Virginia Beach v. Carmichael Development
| Decision Date | 03 March 2000 |
| Docket Number | Record No. 990919. |
| Citation | 527 S.E.2d 778,259 Va. 493 |
| Court | Virginia Supreme Court |
| Parties | CITY OF VIRGINIA BEACH v. CARMICHAEL DEVELOPMENT COMPANY. |
Mark D. Stiles, Senior City Attorney (Leslie L. Lilley, City Attorney, on briefs), for appellant.
Moody E. Stallings, Jr., (Brandon H. Zeigler; Stallings & Richardson, on brief), Virginia Beach, for appellee.
Present: CARRICO, C.J., COMPTON,1 LACY, HASSELL, KEENAN, KOONTZ, and KINSER, JJ.
In this appeal, we consider whether the trial court erred in entering judgment against a locality for alleged tortious interference with a contract.
The Virginia Beach Society for the Prevention of Cruelty to Animals (the SPCA) acquired land (the property) in the City of Virginia Beach near the corner of General Booth Boulevard and Oceana Boulevard from the City for the operation of an animal shelter. The original agreement between the SPCA and the City provided that the property would revert to the City if the SPCA discontinued its use of the property. Subsequently, the City agreed to waive the reversion right and deeded the property to the SPCA in fee simple so that the SPCA might benefit from a sale of the property.
The SPCA thereafter relocated its shelter operation, but was unable to find a purchaser for the property. To enhance the marketability of the property, the SPCA obtained a rezoning of the property from agricultural to commercial use in 1986. As part of the rezoning, the City required the SPCA to dedicate "an appropriately sized controlled access and scenic easement along the frontage on General Booth Boulevard."
In April 1997, the SPCA entered into a contract for the sale of the property to Carmichael Development Company (Carmichael) for $610,000. Carmichael intended to develop the property as a shopping center and employed an engineering firm to draft a site development plan. Because the site development plan would require approval from the City director of planning or his assignee (the City planning office) for several modifications to the property, Carmichael and the SPCA subsequently amended their contract to include a condition that Carmichael obtain approval of a site plan for the proposed shopping center from the Virginia Beach City Council by April 3, 1998. Relevant to this appeal, Carmichael desired to obtain approval for a "curb cut" on General Booth Boulevard. A "curb cut" is an opening from a highway into a parking lot cut through a curb and/or the sidewalk.
Pursuant to Virginia Beach City Code, App. C, § 3.1, Carmichael requested a "preapplication conference" with the City planning office. Under this ordinance, a "preapplication conference" is an informal meeting between a developer and the City planning office to discuss a general proposal for development. The request for a conference does not constitute a formal application for approval of a site development plan or otherwise satisfy the requirements for filing such a plan.
After reviewing Carmichael's "preliminary site plan," the City planning office advised Carmichael that the proposed curb cut would not be approved because of public safety concerns over anticipated traffic problems the proposed curb cut would create on General Booth Boulevard. Although Carmichael's engineers wrote the planning officials several times indicating that Carmichael wished to receive a formal decision on the proposed curb cut so that the matter could be "appealed" to the City Council, a formal site plan application was never submitted to the City planning office for a recommendation, nor did Carmichael pay a filing fee as required by the City code. Accordingly, the City planning office took no action on Carmichael's request and the matter was not forwarded to the Office of the City Manager to be placed on the City Council's agenda.
The SPCA informed the City that the failure to approve the curb cut would defeat the consummation of its contract with Carmichael, and that it would result in the organization losing needed revenue. The SPCA asked the City to reconsider the decision to disapprove the curb cut. Thereafter, the City planning office began to explore the option of the City purchasing the property from the SPCA as part of a policy to acquire "troublesome parcels" to control development. On March 26, 1998, the City made a formal written offer to purchase the property from the SPCA for the same price Carmichael had offered.
On April 3, 1998, Carmichael informed the SPCA that it intended to file suit against the City to obtain an injunction to prohibit the City from acquiring the property. Carmichael requested an extension of its contract right to May 3, 1998 and offered to increase the purchase price by $5,000. The SPCA declined Carmichael's request for an extension and subsequently agreed to sell the property to the City.
On April 3, 1998, Carmichael filed a bill of complaint contending that the City tortiously interfered with Carmichael's contract to purchase the property from the SPCA by refusing to approve the requested curb cut and subsequently offering to buy the property from the SPCA.2 Carmichael sought monetary damages in addition to injunctive relief.
On July 31, 1998, the trial court denied Carmichael's request for a temporary injunction to prohibit the sale of the property to the City, finding that Carmichael had an adequate remedy at law. Thereafter, the parties agreed to transfer the case from the chancery docket to the law docket and to limit the issue of the suit to monetary damages for the City's alleged tortious interference with Carmichael's contract with the SPCA.
On September 9, 1998, the City filed a motion for summary judgment asserting, inter alia, that it was protected by sovereign immunity because the actions of which Carmichael complained fell within the proper governmental function of controlling land development and regulating and controlling traffic for public safety and welfare. The City was subsequently granted leave to file an amended answer asserting a defense of sovereign immunity.
The trial court heard argument on the motion for summary judgment immediately prior to trial and granted the City partial summary judgment on the ground that the approval or denial of a curb cut was a governmental function protected by sovereign immunity and, therefore, that it could not form the basis for a tort claim against the City. The trial court permitted Carmichael's case to go forward on the theory that the City's offer to purchase the property tortiously interfered with Carmichael's contract with the SPCA. The case was also permitted to go forward on the theory that the actions of the City planning office denied Carmichael the opportunity to present the request for a curb cut to City Council and, thus, interfered with its efforts to meet the condition of its contract with the SPCA. See note 2, supra.
After evidence in accord with the above-recited facts was presented, the trial court, consistent with a concession made by Carmichael, instructed the jury "that the mere fact that the City made an offer to purchase the SPCA parcel is not improper." The jury was further instructed that "[i]f you find that the City's refusal to allow the "curb cut" on General Booth Boulevard was the only reason that Carmichael did not purchase the property, then you shall find that the City's inaction was the proximate cause of Carmichael's inability to complete the contract to purchase" the property. The jury was also instructed to find its verdict for Carmichael if it found "by the greater weight if the evidence... that the City used improper methods to cause the SPCA to terminate the contract."
The jury returned its verdict for Carmichael and awarded damages of $74,000. The trial court denied the City's motion to set aside the verdict, Carmichael's motion for additur, and entered judgment on the jury's verdict. We awarded the city this appeal.
Although the City challenges the judgment against it on several grounds, the dispositive issue in this appeal is whether the trial court erred in determining that the doctrine of sovereign immunity did not shield the City from Carmichael's claim of tortious interference with a contract relationship under the specific facts of this case.
"The doctrine of sovereign immunity is `alive and well' in Virginia."...
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