W.S. Carnes, Inc. v. Board of Sup'rs of Chesterfield County
| Decision Date | 01 November 1996 |
| Docket Number | No. 960352,960352 |
| Citation | 252 Va. 377,478 S.E.2d 295 |
| Court | Virginia Supreme Court |
| Parties | W.S. CARNES, INC., et al. v. BOARD OF SUPERVISORS OF CHESTERFIELD COUNTY, et al. Record |
Bruce E. Arkema, Richmond (Cantor, Arkema & Edmonds, on briefs), for appellants.
Steven L. Micas, County Attorney (Jeffrey L. Mincks, Deputy County Atty.; Stylian P. Parthemos, Senior Asst. County Atty., on brief), for appellees.
Present: All the Justices.
The primary issue in this appeal concerns the validity of two ordinances which impose a $125 increase in the fee charged for new residential building permits.
The Home Builders Association of Richmond, Inc. (the Association), and W.S. Carnes, Inc., a Chesterfield County homebuilder (collectively, the builders), filed a motion for declaratory judgment against the Board of Supervisors of Chesterfield County (the Board), and William D. Dupler, the Chesterfield County Building Official. The builders sought an order declaring invalid two ordinances adopted by the Board, which imposed a $125 increase in the permit fee charged for all new residential construction.
In their motion for declaratory judgment, the builders contended that the ordinances violate (1) Code § 36-105, which authorizes a locality to charge building permit fees only to defray the cost of building code enforcement and related appeals; (2) Uniform Statewide Building CODE § 104.31, which states that building permit fees shall incorporate unit rates; and (3) Code § 15.1-37.3:9(B), which prohibits the direct or indirect use of building permit fee funds for the repair of residences damaged by moisture-related shrinking and swelling in soil having a high clay content.
The builders also alleged that the ordinances violate the "special laws" prohibition of the Virginia Constitution. Va. Const. art. IV, §§ 14 and 15. Finally, the builders contended that the revenue received from the ordinances exceed the County's costs of building code enforcement. The builders sought, among other things, entry of an order declaring the ordinances invalid.
During a bench trial, Dupler testified that in 1991, the Board became aware that many houses in the County had cracked foundations caused by the use of improper construction methods for building in soil having a high clay content. This type of soil is commonly referred to as "shrink/swell" soil. Dupler stated that special construction methods are necessary for building in this type of soil because the soil places greater than normal stress on foundations, since the soil expands when wet and contracts when dry. Dupler testified that the cracked foundations were evidence of possible violations of the Uniform Statewide Building Code (building code).
To address this problem, the Board directed the County Administrator to appoint a task force to work with the Building Inspection Department to develop a program which became known as the Citizen's Assistance Program, Phase I (CAP I). The Board enacted the CAP I program in 1993.
CAP I provided for an ombudsman to render "assistance to citizens in resolving shrink/swell soil [problems] and other construction related issues." CAP I also included a provision authorizing the hiring of legal advisors to offer free advice to affected homeowners regarding their available legal remedies.
Under CAP I, homeowners who suspected that their houses had been constructed on "shrink/swell" soil could submit applications requesting the County to examine their house foundations. CAP I authorized the County to obtain the assistance of privately-employed engineers to work on these requests.
Dupler testified that the private engineering assistance was necessary because the County staff was unable to handle the large volume of homeowner requests for investigations. He also stated that his department did not have the necessary laboratory facilities to analyze the soil removed from the homeowners' building foundation sites.
Dupler further stated that, before he retained a private engineer to provide a foundation study of an existing house, his department would review the homeowner's CAP application to determine whether the house had foundation cracks. If Dupler noted conditions indicating a potential building code violation, he retained a private engineer on behalf of the County to determine the nature and extent of foundation damage due to "shrink/swell" soil. The engineer then prepared a report, for the homeowner and the County, detailing the extent of damage, the recommended repairs, and an estimated cost of repair.
Although Dupler testified that the reports frequently contained evidence of building code violations, he stated that his department had not instituted criminal enforcement actions because such actions would have been barred by the statute of limitations. However, Dupler used the engineering reports to determine whether a homeowner's proposed repair plans met building code requirements and, thus, qualified for the issuance of a repair permit.
The engineering assistance portion of CAP I was funded from the $125 increase in permit fees authorized by the ordinances. The ombudsman and legal advisor portions of CAP I were paid for out of the general fund and application fees, because these services were not part of the building code enforcement process.
The Board later terminated CAP I and adopted a program known as CAP II, which was limited to providing engineering assistance to the Building Official. Under CAP II, the private engineers hired by the County performed essentially the same functions as the engineers hired by the County under CAP I.
The engineers' reports did not contain any repair specifications and, therefore, could not be used by the homeowners' contractors to perform the necessary repair work. The homeowners were required to retain engineers at their own expense to draw foundation repair specifications, which were submitted to the County with their applications for building repair permits.
After the Building Official issued a repair permit, the homeowner's contractor performed the necessary repairs using the homeowner's repair plan. When the repairs were completed, the Building Official conducted a final inspection to determine whether the repairs had corrected the building code violation.
Like the engineering assistance provided by CAP I, the engineering assistance provided by Cap II was funded by the Board's adoption of an ordinance which increased by $125 the fee charged for new residential building permits. The balance of the permit fee was computed by use of a unit charge of $4.25 for each $1,000, or fraction thereof, of the estimated construction cost.
The trial court also received evidence concerning the builders' contention that the total permit fees exceeded the actual costs necessary to enforce the building code. Their allegations were based on the results of an audit of the Chesterfield Building Inspection Department (BID) commissioned by the Board. The audit, performed by the accounting firm of Coopers & Lybrand in December 1992, indicated that, between 1981 and 1992, BID's revenues exceeded its costs by almost $2,000,000.
The Board presented evidence that the Coopers & Lybrand audit did not include the total expenditures relating to building code enforcement. Specifically, Dupler, James J.L. Stegmaier, the County's Budget Director, and Christine Zitzow, a cost accounting expert, testified that, in order to ascertain the true cost of building code enforcement, the enforcement-related costs of three other County departments needed to be added to BID's expenses.
The three departments, Utilities, Fire, and Environmental Engineering, review all building plans and perform building inspections for the Building Official relating to building code requirements that are within those departments' expertise. The cost of these reviews and inspections were not reflected in the Coopers & Lybrand audit because the audit included only BID budget documents. Stegmaier testified that the revenues received by the County from the building permit fees, including the increases authorized by the fee ordinances, were less than the total cost of building code enforcement in 1993 and 1994.
Finally, the evidence showed that the Association does not build houses in Chesterfield County and has not paid any building permit fees such as those at issue in this suit. The Association is a nonstock corporation, which functions as a trade association and has members who are homebuilders in Chesterfield County.
The trial court initially ruled that the Association had standing to bring this action "in a representative capacity." The court also sustained the County's demurrer to Count III, ruling that the ordinances in question were not special laws within the meaning of Article IV of the Virginia Constitution.
The trial court granted the defendants' motion in limine to exclude evidence of the Board's minutes taken at the time the ordinances were passed. The court stated that, because the fee ordinances adopted by the Board were unambiguous, an examination of the Board's legislative intent was not appropriate. After considering the evidence presented, the trial court held that the CAP ordinances were valid, and that the County did not charge building permit fees in excess of the cost of building code enforcement.
On appeal, we first consider the assignment of cross error raised by the Board and Dupler (collectively, the County), that the trial court erred in ruling the Association had standing to bring this declaratory judgment action. The County argues that the Association does not have any rights which are affected by the ordinances, and that the Association is not authorized by law to bring this action on behalf of its member builders.
In response, the Association argues that, as a nonstock corporation which operates as a trade association for the common benefit of its members, the Association has standing to bring...
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