PASQUOTANK ACTION v. City of Virginia Beach

• Decision Date: 14 December 1995
• Docket Number: Civ. A. No. 2:95cv161.
• Citation: 909 F. Supp. 376
• Parties: PASQUOTANK ACTION COUNCIL, INC., Plaintiff, v. CITY OF VIRGINIA BEACH, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

909 F. Supp. 376

PASQUOTANK ACTION COUNCIL, INC., Plaintiff, v. CITY OF VIRGINIA BEACH, Defendant.

Civ. A. No. 2:95cv161.

United States District Court, E.D. Virginia, Norfolk Division.

December 14, 1995.

COPYRIGHT MATERIAL OMITTED

James Arthur Winstead, Melvin, Gourdine & Winstead, Chesapeake, VA, Harold Barnes, Barnes & Associates, Norfolk, VA, for plaintiff.

Gary Leigh Fentress, City Attorney's Office, Virginia Beach, VA, Lawrence Steven Emmert, Office of the City Attorney, Virginia Beach, VA, for defendant.

OPINION AND ORDER

DOUMAR, District Judge.

Pasquotank Action Council is a charity located in Elizabeth City, North Carolina. In 1994, it received a donation from Edwin B. Lindsley, Jr.: a small parcel of land in Virginia Beach, Virginia. For Pasquotank, the gift was apparently a mixed blessing: on the 2100 foot parcel sits a sewage pump station, which the City of Virginia Beach has owned and operated for nearly 25 years. Pasquotank now claims it is the rightful owner, and seeks to eject the City, or, alternatively, to receive compensation.

Presently before the Court in this diversity action are several issues. For the reasons set forth below, the Court FINDS that plaintiff's claim under the federal Just Compensation Clause is not ripe for adjudication and will dismiss this part of the suit without prejudice. The Court also FINDS that jurisdiction is lacking with regard to the state law claims and will DISMISS those claims without prejudice.

I. Factual and Procedural Background

Plaintiff Pasquotank Action Council, Inc. ("Pasquotank") brings this action against the City of Virginia Beach, Virginia (the "City"), a municipal corporation under the laws of the Commonwealth of Virginia, charging that the City unlawfully occupies land purportedly owned by the plaintiff, upon which the City placed a sewage pump station in the early 1970s.

Pasquotank is a non-stock, non-profit corporation located in Elizabeth City, North Carolina. Its charitable activities include, inter alia, donating food to the needy. Pasquotank has apparently been relatively inactive for much of this decade, the result of a loss of federal grant assistance in the late 1980s. Transcript of Proceedings of Oct. 31, 1995 (hereafter "Tr.") at 16, 90-91.

The testimony and stipulations reveal the following: in late August, 1950, a corporation operating under the name "Oceana Village, Inc.," recorded a subdivision plat in the Circuit Court of Princess Anne County regarding a parcel of land in what was then Princess Anne County, and is now the City of Virginia Beach. Accompanying the recordation of the plat was a "Declaration" by the corporation which set forth certain covenants and restrictions. Paragraph 11 of the Declaration stated that:

the area at the southeast corner of the subdivision, designated on the recorded Plat as "Park" is hereby expressly reserved and dedicated to public use as a Park.

Pl.Ex. 10. The recorded plat clearly shows a large section in the southeast corner which is designated as "park." Subsequent to the recordation of the plat, the deeds to each of the 155 numbered lots were sold and contained specific reference to the recorded plat and to the Declaration. See Tr. at 165; Def. Br. on Summary Judgment, Aug. 3, 1995 (attachments).

The property in dispute here is a small portion of the park site, consisting of roughly 2100 square feet. Tr. at 172. The remainder of the park site, which remains an undeveloped open space, consists of at least 70,000 square feet.¹ It is undisputed that Pasquotank is not now, and has never been, in possession of the property at issue. Nor do the parties dispute that the City currently possesses the property, and has for over 25 years. In 1969, the City commenced construction of a sewer pump station on the site. Construction was completed the following year, and sewer service to Oceana Village residents began in July, 1971. The pump station, which also serves other properties outside of Oceana Village, has operated continually since that time. The site is enclosed by a fence, and "No trespassing" signs have been placed on or near the fence. Virginia Beach tax records regarding the parcel, which date back to 1976, show that at all times since then, the parcel has been carried on the City's tax rolls as a "tax-exempt" property owned by the City. Aff. of Jerald D. Banagan, Aug. 3, 1995, ¶ 2.

In the early 1990s, Mr. Edwin B. Lindsley, Jr., a person involved in the real estate business,² approached Mr. Frederick Stant, a trustee of Oceana Village (by then dissolved) about purchasing whatever interest the corporation owned in the park site. Mr. Lindsley's entreaty apparently failed. Tr. at 111. James E. Moore, Jr., a frequent business partner of Lindsley with whom he shares an office, then approached Stant about purchasing the land. Moore stated that he went to Stant because Stant would not sell to Lindsley. Id. at 48. Meanwhile, Stant received an unsolicited letter from an attorney, Mr. Jerry Douglas, rendering a legal opinion that the City did not own the park site and that Oceana Village retained an interest in it. Id. at 98. Lindsley had employed Douglas to send the letter to Stant. Id. at 114. Stant, a retired attorney, stated that he did not know if Oceana Village had an interest in the park site. Id. at 99.

In May, 1993, Moore received an option to purchase the land. Def.Ex. 4-B. On December 14, 1993, Mr. Stant, the trustee of Oceana Village, conveyed the property, without warranty, to Mr. Moore's corporation, the Ivan Corporation. See Pl.Ex. 3. Mr. Stant, uncertain about whether Oceana Village had an interest or obligation in regard to the "park" site, demanded and received an indemnity agreement from Moore and Lindsley shielding himself from liability in the event of any subsequent litigation by any party. Tr. at 99. Moore testified that he paid $14,000 for the property, using what he characterized as a "loan" from Lindsley. Id. at 47. A week later, the Ivan Corporation transferred the property to Lindsley. Although the deed of sale states that Lindsley paid the sum of $10.00 cash and other "good and valuable considerations," both Moore and Lindsley testified that no money was paid for the transfer. Id. at 48, 117. Mr. Lindsley, quite understandably, considered that he had already paid for the property in "loaning" the $14,000 to Mr. Moore. Id. at 117.

Negotiations between an agent hired by Lindsley, Mr. Severn Kellam (a title examiner), and the City ensued. Id. at 159-60.³ Lindsley sought to convince the City, through Mr. Kellam, to relinquish its interest in the park site, and to obtain permission to subdivide the property in order to develop six residential building sites. Id. at 160; Pl.Ex. 9 (plat prepared by surveyor). The negotiations proved unsuccessful, and the matter was dropped. Tr. at 161.

After the negotiations with the City failed, Mr. Lindsley decided to "donate" that portion of the property occupied by the City and its sewage pump station. He asked an attorney whom he had previously retained on other matters, Harold Barnes, to recommend a worthy charity. Barnes, who also represents the plaintiff in the instant case, suggested Pasquotank, a North Carolina charity with which he was familiar. Barnes, who practices in this area of Virginia, is a member of a firm which has an office in Elizabeth City, North Carolina. On July 5, 1994, Lindsley made his donation. He did not donate the entire park, but only a minuscule fragment — the 2100 square foot parcel on which the sewage pump station sits. Lindsley retained the remainder of the park site, that is, the area where he hopes to develop the six residential lots.

Pasquotank's action contains three counts, all of which make the same essential charge: that Pasquotank is the rightful owner of the parcel and that the City is in unlawful possession of the sewage pump station site. Pasquotank brings an ejectment action (Count I) and an assumpsit for use and occupation action (Count III) under Virginia law. Count II charges the City with violating the Fifth Amendment to the U.S. Constitution and Article 1, Section 11 of the Virginia Constitution, both of which bar the taking of private property for public use without just compensation. Pasquotank seeks damages and injunctive relief.

On August 3, 1995, the City moved for summary judgment. During the final pretrial conference, and while the summary judgment motion was still pending, the City raised the question of whether subject matter jurisdiction was proper; that question may, of course, may be raised at any time. Fed.R.Civ.P. 12(h)(3). The Court conducted an evidentiary hearing on the jurisdictional issue on October 31, 1995.

II. Ripeness of Federal Just Compensation Clause Claim

The first issue that must be addressed is whether the claim set forth in Count II, the alleged violation of the federal Just Compensation Clause, is ripe for adjudication. It is not. When a state provides an "adequate procedure" for obtaining just compensation, a property owner cannot claim a violation of the federal provision "until it has used the state procedure and been denied just compensation." Williamson County Regional Planning Comm. v. Hamilton Bank, 473 U.S. 172, 196, 105 S.Ct. 3108, 3121, 87 L.Ed.2d 126 (1985). Virginia provides two means, a self-executing provision in the state constitution, Va. Const. of 1970, art. I, § 11, Burns v. Fairfax County Bd. 218 Va. 625, 238 S.E.2d 823, 825 (1977) (citing Heldt v. Tunnel Dist., 196 Va. 477, 482, 84 S.E.2d 511, 515 (1954)) (landowner may enforce right in common law action), and a statutory mechanism. Va.Code Ann. §§ 8.01-184 and 8.01-187. The constitutional remedy and the statutory remedy are not mutually exclusive; either may be used by an aggrieved landowner. Chaffinch v. Chesapeake & Potomac Tel. Co., 227 Va. 68, 313 S.E.2d 376, 378 (1984).

Pasquotank concedes that it has not availed itself of the available Virginia remedies. Tr. at...