Newberry Station Homeowners Ass'n, Inc. v. Bd. of Supervisors of Fairfax Cnty.

• Decision Date: 18 April 2013
• Docket Number: Record No. 121209.
• Parties: NEWBERRY STATION HOMEOWNERS ASSOCIATION, INC., et al. v. BOARD OF SUPERVISORS OF FAIRFAX COUNTY, et al.
• Court: Virginia Supreme Court

285 Va. 604

740 S.E.2d 548

NEWBERRY STATION HOMEOWNERS ASSOCIATION, INC., et al.

v.BOARD OF SUPERVISORS OF FAIRFAX COUNTY, et al.

Record No. 121209.

Supreme Court of Virginia.

April 18, 2013.

Zachary G. Williams (Carr Maloney, on briefs), for appellants.

Elizabeth D. Teare, Deputy County Attorney (David P. Bobzine, County Attorney, on brief), for appellee Board of Supervisors of Fairfax County.

No brief filed by appellee Washington Metropolitan Area Transit Authority.

Present: All the Justices.

Opinion by Justice WILLIAM C. MIMS.

In this appeal, we consider whether Code § 15.2–852(A) prohibited two members of a board of supervisors from participating in and voting on an application for a special exception. We also consider whether the circuit court erred in finding sufficient evidence to make approval of the application fairly debatable.

I. BACKGROUND AND MATERIAL PROCEEDINGS BELOW

In 2010, Iskalo CBR, LLC, (“Iskalo”) filed an application (“the Application”) for a special exception to build a Washington Metropolitan Area Transit Authority (“WMATA”) bus maintenance facility on a parcel of land in Fairfax County. The parcel comprises 5.32 acres which lie in the R–1 zoning district and 12.05 acres which lie in the I–6 zoning district. After a public hearing, the planning commission approved the facility as being substantially in accord with the comprehensive plan pursuant to Code § 15.2–2232(A) and recommendedapproval of the Application by the board of supervisors (“the Board”).¹

Newberry Station is a residential community situated a mile from the proposed facility and between 140 feet and a quarter-mile from the road over which the bus traffic would travel. If constructed, the facility would significantly increase vehicular traffic over the road, attributable not only to the buses but also to commuting employees traversing the road during both daylight and overnight hours. The Newberry Station Homeowners Association, Inc. (“the HOA”) submitted official comments to the Board recommending that it overturn the planning commission's Code § 15.2–2232(A) approval and reject the Application.

At a February 2011 public hearing, the Board's chairman and Supervisor Cook disclosed that they had received campaign contributions from attorneys representing Iskalo. In addition, Supervisor Hudgins disclosed that she was a principal director of WMATA and Supervisor McKay disclosed that he was an alternate director of WMATA. At its March 2011 meeting, the Board approved the Application by a vote of 6 to 3. The Board's chairman abstained and the three supervisors who had made disclosures voted to approve the Application.

The HOA, Brandon Farlander, and Michael Miller (collectively, “Newberry Station”) thereafter filed a complaint seeking a declaratory judgment that the Board's approval of the Application was void and an injunction barring construction of the facility.² They argued that Code § 15.2–852(A) required Supervisors Cook, Hudgins, and McKay to recuse themselves from the Board's consideration of the Application and that, had they recused themselves as required, the Application would have failed on a 3–3 vote. The complaint also alleged that the Board's approval of the Application was not fairly debatable.

The Board filed a demurrer arguing, among other things, that while Code § 15.2–852(A) required the disclosure made by the three supervisors, it did not require them to recuse themselves because they did not have a conflicting business or financial interest covered by the statute. The Board further argued that there was sufficient evidence to establish that its approval of the Application was fairly debatable.

The circuit court sustained the Board's demurrer only as to the applicability of Code § 15.2–852(A). Thereafter, the parties filed cross-motions for summary judgment. In its motion the Board again argued that the evidence was sufficient to establish that its approval of the Application was fairly debatable. The circuit court agreed. It therefore awarded the Board summary judgment and dismissed the complaint.

We awarded Newberry Station this appeal.

II. ANALYSIS

A. CONFLICTS OF INTEREST REQUIRING RECUSAL UNDER CODE § 15.2–852(A)

In its first assignment of error, Newberry Station asserts that the circuit court erred in sustaining the Board's demurrer because Supervisors Hudgins and McKay each had a conflict of interest and therefore was ineligible under Code § 15.2–852(A) to participate and vote during the Board's consideration of the Application.³ The circuit court ruled that the supervisors did not have conflicts within the meaning of the statute. This is a question of statutory interpretation which we review de novo. Manchester Oaks Homeowners Ass'n v. Batt, 284 Va. 409, 427, 732 S.E.2d 690, 701 (2012).

Code § 15.2–852(A) provides in relevant part that:

Each individual member of the board of supervisors ... in any proceeding ... involving an application for a special exception ... shall, prior to any hearing on the matter or at such hearing, make a full public disclosure of any business or financial relationshipwhich such member has, or has had within the 12–month period prior to such hearing, (i) with the applicant in such case, or (ii) with the title owner, contract purchaser or lessee of the land that is the subject of the application ..., or (iii) if any of the foregoing is a trustee (other than a trustee under a corporate mortgage or deed of trust securing one or more issues of corporate mortgage bonds), with any trust beneficiary having an interest in such land, or (iv) with the agent, attorney or real estate broker of any of the foregoing. For the purpose of this subsection, “business or financial relationship” means any relationship (other than any ordinary customer or depositor relationship with a retail establishment, public utility or bank) such member, or any member of the member's immediate household, either directly or by way of a partnership in which any of them is a partner, employee, agent or attorney, or through a partner of any of them, or through a corporation in which any of them is an officer, director, employee, agent or attorney or holds 10 percent or more of the outstanding bonds or shares of stock of a particular class, has, or has had within the 12–month period prior to such hearing, with the applicant in the case, or with the title owner, contract purchaser or lessee of the subject land ..., or with any of the other persons above specified. For the purpose of this subsection “business or financial relationship” also means the receipt by the member, or by any person, firm, corporation or committee in his behalf from the applicant in the case or from the title owner, contract purchaser or lessee of the subject land ..., or from any of the other persons above specified, during the 12–month period prior to the hearing in such case, of any gift or donation having a value of more than $100, singularly or in the aggregate.

If at the time of the hearing in any such case such member has a business or financial interest with the applicant in the case or with the title owner, contract purchaser or lessee of the subject land ..., or with any of the other persons above specified involving the relationship of employee-employer, agent-principal, or attorney-client, that member shall, prior to any hearing on the matter or at such hearing, make a full public disclosure of such relationship and shall be ineligible to vote or participate in any way in such case or in any hearing thereon.

Newberry Station argues that the statute defines “business or financial interest” as

any relationship (other than any ordinary customer or depositor relationship with a retail establishment, public utility or bank) such member ... either directly or by way of a partnership in which any of them is a partner, employee, agent or attorney, or through a partner of any of them, or through a corporation in which any of them is an officer, director, employee, agent or attorney or holds 10 percent or more of the outstanding bonds or shares of stock of a particular class, has, or has had within the 12–month period prior to such hearing, with the applicant in the case, or with the title owner, contract purchaser or lessee of the subject land....

By contrast, the Board argues that this language defines a “business or financial relationship ” and does not pertain to a “business or financial interest.” According to the Board, the General Assembly used two distinct terms in the statute and Newberry Station incorrectly uses them interchangeably. The definition of “business or financial interest,” the Board continues, is defined in the second paragraph of Code § 15.2–852(A) as an interest “involving the relationship of employee-employer, agent-principal, or attorney-client.” Therefore, the Board concludes, the statute recognizes two distinct classes of conflict and imposes different obligations on members for each class: a member who has any qualifying “business or financial relationship ” at the time of the hearing, or who has had such a relationship at any time within the 12 months preceding the hearing, must “make a full public disclosure” of the relationship; however, any member who has “a business or financial interest ” at the time of the hearing not only must “make a full public disclosure of such relationship” but also “shall be ineligible to vote or participate in any way in such case or in any hearing thereon.” Code § 15.2–852(A) (emphasis added).

Newberry Station responds that the Board's interpretation is incorrect. It argues that the phrase “involving the relationship of employee-employer, agent-principal, or attorney-client” modifies only the phrase “any of the other persons above specified.” Thus, according to Newberry Station, the second paragraph merely prohibits a business or financial interest with (1) the applicant, (2) the title owner, (3) the contract purchaser, (4) the lessee, or (5) “any of the other...