Chesterfield County v. Stigall

• Decision Date: 02 November 2001
• Docket Number: Record No. 002942.
• Citation: 554 S.E.2d 49,262 Va. 697
• Court: Virginia Supreme Court
• Parties: CHESTERFIELD COUNTY v. Margaret B. STIGALL, Trustee, et al.

554 S.E.2d 49

262 Va. 697

CHESTERFIELD COUNTY v. Margaret B. STIGALL, Trustee, et al.

Record No. 002942.

Supreme Court of Virginia.

November 2, 2001.

Steven L. Micas, County Attorney (Jeffrey L. Mincks, Deputy County Attorney; David W. Robinson, Assistant County Attorney, on briefs), for appellant.

William G. Broaddus (McGuireWoods, on brief), Richmond, for appellees.

Present: All the Justices.

KOONTZ, Justice.

In this appeal, we consider whether Code § 58.1-3241(A) authorizes Chesterfield County to assess "roll-back" taxes, defined in Code § 58.1-3237, against certain real property as a result of conveyances of the entire property in two separate parcels by the owner, in the absence of a change in the use of the property.

BACKGROUND

The material facts are not in dispute. In 1954, Charles W. Stigall acquired, by single deed, two contiguous parcels of real property consisting of approximately 135 acres in Chesterfield County. The larger of the two parcels, denominated by the parties in this case as the "Falling Creek" parcel, consisted of approximately 120 acres. The smaller parcel, denominated by those parties as the "A.G. Tyler" parcel, consisted of approximately 15 acres.¹

In 1975, pursuant to the applicable provisions of the statutory scheme for Special Assessment for Land Preservation contained in Code § 58.1-3229 et seq., Chesterfield County adopted an ordinance providing for reduced assessment and taxation of real estate devoted to agricultural, horticultural, forest, or open space use (special land use tax program). Thereafter, the Falling Creek parcel was devoted to forest use, as defined in Code § 58.1-3230, and accepted by the County as qualified for reduced assessment and taxation under its special land use tax program.

In 1979 or 1980, the Commonwealth acquired by eminent domain a portion of the Falling Creek parcel for the construction of the Powhite Parkway, "a limited access, interstate grade freeway." The Powhite Parkway bisected the Falling Creek parcel into two unequal sections; one with approximately 26 acres lying north of the freeway and the other with approximately 84 acres lying south of the freeway. Although the two sections of the Falling Creek parcel were physically separated by the construction of the Powhite Parkway, the County continued to tax the Falling Creek parcel as a single unit under its special land use tax program. At the time of the eminent domain taking of a portion of this parcel, Charles Stigall did not record a subdivision plat or otherwise take any action that would reflect in the County's land records a legal separation of the parcel into two separate tracts.

Following the death of Charles Stigall in 1998, the Falling Creek parcel became the property of his widow, Margaret B. Stigall. On October 7, 1999, for the purpose of estate planning, Margaret Stigall conveyed that portion of the Falling Creek parcel lying south of the Powhite Parkway by deed to The Margaret B. Stigall Living Trust, a revocable inter vivos trust. On the same date and for the same purpose, she conveyed that portion of the Falling Creek parcel lying north of the Powhite Parkway by deed to The Stigall Family Limited Partnership. These deeds along with a 1988 plat reflecting the physical division of the Falling Creek parcel were duly recorded in the County land records. No change in the use of the property occurred as a result of these conveyances.

On December 27, 1999, the County, pursuant to Code § 58.1-3241(A), assessed roll-back taxes against the Falling Creek parcel in the amount of $22,087.74 based on the above described conveyances by Margaret Stigall. The amount of the tax represented the difference between the actual tax paid under the special land use tax program and the tax which would have been due had the real estate been taxed on its fair market value assessment during "the five most recent complete tax years." Code § 58.1-3237(B). Thereafter, on May 25, 2000, Margaret Stigall, in her capacity as trustee of her inter vivos trust, and The Stigall Family Limited Partnership (collectively, the taxpayers) filed a joint application in the Circuit Court of Chesterfield County for correction of erroneous assessment of these roll-back taxes.

Upon the filing of the County's responsive pleading and the parties' agreement that the material facts were not disputed, the trial court permitted the taxpayers to make an oral motion for summary judgment.² In a letter opinion dated August 21, 2000, and subsequently adopted by reference in the final order, the trial court, applying what it characterized as the "ordinary and commonly understood meanings" of the terms used in Code § 58.1-3241(A), initially ruled that the Falling Creek parcel "was not separated and split[-off] when [Margaret] Stigall made the conveyances of 1999, but years earlier when the Commonwealth built the Powhite Parkway." Because this separation did not result from an "action of the owner," the trial court concluded that the roll-back tax assessment permitted by Code § 58.1-3241(A) was not triggered. The trial court further ruled that following the 1999 conveyances to the trust and the partnership, the taxpayers "made the necessary attestation that the properties will continue to be devoted to `forest use,' and each of the parcels is of sufficient acreage to qualify for inclusion in the land use [tax] program authorized by Code § 58.1-3231" and, thus, "satisfy the requirements of Code § 58.1-3237(D)."

In its final order, entered on September 12, 2000, the trial court incorporated by reference its prior letter opinion, granted the taxpayers' motion for summary judgment, and ordered that the County "exonerate [the property in question] of all roll-back taxes imposed in 1999." In an order dated February 23, 2001, we awarded the County this appeal.

DISCUSSION

Beyond question the statutory scheme invoked by this case regarding a special land use tax program that provides for reduced assessment and taxation of real estate devoted to agricultural, horticultural, forest, or open space use is intended by the legislature to promote the preservation of such real estate for the public benefit. The key to that preservation is the amelioration of the pressure that forces landowners to convert their property to more intensive uses. One source of that pressure is the assessment of property devoted to one or more of these uses at values incompatible with such use. See Code § 58.1-3229 (1984 Repl. Vol.).

In this context, one intended goal of this statutory scheme is the continued qualifying use of property which has qualified previously for the reduced taxation provided by a special land use tax program following a proper application by the owner. Code § 58.1-3234. Thus, under Code § 58.1-3237(A), when the qualifying use of particular real property changes to a "nonqualifying use" or the zoning of that property is changed to a "more intensive use" at the request of the owner or his agent, that portion of the property which no longer qualifies for reduced assessment and taxation "shall be subject to additional taxes ... referred to as roll-back taxes." Pertinent to the present case, Code § 58.1-3237(D) expressly provides that "[l]iability to the roll-back taxes shall attach when a change in use occurs .... Liability to the roll-back taxes shall not attach when a change in ownership of the title takes place if the new owner ... continues the real estate in the use for which it is classified" prior to the transfer of title to the new owner.

In the present case, the County concedes that the real estate in question has not undergone a change in use and in subsequent years will qualify for reduced assessment and taxation under its special land use tax program so long as that real estate continues to be devoted to forest use by the new owners. Nonetheless, the County contends here, as it did in the trial court, that Code § 58.1-3241(A) authorizes it to assess roll-back taxes against that real estate as a result of the 1999 conveyances by Margaret Stigall.

Code § 58.1-3241(A) provides that:

Separation or split-off of lots, pieces or parcels of land from the real estate which is being valued, assessed and taxed under an ordinance adopted pursuant to this article, either by conveyance or other action of the owner of such real estate, shall subject the real estate so separated to liability for the roll-back taxes applicable thereto, but shall not impair the right of each subdivided parcel of such real estate to qualify for such valuation, assessment and taxation in any and all future years, provided it meets the minimum acreage requirements and such other conditions of this article as may be applicable. Such separation or split-off of lots shall not impair the right of the remaining real estate to continuance of such valuation, assessment and taxation without liability for roll-back taxes, provided it meets the minimum acreage requirements and other applicable conditions of this article.

No subdivision of property which results in parcels which meet the minimum acreage requirements of this article, and which the owner attests is for one or more of the purposes set forth in § 58.1-3230, shall be subject to the provisions of this subsection.

The County asserts that although the Falling Creek parcel was physically "separated" as a result of the prior eminent domain taking of a portion of it by the Commonwealth, Code § 58.1-3241(A) contemplates a legal separation,...