Clear Sky Car Wash, LLC v. City of Chesapeake

• Decision Date: 18 December 2012
• Docket Number: Civil Action No. 2:12cv194.
• Citation: 910 F.Supp.2d 861
• Parties: CLEAR SKY CAR WASH, LLC et al., Plaintiffs, v. CITY OF CHESAPEAKE, VIRGINIA, et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

910 F.Supp.2d 861

CLEAR SKY CAR WASH, LLC et al., Plaintiffs,

v.CITY OF CHESAPEAKE, VIRGINIA, et al., Defendants.

Civil Action No. 2:12cv194.

United States District Court,

E.D. Virginia,

Norfolk Division.

Dec. 18, 2012.

Edward Joseph Grass, Attorney–at–Law, Burke, VA, for Plaintiffs.

Thomas Jeffrey Salb, Breeden Salb Beasley & Duvall, Kent Pendleton Porter, United States Attorney Office, Norfolk, VA, Gregory Ernest Kennedy, Franklin & Prokopik PC, Martinsburg, WV, Jessica Leigh James, Rebecca Lynn Dannenberg, Franklin & Prokopik PC, Herndon, VA, Christopher Dwight Eib, Office of the Attorney General, Richmond, VA, for Defendants.

OPINION AND ORDER

MARK S. DAVIS, District Judge.

This matter is currently before the Court on several motions to dismiss: (1) Defendants Greenhorne & O'Mara, Inc. (“Greenhorne”), Thomas Copeland (“Copeland”), Evelyn Jones, and Daniel Jones's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and Local Rule 7 (Docket No. 7); (2) Defendant City of Chesapeake, Virginia's (“City”) Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Docket No. 12); (3) Defendant Carole Gillespie's (“Gillespie”) Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and upon the principle of Qualified Immunity (Docket No. 24); (4) Defendant United States Department of Transportation's (“USDOT”) Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Docket No. 29); and (5) Defendant Virginia Department of Transportation's (“VDOT”) Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Docket No. 31). The motions have been fully briefed and are now ripe for decision. For the reasons stated herein, the Court GRANTS the above motions to dismiss.

I. FACTUAL HISTORY¹

Plaintiffs Cleary Sky Car Wash LLC (“Clear Sky”) and Clear Sky Car Wash Operating LLC (“Clear Sky Operating”) are each limited liability companies duly authorized by the Commonwealth of Virginia. Plaintiffs Samuel Jacknin (“Jacknin”) and Charles Einsmann (“Einsmann”) are co-founders, co-organizers, and co-managers of Plaintiffs Clear Sky and Clear Sky Operating. Additionally, Plaintiff Jacknin acts as the managing agent of both Plaintiffs Clear Sky and Clear Sky Operating. Plaintiffs Clear Sky and Clear Sky Operating have operated a car wash business located at 920 Great Bridge Boulevard, Chesapeake, Virginia since 2008. Plaintiff Clear Sky owns the land, car wash equipment, and all other aspects of the car wash business located at 920 Great Bridge Boulevard (“Clear Sky Car Wash”).

Defendant City is a duly incorporated municipality of the Commonwealth of Virginia. Defendant Carole Gillespie is the Right of Way Manager for Defendant City. Defendant Greenhorne is a Maryland corporation retained by Defendant City. Defendants Copeland, Evelyn Jones, and Daniel Jones are employees of Defendant Greenhorne. Defendant VDOT is a duly authorized agency of the Commonwealth of Virginia, operated by and through its Commissioner of Highways, presently Gregory Whirley, Sr. Defendant USDOT is a duly organized agency of the United States government, operated by and through Secretary Ray LaHood.

On or about November 26, 2008, Defendant City resolved to approve a project to widen United States Route 17/Dominion Boulevard and to replace the Steel Bridge over the Southern Branch of the Elizabeth River (“Project”). The Project was a project of Defendant VDOT managed under contract by Defendant City, including Defendant City's Right of Way Manager, Defendant Gillespie. Defendant City retained Defendant Greenhorne, including Defendants Copeland, Evelyn Jones, and Daniel Jones, to perform right of way acquisition and related services for the Project. The Project received funding from Defendant City, the Commonwealth of Virginia, and the federal government. Despite such funding, the Project has allegedly suffered funding shortfalls requiring Defendant City to seek various loans and to consider alternative sources of funding, such as the implementation of tolls.

On or about February 17, 2009, Defendant City received approval of the Project's major design features from Defendant VDOT's Chief Engineer. Such design features contemplated the fee simple use of all of Plaintiff Clear Sky's land at 920 Great Bridge Boulevard (“Land”). Defendant City began acquiring parcels of land for the Project in June 2010. Defendant City first contacted Plaintiffs concerning Plaintiff Clear Sky's Land in October 2010. Plaintiffs permitted Defendant City's appraiser, Brian Dundon (“Dundon”), to enter the Land and Plaintiffs provided additional information to Dundon. Dundon's appraisal (“Dundon Report”) was signed on April 16, 2011. Such appraisal calculated the value of Plaintiff Clear Sky's Land using square footage valuation, as provided for in Defendant VDOT's Executive Summary Form, RW–45B (“Executive Summary Form”). The Dundon Report valued Plaintiff Clear Sky's Land at $13 per square foot, for a total value of $416,728 based on the Land's 32,056 square footage. According to the Complaint, on the same day that Dundon submitted his report, Defendant City advised Plaintiffs, without explanation, that it required a second appraisal. Appraisers Bradley R. Sanford and David L. Stankus submitted the second appraisal (“Sanford Report”) on or about June 13, 2011. The Sanford Report also calculated the value of Plaintiff Clear Sky's Land by square footage, but valued such Land at $17 per square foot, for a total value of $544,952. Neither appraisal considered whether an alternative method of valuing Plaintiff Clear Sky's property—pad site valuation—was more appropriate than the square foot valuation provided for by Defendant VDOT's Executive Summary form.

On or about August 9, 2011, Defendant Gillespie signed the Dundon Report and approved Plaintiff Clear Sky's Land for acquisition. Defendant Greenhorne communicated such information to Plaintiffs by letter the next day. Such letter stated that the Sanford Report had been rejected by an independent review appraiser and that the same appraiser had approved the Dundon Report for use in determining the market value of Plaintiff Clear Sky's Land and just compensation for the Land.

On or about August 30, 2011, Plaintiffs notified Defendants ² of their concerns regarding Defendant Greenhorne's letter, and asked ten questions regarding such letter and the Dundon report. Such questions included: (1) whether Defendants would assess and value an actual replacement site and existing equipment for actual replacement; (2) why the review appraiser had decided that the Sanford Report would not be used at all and was a less appropriate representation of just compensation than the Dundon Report; (3) why the Dundon Report and Defendant City used square footage valuation instead of pad site evaluation; and (4) why the Dundon Report depreciation was “based on an IRA cost recovery schedule ... accelerated over [seven] years for business tax deduction purposes” instead of on the economic life for Clear Sky Car Wash. (Compl. ¶ 112). On August 31, 2011, Defendant City, through Defendants Greenhorn and Daniel Jones, discussed Plaintiffs' letter with Plaintiffs and agreed to respond to Plaintiffs' questions. Plaintiffs agreed to wait for such answers. After twice reiterating its intent to respond to Plaintiffs' questions, Defendant City emailed its response to Plaintiffs on or about October 19, 2011.

Plaintiffs expressed their dissatisfaction with such response on October 24, 2011. Defendant City advised Plaintiffs on November 14, 2011 that it would address such concerns after an internal meeting. Defendant City provided a lengthy response on November 17, 2011.³ In such response, Defendant City noted its obligation to followstate and federal laws and regulations in its efforts to obtain Plaintiff Clear Sky's Land. In so noting, Defendant City stated that, if Plaintiffs wanted relocation benefits, they were required to apply for calculation and payment of such relocation benefits and noted that no such application had been made. Plaintiffs and Defendant City continued corresponding throughout November and December 2011 and into January 2012 regarding Plaintiffs' concerns with Defendant City's appraisal of Plaintiff Clear Sky's Land. During such correspondence, Defendant Tim Copeland advised Plaintiffs that he had conducted the appraisal reviews and that he also had oversight responsibility for Defendant Greenhorne's involvement in Project negotiations and acquisitions. On January 27, 2012,⁴ Defendant City advised Plaintiffs that it calculated just compensation at $2.15 million “based on unchanged, original calculations and analysis from the Dundon Report.” ⁵ Following the January 27, 2012 letter, Plaintiffs retained counsel who began communicating with Defendant City on behalf of Plaintiffs. Plaintiffs' counsel was advised by Defendant City's Deputy City Attorney that Plaintiffs could appeal Defendant City's “calculation of benefits” and was additionally directed not to communicate directly with Defendant City's employees and agents. On March 13, 2012, Defendant City further advised Plaintiffs' counsel in writing that it would not discuss settlement or take further action until having received an appraisal from Plaintiffs.

On March 22, 2012, Defendant City filed a Certificate of Take in the Circuit Court for the City of Chesapeake to gain a defeasible fee interest in the Land owned by Plaintiff Clear Sky. On March 30, 2012, Defendant City issued a written demand directly to Plaintiffs, and not to Plaintiffs' counsel, requiring them to vacate and turn over possession of such Land no later than May 1, 2012.⁶

II. PROCEDURAL HISTORY

On April 11, 2012, Plaintiffs removed the Certificate of Take to this Court ⁷ and simultaneously filed the separate instant action against Defendants, alleging that Defendants failed to...