an issue of statutory
interpretation of both Code § 1-219.1 and Paragraphs 3 and 4 of
Chapter 882. This presents a pure question of law which we will
review de novo. Laws v. McIlroy, 283 Va. 594, 598, 724 S.E.2d
699, 702 (2012). When evaluating statutory language, the Court
applies "the plain language of a statute unless the terms are
ambiguous." Boynton v. Kilgore, 271 Va. 220, 227, 623 S.E.2d
922, 926 (2006). "When an enactment is clear and unequivocal,
general rules for construction of statutes of doubtful meaning
do not apply." Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d
84, 87 (1985).
We have held that "in the construction of statutes
conferring the power of eminent domain, every reasonable doubt
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is to be [resolved] adversely to th[at] right." School Board v.
Alexander, 126 Va. 407, 413, 101 S.E. 349, 351 (1919).
"[U]nless both the spirit and letter of the statute clearly
confer the power, it cannot be exercised." Id. Statutes
authorizing the power of eminent domain must, therefore, "be
strictly construed, and a locality must comply fully with the
statutory requirements when attempting to exercise this right."
3232 Page Ave. Condo. Unit Owners Ass'n v. City of Va. Beach,
284 Va. 639, 645, 735 S.E.2d 672, 675 (2012).
The plain meaning of Code § 1-219.1 makes it clear that
redevelopment and housing authorities no longer have the
authority to condemn individual properties within a
redevelopment area determined to be a blighted area when the
properties are not themselves blighted. The central issue in
this appeal, however, is whether the NRHA, in its acquisition of
the Property, is bound by the enactment of Code § 1-219.1.
3. Effective Date of Code § 1-219.1
Code § 1-219.1 became effective on July 1, 2007. It
applied to all governmental entities, including the NRHA. The
"ability. . . to acquire" property as specified in Paragraph 3
refers to the completion of an effective taking, and does not
permit a redevelopment and housing authority acting pursuant to
a valid redevelopment plan to acquire properties that are not
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themselves blighted after July 1, 2010 merely by filing a
petition for condemnation.
We have held that "we have a duty, whenever possible, to
interpret the several parts of a statute as a consistent and
harmonious whole so as to effectuate the legislative goal.
Generally, the Court will look to the whole body of [a statute]
to determine the true intention of each part." Ford Motor Co.
v. Gordon, 281 Va. 543, 549, 708 S.E.2d 846, 850 (2011) (quoting
Oraee v. Breeding, 270 Va. 488, 498, 621 S.E.2d 48, 52-53
(2005)). This includes "the entirety of a single legislative
enactment as it appears in the Acts of Assembly as a whole."
Eberhardt v. Fairfax Cnty. Employees’ Ret. Sys., 283 Va. 190,
194, 721 S.E.2d 524, 536 (2012). Accordingly, we must read the
text of Chapter 882 as a whole to determine the intended meaning
of the words "ability . . . to acquire" as used in Paragraph 3.
We also assume "[w]hen interpreting and applying a statute,
. . . that the General Assembly chose, with care, the words it
used in enacting the statute, and we are bound by those words."
Kiser v. A.W. Chesterton Co., 285 Va. 12, 19 n.2, 736 S.E.2d
910, 915 n.2 (2013) (internal quotation marks omitted). Because
we assume that the General Assembly chose the statutory language
with care, "when the General Assembly has used specific language
in one instance, but omits that language or uses different
language when addressing a similar subject elsewhere in the
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Code, we must presume that the difference in the choice of
language was intentional." Newberry Station Homeowners Ass'n v.
Board of Supervisors, 285 Va. 604, 616, 740 S.E.2d 548, 554
(2013) (internal quotation marks omitted).
We presume that the General Assembly's use of specific
language in Paragraph 4 of Chapter 882 was intentional and
consequential. Paragraph 4 establishes an exception to the
application of the provisions of Code § 1-219.1 specifically for
the NRHA for one specific recreational project, which is not the
project at issue here, so long as the petition for acquisition
by eminent domain was "instituted prior to January 1, 2011."
Thus, Paragraph 4 clearly sets a deadline for the filing of the
petition for condemnation and demonstrates that when the General
Assembly wanted to make an exception to the application of Code
§ 1-219.1 based on the date a petition for condemnation was
filed, it did so with clear and unambiguous language.
In contrast, Paragraph 3 applies to all redevelopment and
housing authorities operating pursuant to redevelopment plans
adopted prior to January 1, 2007. It does not refer to either
the filing of a petition for condemnation or the institution of
the acquisition of property, but instead places a limitation on
the "ability of a redevelopment and housing authority . . . to
acquire property." This language is not comparable to the
language contained in Paragraph 4 of Chapter 882 and cannot be
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construed to provide an exception to the application of Code
§ 1-219.1 based on the date the petition for condemnation was
filed.
Accordingly, we hold that the circuit court erred when it
allowed the NRHA to acquire the Property subsequent to the
statutory deadline. The parties stipulated that the Property
was not blighted. Further, the NRHA did not acquire the
Property by obtaining title by certificate of take or
certificate of deposit, or an award pursuant to a petition for
condemnation prior to the July 1, 2010 deadline established by
Paragraph 3. The NRHA therefore retained its ability to acquire
the unblighted property only until July 1, 2010 when the
limitations of Code § 1-219.1 became applicable. On July 1,
2010, the terms of Code § 1-219.1 governed the NRHA's attempted
acquisition and barred its authority to condemn PKO's unblighted
Property.
4. Whether the NRHA Had a Substantive Right to Acquire PKO's
Property under Title 36 of the Code
The NRHA contends that even if the Court determines that
Paragraph 3 of Chapter 882 does require it to have completed
litigation prior to the July 1, 2010 deadline, the circuit court
did not err. The NRHA argues that Title 36 of the Code
conferred the NRHA with a substantive right to acquire PKO's
Property that cannot be impaired by the enactment of a later
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statute. According to the NRHA, the law in effect when its
right to acquire the Property accrued governs the proceeding. *
The NRHA contends that its right to obtain PKO's Property arose
in 1998 with the adoption of the Redevelopment Project, and that
the language of Code § 1-219.1 cannot limit that right. We
disagree.
We have previously held that "there are no vested rights in
a potential result in pending litigation." Marriott v. Harris,
235 Va. 199, 212, 368 S.E.2d 225, 231 (1988) (internal quotation
marks omitted). The NRHA filed a petition for condemnation in
April 2010 but did not acquire title to the Property until after
*
In making this argument, the NRHA relies, in part, on Code
§ 1-9. Code § 1-9 states, in relevant part:
Nothing in this Code shall operate to
discontinue any cause or matter, civil or
criminal, which shall be pending and
undetermined in any court on the day before
this Code, or any provision of this Code,
takes effect.
The NRHA contends that the terms of Code § 1-9 preclude Code
§ 1-219.1 from having the effect of discontinuing the
condemnation proceedings, as they constitute a civil case
pending in court before Code § 1-219.1 took effect.
Code § 1-9, however, protected pending "suits and
proceedings" on grounds not recognized under the new Code from
being discontinued with the General Assembly's enactment of the
Code of 1950, and is explicitly inapplicable to acts enacted
after the Code of 1950 took effect. Commission on Code
Recodification, Report to the Governor and General Assembly of
Virginia [Concerning Proposed Code of Virginia] (Dec. 15, 1947),
House Doc. No. 18 (1948), reprinted in Code of Virginia (1950)
Vol. 1, at ix-xxiii. Subsequent statutory enactments are
addressed by Code § 1-239, discussed in Part II.A.4., supra.
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July 1, 2010. As a result, the NRHA's rights to the unblighted
Property owned by PKO were only prospective at the time that
Code § 1-219.1 became applicable to redevelopment and housing
authorities. As in Marriott, the General Assembly only affected
the potential result of the NRHA's petition for condemnation by
enacting Code § 1-219.1. The application of Code § 1-219.1 to
the NRHA therefore could not constitute a denial of vested
rights.
The NRHA also contends that Code § 1-239 prohibits the
retroactive application of new statutes to impair substantive
rights that accrued before the new statute came into effect.
Consequently, the NRHA contends that its rights to the Property
by eminent domain could not be impaired by Code § 1-219.1
because they accrued prior to the effective date of Code § 1-
219.1. We disagree.
Code § 1-239 states, in relevant part:
No new act of the General Assembly shall
be construed . . . to affect . . . any
right accrued, or claim arising before the
new act of the General Assembly takes
effect; except that the proceedings
thereafter held shall conform, so far as
practicable, to the laws in force at the
time of such proceedings.
As aforementioned, the NRHA did not hold any rights to the
Property when Code § 1-219.1 became applicable to terminate a
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redevelopment and housing authority's power to acquire property
that is not itself blighted.
Code § 1-219.1 did not affect a "claim arising" before it
took effect. As discussed in Part II.A.2., supra, the Court
"appl[ies] the plain language of a statute unless the terms are
ambiguous." Boynton, 271 Va. at 227, 623 S.E.2d at 926. The
terms of Code § 1-239 are not ambiguous. Code § 1-219.1 became
effective, in its entirety, on July 1, 2007. When the NRHA
filed its petition to condemn the Property in April 2010, its
ability to acquire the Property was unencumbered. The NRHA
simply failed to acquire the Property, an unblighted individual
property, before July 1, 2010, when blight became a requirement
for acquisition of property within the Redevelopment Project
area.
Paragraph 3 of Chapter 882 indicates that, "until July 1,
2010, the provisions of this act shall not affect the ability of
a redevelopment and housing authority organized pursuant to
Title 36 of the Code of Virginia to acquire property pursuant to
any redevelopment or conservation plan adopted prior to January
1, 2007." (Emphasis added.) While the terms of Code § 1-219.1
limit the NRHA's ability to acquire unblighted property within a
blighted area after July 1, 2010, any claims arising after the
effective date of Code § 1-219.1 on July 1, 2007 did not arise
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"before the new act of the General Assembly," i.e., Code § 1-
219.1, took effect. Code § 1-239.
The NRHA's claim arose in April 2010, when it filed its
petition for condemnation. Because the petition was filed after
July 1, 2007, the claim arose after Code § 1-219.1 was enacted
and was not affected by Code § 1-219.1 in violation of Code § 1-
239.
B. Other Issues
PKO also contends that the circuit court erred when it (1)
ruled that the subject Property was in a blighted area, (2)
struck PKO's due process objection, and (3) applied the doctrine
of stare decisis to hold that the NRHA was permitted to make a
finding of blight. In light of our decision that the circuit
court erred by permitting the NRHA to acquire the Property under
the authority of Code § 36-49 after the July 1, 2010 deadline,
we will not discuss these remaining assignments of error.
III. Conclusion
For the reasons stated, we hold that the circuit court
erred in permitting the NRHA to acquire PKO's Property after the
effective date of the July 1, 2010 statutory limitation
prescribed by Code § 1-219.1. We will reverse the judgment of
the circuit court and enter final judgment in favor of PKO.
Reversed and final judgment.
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