Dumfries-Triangle Rescue Squad, Inc. v. Bd. of Cnty. Supervisors of Prince William Cnty.

• Citation: 849 S.E.2d 117,299 Va. 226
• Decision Date: 22 October 2020
• Docket Number: Record No. 191000
• Parties: DUMFRIES-TRIANGLE RESCUE SQUAD, INCORPORATED v. BOARD OF COUNTY SUPERVISORS OF PRINCE WILLIAM COUNTY
• Court: Virginia Supreme Court

299 Va. 226

849 S.E.2d 117

DUMFRIES-TRIANGLE RESCUE SQUAD, INCORPORATED

v.BOARD OF COUNTY SUPERVISORS OF PRINCE WILLIAM COUNTY

Record No. 191000

Supreme Court of Virginia.

OCTOBER 22, 2020

Matthew A. Westover (John H. Foote, Garth M. Wainman ; Walsh, Colucci, Lubeley & Walsh, on briefs), Woodbridge, for appellant.

Megan E. Kelly, Deputy County Attorney for appellee.

Amicus Curiae: Local Government Attorneys Association of Virginia (Martin R. Crim, Manassas; Vanderpool, Frostick & Nishanian, on brief), in support of appellee.

PRESENT: All the Justices

OPINION BY JUSTICE CLEO E. POWELL

In this appeal, we consider whether the Board of County Supervisors of Prince William County, Virginia (the "Board") had the authority to dissolve the corporate status of Dumfries-Triangle Rescue Squad, Incorporated ("DTRS"). For the following reasons, we will reverse the judgment of the Circuit Court of Prince William County ("circuit court").

I. BACKGROUND

DTRS was registered with the State Corporation Commission ("SCC") in 1959 as a Virginia non-stock corporation under "the provisions of Chapter 2 of Title 13.1." The articles of incorporation list the purposes of DTRS: "[t]o assist in the saving of life, administer first aid and teach methods of safety."

DTRS is the fee simple owner of real property (the "Graham Park Property"), valued at $1,625,100 on a 2018 tax assessment, from which it operated its emergency medical services ("EMS") station. The Graham Park Property was originally four separate parcels of land accumulated by DTRS from 1969 through 1984. Upon the purchase of the fourth parcel, DTRS filed an Owner's Consolidation and Dedication on October 27, 1984, creating a unified 2.6805-acre parcel. The Graham Park Property includes the real property, the EMS station and other accessory structures.

Over the years since its incorporation, DTRS entered into various contracts with the Board to provide emergency medical services for Prince William County. The record, however, does not disclose when DTRS began contracting with the Board. Pursuant to the August 27, 2009 contract, DTRS agreed to provide fire and/or rescue services in compliance with all applicable regulations in exchange for receiving public funds.

On August 1, 2017, the Board established the Prince William County Fire and Rescue System. In October 2017 and January 2018, the Board adopted resolutions numbered 17-526 and 18-049 (the "resolutions") terminating their 2009 agreement with DTRS and dissolving the corporate status of DTRS. The Board cited Code §§ 27-10¹ and 32.1-111.4:7(D) as authorization for its ability to dissolve DTRS.²

In July 2018, the Board filed a complaint for declaratory judgment against DTRS asserting that the Board had the authority to dissolve DTRS's corporate status under Code § 32.1-111.4:7(D). The Board asked the circuit court to issue temporary and permanent injunctions enforcing the resolutions against DTRS. The Board also requested that the circuit court appoint a receiver to liquidate and distribute DTRS's remaining corporate assets and to wind up its affairs, specifically requesting the liquidation and/or distribution of the Graham Park Property and its buildings.³

DTRS filed a demurrer and plea in bar arguing that the complaint failed to state a claim against DTRS and was barred because the Board did not have the power to dissolve a private nonstock corporation and assume ownership of its real property. The Board continued to argue that it did have the power to dissolve DTRS under Code § 32.1-111.4:7(D). The circuit court held a hearing and overruled the demurrer, finding that the Board "ha[d] plenary power to" dissolve the "corporate entity itself." Specifically, the court entered an order overruling the demurrer stating,

pursuant to [Code] § 32.1-111.4:7(D), [the Board] has the plenary power to dissolve the corporate existence of a volunteer emergency medical services agency or rescue squad, incorporated pursuant to Chapter 10 of Title 13.1, Va. Code Ann., which operates under the authority of the Board, pursuant to [Code] § 32.1-111.4:7.

The Board filed a motion for summary judgment asserting that it had the statutory authority under Code § 32.1-111.4:7(D) to dissolve DTRS and wind up its corporate affairs. The circuit court held a hearing regarding the motion for summary judgment and DTRS's plea in bar. During the hearing, the Board argued that Hanshaw v. Day , 202 Va. 818, 120 S.E.2d 460 (1961), stands for the proposition that the Board can exercise its police powers to distribute DTRS's assets "so as to insure their continued use for public and civic purposes." DTRS argued that because the Board had no authority to dissolve the corporate status of DTRS, it therefore had no authority to distribute DTRS's property and assets.

The circuit court denied the plea in bar, stating that DTRS's "very existence is at the whim if you will of the County, but then they have the authority as well to assume or to force this dissolution." The court entered a permanent injunction, finding that Code § 13.1-907(A)(3)⁴ applied due to the "eleemosynary as well as benevolent" purposes of DTRS and its assets.

The final order reflects the circuit court's determination that DTRS constituted an "EMS agency, incorporated pursuant to Article 13 of Title 13.1, Va. Code Ann.," which "entered into an agreement with the Board" to provide EMS services. The court also found that DTRS was a non-governmental "EMS agency" due to

its long term service as an arm of the Board and a member of the fire and rescue system, created by ordinance of the Board, and its long standing contractual relationship with the Board, under which it has submitted itself to the authority of the Board in exchange for receiving public funds for its operation.

The court further held that DTRS was "subject to the control and management of the Board pursuant to [Code] § 32.1-111.4:7." The circuit court determined that because DTRS was "[a] non-stock corporation set up to provide rescue services to the public under the laws of Virginia [it] cannot exist without the approval of the Board ... [and] was, therefore, subject to the corporate dissolution authority of the Board pursuant to [Code] § 32.1-111.4:7(D)." The circuit court appointed a receiver, pursuant to Code § 13.1-910, to wind up DTRS's corporate affairs as requested by the Board. DTRS's motion to stay execution of the final order pending appeal was denied by the circuit court.

DTRS appealed to this Court and moved to stay execution of the final order. The Court granted the motion to stay execution of the final order and awarded DTRS this appeal.

II. ANALYSIS

On appeal, DTRS argues that the Board lacked the authority to dissolve DTRS's corporate status under Code § 32.1-111.4:7(D) because it was incorporated under Title 13.1 and not Title 32.1. The Board argues the opposite, asserting that Code § 32.1-111.4:7(D) does give them the power to dissolve DTRS because it was an EMS agency.

"Whether a municipality has the power to act is a question of law we review de novo." Bragg Hill Corp. v. City of Fredericksburg , 297 Va. 566, 578, 831 S.E.2d 483 (2019). "The Dillon Rule of strict construction controls our determination of the powers of local governing bodies." Id. (quoting Marble Techs., Inc. v. Hampton , 279 Va. 409, 417, 690 S.E.2d 84 (2010) (citation and internal quotation marks omitted)). We have consistently applied Dillon's Rule, which provides that local governing bodies, like the Board, "have only those powers that are (1) expressly granted by the General Assembly, (2) ‘necessarily or fairly implied’ from those express powers, and (3) ‘essential to the declared objects and purposes’ of the municipality." Id. (quoting Chesapeake v. Gardner Enters. , 253 Va. 243, 246, 482 S.E.2d 812 (1997) ). "If there is a reasonable doubt whether legislative power exists, the doubt must be resolved against the local governing body." Board of Supervisors v. Reed's Landing Corp. , 250 Va. 397, 400, 463 S.E.2d 668 (1995).

"In applying the Dillon Rule, we first examine the plain terms of the legislative enactment to determine whether the General Assembly expressly granted a particular power to the municipal corporation." Marble Techs., Inc. , 279 Va. at 418, 690 S.E.2d 84. "If the power is not expressly granted, we then ‘determine whether the power ... is necessarily or fairly implied from the powers expressly granted by the statute.’ " Id. (quoting Gardner Enters. , 253 Va. at 247, 482 S.E.2d 812 ). "When the language of a statute is unambiguous, we are bound by the plain meaning of that language." Conyers v. Martial Arts World of Richmond, Inc. , 273 Va. 96, 104, 639 S.E.2d 174 (2007).

Code § 32.1-111.4:7(D) provides:

An emergency medical services agency established pursuant to this section may be dissolved when the local governing body of the county, city, or town in which the emergency medical services agency is located determines that the emergency medical services agency has failed, for three months successively, to have or keep in good and serviceable condition emergency medical services vehicles and equipment and other proper implements, or when the governing body of the county, city, or town for any reason deems it advisable.

(Emphasis added.) Based on the plain language of Code § 32.1-111.4:7(D), a local governing body, like the Board, may only dissolve an emergency medical services agency if it was "established pursuant to" that section. DTRS was not "established pursuant to" Code § 32.1-111.4:7. Rather, pursuant to its Articles of Incorporation, it was established under Title 13.1 as a private, nonstock corporation. Indeed, it could not have been "established pursuant to" Code § 32.1-111.4:7 because DTRS existed as a corporation registered with the SCC since 1959, well prior to the enactment of Code § 32.1-111.4:7. Moreover, after the Board severed its contractual relationship with DTRS, DTRS continued as a private, nonstock corporation, in good standing...