Dr. Allan L. Bergano, D.D.S., P.C. v. City of Va. Beach
| Citation | 241 F.Supp.3d 690 |
| Decision Date | 10 March 2017 |
| Docket Number | Civil Action No. 2:15cv520 |
| Parties | DR. ALLAN L. BERGANO, D.D.S., P.C. and Dr. Allan L. Bergano, D.D.S., Plaintiffs, v. CITY OF VIRGINIA BEACH, Gail E. Salmons, and Philip A. Davenport, Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
Counsel for Plaintiffs: Brian G. Kunze, Jeremy P. Hopkins, Joseph T. Waldo, Waldo & Lyle PC, 301 W. Freemason Street, Norfolk, VA 23510
Counsel for Defendants: Hunter W. Sims, Jr., Clark J. Belote, Kaufman & Canolcs PC, 150 W. Main Street, Norfolk, VA 23510
This matter is before the Court following a bench trial held February 7, 2017 through February 9, 2017 at which Plaintiffs Dr. Allan L. Bergano, D.D.S. ("Dr. Bergano") and Dr. Allan L. Bergano, D.D.S., P.C. ("Plaintiffs") and Defendants City of Virginia Beach ("City"), Gail E. Salmons, and Phillip A. Davenport ("Defendants") presented evidence and argument. After the trial, the Court FOUND the City liable to Plaintiffs. The Court instructed the Parties to submit briefs for the Court to consider in ruling on damages, including whether Plaintiffs are entitled to attorneys' fees. These findings of fact and conclusions of law explain the Court's reasoning as to liability.
Plaintiffs are a dental practice and a dentist. Defendant Salmons is a Right of Way Agent for the City, and Defendant Davenport is the Director of Public Works for the City. Dr. Bergano operated a dental practice at 256 North Witchduck Road, Virginia Beach, Virginia for over thirty (30) years and served approximately 2,000 patients. For that entire period, Dr. Bergano leased office space in the Witchduck Office Court building owned by Jerry Collier ("the Witchduck building"). The Parties agreed that Mr. Collier and Dr. Bergano maintained an excellent landlord-tenant relationship. By 2014, Dr. Bergano leased approximately 1,350 square feet of space in the Witchduck building.
The Witchduck building is bounded by North Witchduck Road, a heavily trafficked thoroughfare; Admiral Wright Road; and Jersey Avenue. Curb cuts into the parking lot provide visitors with access points from each road. In early 2014, Dr. Bergano's wife, an employee at the dental practice, attended a public meeting on the City's proposed project ("the Project") to widen Witchduck Road, the heavily trafficked thoroughfare. At the meeting, Mrs. Bergano learned that the City's construction plans would eliminate parking spaces around the Witchduck building, limit direct access from the property to North Witchduck Road, and convert the adjoining Admiral Wright Road into a cul-de-sac. The Project received federal and state funding. See Def. Ex. 3.
In the spring of 2014, James Lawson, a City real estate agent, learned that the City planned to purchase a portion of the Witchduck building property to facilitate its widening project. Mr. Lawson approached City Council with the City's plan to purchase the property. David Hansen, then a deputy City Manager, discussed the property purchase with Mr. Lawson, and they concluded that the City would use the Witchduck building to house other City offices and personnel. Pl. Ex. 20. In fact, evidence at trial established that by July 17, 2014, Mr. Hansen and the City had purposed to let Plaintiffs continue leasing space in the building for the foreseeable future. Mr. Hansen testified, "[I]t was clear to me that we did not need that space."
Mr. Lawson arranged for two (2) appraisals of the portion of the property the City planned to purchase. The first appraisal was approximately $78,000. However, Mr. Lawson recognized that the City's Project would eliminate up to eighteen (18) parking spaces around the Witchduck building and potentially incentivize drivers to cut through the property as a shortcut to North Witchduck Road. He raised these concerns with the appraiser, and the appraiser reevaluated the damage to the residue of property at over $601,000. Pl. Ex. 20. Mr. Lawson then met with Defendant Davenport, and the City decided to acquire the entire Collier property rather than a portion because the damage to the residue would equal a large percentage of its entire value. The City offered to purchase the entire Witchduck building property in the spring of 2014. At trial, the Court additionally FOUND that while the City was negotiating the purchase of the Witchduck building, the City instructed Mr. Collier not to extend existing leases or negotiate new leases with tenants. In exchange, the City paid him additional monies corresponding to the rent payments he would have received had he retained two other tenants and acquired an additional tenant. See Pl. Ex. 11. Mr. Collier closed on the purchase of the entire Collier property by the City on September 9, 2014.
At trial, Mr. Lawson testified that the City policy was to inform tenants that the City had purchased their landlords' property only after the sales were completed because this practice prevented tenants from prematurely ending their leases. However, in July 2014, before the City purchased the Collier property, Mr. Lawson informed its only tenant, Dr. Bergano, that the City would purchase the Witchduck building. At Deputy City Manager Hansen's direction, Mr. Lawson told Dr. Bergano that he would need to relocate his dental practice because the City would be using the entire property. Mr. Lawson communicated the implication of the Project to Dr. Bergano and informed him that the City could execute a new month to month lease with him before he would have to relocate. Mr. Lawson retired at the end of 2014, and Defendant Salmons replaced him as the City's relocation liaison officer to Plaintiffs.
Dr. Bergano testified that the City informed him of its acquisition of the Witchduck building and required him to sign a new month to month "Possession Agreement"1 with the City within ten (10) days or forfeit his relocation benefits. On September 9, 2014, though it restricted his rights compared to his previous lease, Dr. Bergano entered into a Possession Agreement ("PA") with the City. Pl. Ex. 5. The PA allowed Plaintiffs to "stay in the Premises pending relocation ... for a period of twelve months, beginning on September 9, 2014, and ending no later than September 15, 2015." Id. , ¶ C. Dr. Bergano understood that he needed to relocate his practice by September 15, 2015 and accordingly began searching for a new practice location. On September 15, 2014, Defendant Salmons delivered a letter and attachments to Dr. Bergano at his practice. Def. Ex. 48. The letter indicated that Plaintiffs were eligible for relocation benefits, and the attachments included the City's Business Relocation Assistance brochure, which contained information about benefit options as well as information concerning appeal rights from an adverse decision by a city official. Id. ; see Pl. Ex. 6.
In August 2015, the City relocated five (5) divisions of its Human Services Department ("HSD") to the Witchduck building. Dr. Bergano testified that the presence of his new cotenants "created a very toxic environment:" all HSD office doors were locked; a security guard monitored the building twenty-four (24) hours a day; inmates in orange jumpsuits assisted in moving the HSD offices into the building, Def. Exs. 102, 112, 114, 119, 126, 127, 138;2 inmates in orange jumpsuits escorted by guards visited the building for periodic evaluations; and the City posted a "Police Parking Only" sign reserving a parking space for City police cars. Pl. Exs. 16, 17. The security guard once harassed a young African American male dental patient and even once questioned Dr. Bergano why he was present at the building. Dr. Bergano indicated that HSD clients often entered his offices to ask for directions to the HSD offices because Dr. Bergano's door was the only unlocked door, and if the practice provided unsatisfactory answers, some clients became angry. Dr. Bergano testified that he "felt like a hostage," and his staff and patients felt threatened. HSD clients also slept overnight in the Witchduck building parking lot, and the increased activity at the building made parking difficult for his patients and staff. Dr. Bergano testified that his lease with Mr. Collier had reserved eight (8) parking spaces for the dental practice, and when he complained to the City about the parking difficulties after HSD's move, the City reserved only four (4) spaces for the dental practice although he and his staff alone needed five spaces.
Dr. Bergano testified that Defendant Salmons instructed him that he would receive relocation benefits only if he submitted to the City a signed lease for a new property, bids for the necessary modifications or "build-out" of the property, and bids for any new required dental equipment. Evidence at trial indicated that Defendant Salmons repeatedly encouraged Plaintiffs to keep the City informed about their progress and expenses during their relocation search process. Def. Ex. 81.
Therefore, Plaintiffs hired commercial real estate broker John Wessling to search for a new dental practice location. After a few months of unsuccessful searching, during which Plaintiffs suffered fire damage to their home, Plaintiffs hired another broker, Robert Carter, who was recommended by a physician friend. Mr. Carter and Plaintiffs examined various properties, visited approximately seven (7), and eventually chose 4460 Corporation Lane, Virginia Beach, Virginia. Mr. Carter testified that access was an important concern in locating a suitable property, as was parking. The Corporation Lane suite was previously used as a general medical practitioner's office and needed substantial renovations to make it suitable for a dental office. Dr. Bergano and Mr. Carter testified...
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