Lamar Corp. v. City of Richmond
| Decision Date | 01 March 1991 |
| Docket Number | No. 900948,900948 |
| Court | Virginia Supreme Court |
| Parties | The LAMAR CORPORATION, et al. v. CITY OF RICHMOND. Record |
Sandy T. Tucker (George W. Marget, III; Williams, Mullen, Christian & Dobbins, Richmond, on briefs), for appellants.
Michael L. Sarahan, Asst. City Atty. (G. Timothy Oksman, City Atty., on brief), for appellee.
Present: CARRICO, C.J., COMPTON, STEPHENSON, RUSSELL, WHITING, and LACY, JJ., and COCHRAN, Retired Justice.
The primary issue we must decide on this appeal is whether a lessee, who erects a billboard on the property he leases, has an interest in either the billboard or the underlying property which entitles him to a separate condemnation proceeding to ascertain just compensation when the underlying leasehold property is condemned.
John D. Williams and William K. Norman, Jr., owned certain property located in the City of Richmond just south of the Maury Street interchange bordering the Richmond-Petersburg Turnpike. By lease dated March 1, 1985, Williams and Norman leased a portion of the property to the Lamar Corporation, and on May 6, 1987, they leased the remaining portion to Whiteco Metrocom, Inc., for the purpose of erecting outdoor advertising structures on the sites. The leases provided that Lamar and Whiteco would be the exclusive owners of the structures and could remove them before or at the termination of the lease.
In conjunction with the James River Floodwall Project, a joint undertaking with the federal government, the City instituted condemnation proceedings on a portion of the above property in February 1989. On February 21, 1989, the trial court entered an order vesting fee simple title to the property in the City. Thereafter, the City provided Lamar and Whiteco relocation notices as required under the Uniform Relocation Assistance and Real Property Acquisition Policies Act, 42 U.S.C. §§ 4601, et seq. (1970) (the Act), which was applicable to the project. The City informed Lamar and Whiteco that it would pay actual relocation expenses for the billboards, or $8,920 in lieu of such expenses.
In addition to corresponding with the City regarding the fate of the billboards, Lamar and Whiteco sought a zoning variance to allow relocation of the signs to a portion of the leased property which was not included in the condemnation. On December 6, 1989, the board of zoning appeals denied Lamar's application and, in light of this determination, Whiteco ceased pursuing its request.
In December 1989, with the billboard matter still unresolved, the City filed a motion requesting the trial court to authorize removal of the billboards. Lamar and Whiteco appeared specially at a December 20 hearing and requested that the court compel the City to acquire their property interests by eminent domain procedures in compliance with § 18.03 of the City Charter. The City suggested that Lamar and Whiteco intervene in the proceedings, but Lamar and Whiteco refused to do so, insisting that the City initiate a separate condemnation proceeding for their benefit. Lamar and Whiteco, who were represented by the same counsel who represented the landowners, persisted in this refusal until after their counsel had endorsed a consent order, entered December 27, 1989, in which the owners agreed with the City that $360,000 would be a just compensation for "all right, title and interest in the property and property rights acquired herein, to include damages, if any." This order provided that the entire award "shall be paid to and owned by Williams and Norman to the exclusion of all others...." The order was endorsed "We ask for this" by counsel for Williams, Norman, Lamar, and Whiteco. The endorsement for Lamar and Whiteco is followed by the words "(special appearance)."
On January 16, 1990, the court entered an order allowing the City to remove the billboards. That same day, although they had declined to intervene at the December 20, 1989 hearing, Lamar and Whiteco filed a motion seeking leave to intervene, and requesting the appointment of commissioners to determine just compensation for the billboards and their leasehold interests. The court denied the motion on April 11, 1990 holding that neither Lamar nor Whiteco had a condemnable interest and that they were entitled only to relocation expenses under the Act.
On appeal, Lamar and Whiteco assert that, under Virginia law, they have condemnable interests in the advertising structures themselves, and in the underlying leasehold property, and that these interests have been taken without just compensation and without due process of law.
Lamar and Whiteco contend that the leases they executed with Williams and Norman created interests in the underlying real property which are condemnable interests entitling them to due process and just compensation.
In this case, the City, acting pursuant to § 18.03 of the City Charter, acquired fee simple title to the property upon the filing of the condemnation petition and the deposit of the requisite funds with the court. At that point, all interests in the condemned property are transferred to the deposited fund. See May v. Dewey, 201 Va. 621, 633, 112 S.E.2d 838, 847 (1960) (citing Stanpark Realty Corp. v. City of Norfolk, 199 Va. 716, 101 S.E.2d 527 (1958)); Code § 25-46.28. Thereafter, the court distributes the fund " 'as to it may seem right, having due regard to the interest of all persons therein, whether such interest be vested, contingent or otherwise....' " May, 201 Va. at 631, 112 S.E.2d at 846 (quoting former Code § 25-26). Where, as here, the condemned property is subject to a lease, the lessee is not a proper party to the condemnation proceeding but rather "the proper course is to ascertain the entire compensation as though the property belonged to one person, and then apportion this sum among the different parties according to their respective rights." Fonticello Mineral Springs Co. v. City of Richmond, 147 Va. 355, 369, 137 S.E. 458, 463 (1927) (citation omitted).
Although a lessee, in condemnation proceedings, may suffer a taking of, or damage to, his leasehold, for which he is entitled to compensation from the condemnation award, neither our prior decisions nor the authorities Lamar and Whiteco cite support their contention that a lessee has a separate, condemnable interest entitling him to a separate condemnation proceeding.
Nevertheless, Lamar and Whiteco respond that the condemnation proceeding itself was invalid because they, as "tenants of the freehold," were not given notice as required by § 18.03 of the City Charter. Therefore, they contend, the City was not vested with fee simple title in the property and their interests were not transferred to the award. This argument assumes Lamar and Whiteco were "tenants of the freehold."
We have defined "tenant of the freehold" as a tenant in possession appearing as the visible owner. Fonticello, 147...
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