Case Title: PKO Ventures, LLC v. Norfolk Redev. & Housing Auth.

Citation: 

Docket Number: 

State: virginia

Court: Virginia Supreme Court

Date: 2013-09-12T00:00:00Z

Document:
Present:  Kinser, C.J., Lemons, Millette, Mims, McClanahan, 
Powell, JJ. and Lacy, S.J. 
 
PKO VENTURES, LLC 
 
    
    OPINION BY 
v. Record No. 121534 
    JUSTICE LEROY F. MILLETTE, JR. 
 
 
 
   September 12, 2013 
NORFOLK REDEVELOPMENT AND HOUSING AUTHORITY 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK 
Louis A. Sherman, Judge 
 
 
In this appeal we consider whether a redevelopment and 
housing authority may acquire by process of eminent domain 
unblighted private property located within a blighted area 
designated for redevelopment subsequent to a statutorily imposed 
limitation on acquisition by condemnation to only those 
properties that are themselves blighted. 
I.  Facts and Proceedings 
A. 
Creation of the Redevelopment Project and Earlier 
Acquisitions 
 
In January 1998, the Council of the City of Norfolk 
approved the Hampton Boulevard Redevelopment Project ("the 
Redevelopment Project") created by the Norfolk Redevelopment and 
Housing Authority ("NRHA") under the authority of Code §§ 36-49 
and 36-51.  Code § 36-49 authorizes a redevelopment and housing 
authority to "adopt a redevelopment plan for a designated 
redevelopment area to address blighted areas."  A redevelopment 
and housing authority is "specifically empowered to carry out 
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any work or undertaking in the redevelopment area[,]" including 
"[a]cquir[ing] blighted areas."  Code § 36-49(A)(1). 
Code § 36-51(A) authorizes localities to "approve 
redevelopment plans through their governing body or agency 
designated for that purpose."  The properties affected by the 
Redevelopment Project included a nine and one-half block area 
bounded by Hampton Boulevard on the west, 48th Street on the 
north, Killam Avenue on the east, and 38th Street on the south, 
all within the City of Norfolk. 
The NRHA's approval of the Redevelopment Project was based 
upon a redevelopment study which determined that the 
Redevelopment Project area was blighted due to incompatible land 
uses, disrepair, environmental risks, demographic changes, and 
high crime rates.  Based upon the study, the NRHA concluded 
that, without eliminating these factors, the adverse impact on 
the general welfare would increase.  The proposed Redevelopment 
Project's properties were classified as good, fair, or poor.  
The latter classification indicated a structure with extensive 
exterior deterioration and an unlikely economic feasibility of 
rehabilitation.  Of all the properties, twenty percent were 
classified as poor.  The Redevelopment Project area was selected 
to assist in the orderly expansion of Old Dominion University 
("ODU"), a public university located immediately adjacent to the 
Redevelopment Project. 
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Following approval of the Redevelopment Project, two 
decisions of the Circuit Court of the City of Norfolk, in 1999 
and 2009, rejected challenges to the NRHA's condemnation of 
several of the individual properties within the Redevelopment 
Project.  In 1999, the circuit court held that the area 
designated for the Redevelopment Project was blighted under Code 
§ 36-49.  Norfolk Redevelopment & Hous. Auth. v. J.A.G. Assocs., 
No. CL99-1100 (Norfolk Cir. Ct. Nov. 16, 1999) (order overruling 
jurisdictional defenses).  In 2009, in rejecting a challenge to 
a subsequent petition to condemn other individual properties 
within the Redevelopment Project, the circuit court held that 
the doctrine of stare decisis prevented these landowners from 
relitigating the 1999 determination that the Redevelopment 
Project was blighted and that the NRHA did not act in an 
arbitrary or unreasonable manner.  The circuit court, in the 
alternative, confirmed that the area was blighted.  Norfolk 
Redevelopment & Hous. Auth. v. Arney, No. CL08-1918 (Norfolk 
Cir. Ct. July 23, 2009)(letter opinion). 
In its 2009 order, the circuit court also addressed a claim 
contesting the propriety of ODU's agreement with the NRHA in 
which ODU agreed to pay the NRHA a commission of four percent of 
the total land assembly costs incurred for the acquisition of 
property within the Redevelopment Project area.  According to 
the Cooperation Agreement between the NRHA and ODU, land 
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assembly costs included appraisals, the title search, 
environmental studies, title insurance, surveys of individual 
parcels, and the purchase price for properties acquired by deed 
or condemnation.  The circuit court held that the NRHA's 
acceptance of a commission of four percent of the total land 
assembly costs from ODU did not create an improper agency 
relationship between the NRHA and ODU. 
B. 
Acquisition of the Subject Property 
On April 21, 2010, the NRHA, after making an unsuccessful 
offer to purchase, filed a petition to condemn the subject 
property ("the Property") under the authority of Code § 36-49.  
The Property is a parcel of land comprised of approximately 
10,000 square feet located at 1069 West 41st Street in the City 
of Norfolk and improved by a ten-unit residential apartment 
building, then owned by PKO Ventures, LLC ("PKO").  According to 
a stipulation between the parties, the Property was not blighted 
at the time that the NRHA filed its petition.  The petition 
indicated that the Redevelopment Project had been approved and 
that the Property was included within the designated 
Redevelopment Project area.  The petition requested that the 
circuit court condemn the Property and pass title to the 
Property in fee simple to the NRHA.  PKO filed an answer and 
grounds of defense to the NRHA's petition for condemnation. 
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The NRHA filed a motion to strike PKO's objections and 
affirmative defenses.  It argued that the doctrine of stare 
decisis precluded PKO from challenging the NRHA's acquisition of 
its Property by eminent domain because the court had twice 
upheld challenges to the Redevelopment Project in 1999 and 2009.  
PKO filed a response to the NRHA's motion to strike. 
In response to the NRHA's motion to strike, PKO argued that 
(1) Code § 1-219.1 precluded the NRHA from acquiring PKO's 
unblighted Property after July 1, 2010, (2) stare decisis does 
not apply because the particular objections and defenses raised 
by PKO were not raised in 1999 or 2009, and in part could not 
have been raised because the law then in effect was different, 
and (3) the NRHA violated due process requirements because it 
had a pecuniary interest in the outcome which biased its 
decision to condemn properties constituting the Redevelopment 
Project. 
The Circuit Court of the City of Norfolk, after a hearing 
on the matter, denied PKO's objections and defenses to the 
acquisition of the Property, granted the NRHA's motion to strike 
in part, and authorized the NRHA to acquire PKO's Property by 
eminent domain.  In its letter opinion, the circuit court 
reasoned that the law that was in effect on the day the petition 
was filed controlled, and that, otherwise, the retroactive 
application of Code § 1-219.1 to discontinue the case would be 
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in violation of Code §§ 1-9 and 1-239.  The circuit court also 
held that the Redevelopment Plan was lawful, applying the 
results of the 1999 and 2009 cases to the present case by virtue 
of the doctrine of stare decisis.  At the conclusion of the 
subsequent July 2012 jury trial to determine just compensation 
for the Property, the NRHA acquired the Property for $550,000.  
PKO filed a timely appeal, and we granted review on all 
assignments of error. 
II. 
Discussion 
A. 
Whether the Circuit Court Erred by Permitting the NRHA to 
Acquire the Property at Issue After July 1, 2010 
 
1. 
Legislative History of Code § 1-219.1 
 
The Virginia General Assembly in 2007 enacted Chapters 882, 
901 and 926, all of which are substantively identical 
(collectively "Chapter 882").  Paragraph 1 of Chapter 882 added 
the current § 1-219.1 to the Code of Virginia.  As relevant 
here, the legislation provided that property taken for 
condemnation must itself be blighted at the time the petition 
for condemnation is filed: 
  A. The right to private property being a 
fundamental right, the General Assembly 
shall not pass any law whereby private 
property shall be taken or damaged for 
public uses without just compensation.  The 
term "public uses" mentioned in Article I, 
Section 11 of the Constitution of Virginia 
is hereby defined as to embrace only the 
acquisition of property where: . . . (v)  
the property is taken for the elimination of 
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blight provided that the property itself is 
a blighted property. 
 
. . . . 
 
  B. For purposes of this section: "Blighted 
property" means any property that endangers 
the public health or safety in its condition 
at the time of the filing of the petition 
for condemnation and is (i) a public 
nuisance or (ii) an individual commercial, 
industrial, or residential structure or 
improvement that is beyond repair or unfit 
for human occupancy or use. 
 
Code § 1-219.1(A), (B) (emphasis added). 
Paragraph 3 of Chapter 882 provides: 
until July 1, 2010, the provisions of this 
act shall not affect the ability of a 
redevelopment and housing authority 
organized pursuant to Title 36 of the Code 
of Virginia to acquire property pursuant to 
any redevelopment or conservation plan 
adopted prior to January 1, 2007.  However, 
the provisions of this act shall be 
applicable to all redevelopment and 
conservation plans adopted after January 1, 
2007. 
 
(Emphasis added.)  Paragraph 4 of Chapter 882, as amended by 
Acts 2010, ch. 203, provides: 
[n]othing contained in this act shall 
prohibit the Norfolk Redevelopment and 
Housing Authority or the City of Norfolk to 
acquire property located at . . . , both 
located in the City of Norfolk, through the 
use of eminent domain for the location of a 
recreational facility open to the public to 
be owned or operated by a not-for-profit 
entity, provided such acquisitions are 
instituted prior to January 1, 2011. 
 
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(Emphasis added). 
2. 
Statutory Interpretation of Code § 1-219.1 and Paragraphs 3 
and 4 of Chapter 882 
 
PKO, in its first assignment of error, contends that the 
circuit court erred in allowing the NRHA to acquire the Property 
after July 1, 2010 by a condemnation action that the NRHA filed 
before July 1, 2010.  PKO argues that the circuit court erred 
because: (1) the Property was not blighted at the time the 
petition was filed, as required by Code § 1-219.1, and (2) the 
acquisition of unblighted property was prohibited beginning on 
July 1, 2010, as indicated in Paragraph 3 of Chapter 882. 
PKO's assignment of error presents an issue of statutory 
interpretation of both Code § 1-219.1 and Paragraphs 3 and 4 of 
Chapter 882.  This presents a pure question of law which we will 
review de novo.  Laws v. McIlroy, 283 Va. 594, 598, 724 S.E.2d 
699, 702 (2012).  When evaluating statutory language, the Court 
applies "the plain language of a statute unless the terms are 
ambiguous."  Boynton v. Kilgore, 271 Va. 220, 227, 623 S.E.2d 
922, 926 (2006).  "When an enactment is clear and unequivocal, 
general rules for construction of statutes of doubtful meaning 
do not apply."  Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 
84, 87 (1985). 
We have held that "in the construction of statutes 
conferring the power of eminent domain, every reasonable doubt 
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is to be [resolved] adversely to th[at] right."  School Board v. 
Alexander, 126 Va. 407, 413, 101 S.E. 349, 351 (1919).  
"[U]nless both the spirit and letter of the statute clearly 
confer the power, it cannot be exercised."  Id.  Statutes 
authorizing the power of eminent domain must, therefore, "be 
strictly construed, and a locality must comply fully with the 
statutory requirements when attempting to exercise this right."  
3232 Page Ave. Condo. Unit Owners Ass'n v. City of Va. Beach, 
284 Va. 639, 645, 735 S.E.2d 672, 675 (2012). 
 
The plain meaning of Code § 1-219.1 makes it clear that 
redevelopment and housing authorities no longer have the 
authority to condemn individual properties within a 
redevelopment area determined to be a blighted area when the 
properties are not themselves blighted.  The central issue in 
this appeal, however, is whether the NRHA, in its acquisition of 
the Property, is bound by the enactment of Code § 1-219.1. 
3. 
Effective Date of Code § 1-219.1 
Code § 1-219.1 became effective on July 1, 2007.  It 
applied to all governmental entities, including the NRHA.  The 
"ability. . . to acquire" property as specified in Paragraph 3 
refers to the completion of an effective taking, and does not 
permit a redevelopment and housing authority acting pursuant to 
a valid redevelopment plan to acquire properties that are not 
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themselves blighted after July 1, 2010 merely by filing a 
petition for condemnation. 
We have held that "we have a duty, whenever possible, to 
interpret the several parts of a statute as a consistent and 
harmonious whole so as to effectuate the legislative goal.  
Generally, the Court will look to the whole body of [a statute] 
to determine the true intention of each part."  Ford Motor Co. 
v. Gordon, 281 Va. 543, 549, 708 S.E.2d 846, 850 (2011) (quoting 
Oraee v. Breeding, 270 Va. 488, 498, 621 S.E.2d 48, 52-53 
(2005)).  This includes "the entirety of a single legislative 
enactment as it appears in the Acts of Assembly as a whole."  
Eberhardt v. Fairfax Cnty. Employees’ Ret. Sys., 283 Va. 190, 
194, 721 S.E.2d 524, 536 (2012).  Accordingly, we must read the 
text of Chapter 882 as a whole to determine the intended meaning 
of the words "ability . . . to acquire" as used in Paragraph 3. 
 
We also assume "[w]hen interpreting and applying a statute, 
. . . that the General Assembly chose, with care, the words it 
used in enacting the statute, and we are bound by those words."  
Kiser v. A.W. Chesterton Co., 285 Va. 12, 19 n.2, 736 S.E.2d 
910, 915 n.2 (2013) (internal quotation marks omitted).  Because 
we assume that the General Assembly chose the statutory language 
with care, "when the General Assembly has used specific language 
in one instance, but omits that language or uses different 
language when addressing a similar subject elsewhere in the 
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Code, we must presume that the difference in the choice of 
language was intentional."  Newberry Station Homeowners Ass'n v. 
Board of Supervisors, 285 Va. 604, 616, 740 S.E.2d 548, 554 
(2013) (internal quotation marks omitted). 
 
We presume that the General Assembly's use of specific 
language in Paragraph 4 of Chapter 882 was intentional and 
consequential.  Paragraph 4 establishes an exception to the 
application of the provisions of Code § 1-219.1 specifically for 
the NRHA for one specific recreational project, which is not the 
project at issue here, so long as the petition for acquisition 
by eminent domain was "instituted prior to January 1, 2011."  
Thus, Paragraph 4 clearly sets a deadline for the filing of the 
petition for condemnation and demonstrates that when the General 
Assembly wanted to make an exception to the application of Code 
§ 1-219.1 based on the date a petition for condemnation was 
filed, it did so with clear and unambiguous language. 
In contrast, Paragraph 3 applies to all redevelopment and 
housing authorities operating pursuant to redevelopment plans 
adopted prior to January 1, 2007.  It does not refer to either 
the filing of a petition for condemnation or the institution of 
the acquisition of property, but instead places a limitation on 
the "ability of a redevelopment and housing authority . . . to 
acquire property."  This language is not comparable to the 
language contained in Paragraph 4 of Chapter 882 and cannot be 
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construed to provide an exception to the application of Code 
§ 1-219.1 based on the date the petition for condemnation was 
filed. 
 
Accordingly, we hold that the circuit court erred when it 
allowed the NRHA to acquire the Property subsequent to the 
statutory deadline.  The parties stipulated that the Property 
was not blighted.  Further, the NRHA did not acquire the 
Property by obtaining title by certificate of take or 
certificate of deposit, or an award pursuant to a petition for 
condemnation prior to the July 1, 2010 deadline established by 
Paragraph 3.  The NRHA therefore retained its ability to acquire 
the unblighted property only until July 1, 2010 when the 
limitations of Code § 1-219.1 became applicable.  On July 1, 
2010, the terms of Code § 1-219.1 governed the NRHA's attempted 
acquisition and barred its authority to condemn PKO's unblighted 
Property. 
4. 
Whether the NRHA Had a Substantive Right to Acquire PKO's 
Property under Title 36 of the Code 
 
The NRHA contends that even if the Court determines that 
Paragraph 3 of Chapter 882 does require it to have completed 
litigation prior to the July 1, 2010 deadline, the circuit court 
did not err.  The NRHA argues that Title 36 of the Code 
conferred the NRHA with a substantive right to acquire PKO's 
Property that cannot be impaired by the enactment of a later 
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statute.  According to the NRHA, the law in effect when its 
right to acquire the Property accrued governs the proceeding.*  
The NRHA contends that its right to obtain PKO's Property arose 
in 1998 with the adoption of the Redevelopment Project, and that 
the language of Code § 1-219.1 cannot limit that right.  We 
disagree. 
We have previously held that "there are no vested rights in 
a potential result in pending litigation."  Marriott v. Harris, 
235 Va. 199, 212, 368 S.E.2d 225, 231 (1988) (internal quotation 
marks omitted).  The NRHA filed a petition for condemnation in 
April 2010 but did not acquire title to the Property until after 
                     
* In making this argument, the NRHA relies, in part, on Code 
§ 1-9.  Code § 1-9 states, in relevant part: 
 
  Nothing in this Code shall operate to 
discontinue any cause or matter, civil or 
criminal, which shall be pending and 
undetermined in any court on the day before 
this Code, or any provision of this Code, 
takes effect. 
 
The NRHA contends that the terms of Code § 1-9 preclude Code 
§ 1-219.1 from having the effect of discontinuing the 
condemnation proceedings, as they constitute a civil case 
pending in court before Code § 1-219.1 took effect. 
Code § 1-9, however, protected pending "suits and 
proceedings" on grounds not recognized under the new Code from 
being discontinued with the General Assembly's enactment of the 
Code of 1950, and is explicitly inapplicable to acts enacted 
after the Code of 1950 took effect.  Commission on Code 
Recodification, Report to the Governor and General Assembly of 
Virginia [Concerning Proposed Code of Virginia] (Dec. 15, 1947), 
House Doc. No. 18 (1948), reprinted in Code of Virginia (1950) 
Vol. 1, at ix-xxiii.  Subsequent statutory enactments are 
addressed by Code § 1-239, discussed in Part II.A.4., supra. 
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July 1, 2010.  As a result, the NRHA's rights to the unblighted 
Property owned by PKO were only prospective at the time that 
Code § 1-219.1 became applicable to redevelopment and housing 
authorities.  As in Marriott, the General Assembly only affected 
the potential result of the NRHA's petition for condemnation by 
enacting Code § 1-219.1.  The application of Code § 1-219.1 to 
the NRHA therefore could not constitute a denial of vested 
rights. 
The NRHA also contends that Code § 1-239 prohibits the 
retroactive application of new statutes to impair substantive 
rights that accrued before the new statute came into effect.  
Consequently, the NRHA contends that its rights to the Property 
by eminent domain could not be impaired by Code § 1-219.1 
because they accrued prior to the effective date of Code § 1-
219.1.  We disagree. 
Code § 1-239 states, in relevant part: 
  No new act of the General Assembly shall 
be construed . . . to affect . . .  any 
right accrued, or claim arising before the 
new act of the General Assembly takes 
effect; except that the proceedings 
thereafter held shall conform, so far as 
practicable, to the laws in force at the 
time of such proceedings. 
 
As aforementioned, the NRHA did not hold any rights to the 
Property when Code § 1-219.1 became applicable to terminate a 
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redevelopment and housing authority's power to acquire property 
that is not itself blighted. 
 
Code § 1-219.1 did not affect a "claim arising" before it 
took effect.  As discussed in Part II.A.2., supra, the Court 
"appl[ies] the plain language of a statute unless the terms are 
ambiguous."  Boynton, 271 Va. at 227, 623 S.E.2d at 926.  The 
terms of Code § 1-239 are not ambiguous.  Code § 1-219.1 became 
effective, in its entirety, on July 1, 2007.  When the NRHA 
filed its petition to condemn the Property in April 2010, its 
ability to acquire the Property was unencumbered.  The NRHA 
simply failed to acquire the Property, an unblighted individual 
property, before July 1, 2010, when blight became a requirement 
for acquisition of property within the Redevelopment Project 
area. 
 
Paragraph 3 of Chapter 882 indicates that, "until July 1, 
2010, the provisions of this act shall not affect the ability of 
a redevelopment and housing authority organized pursuant to 
Title 36 of the Code of Virginia to acquire property pursuant to 
any redevelopment or conservation plan adopted prior to January 
1, 2007."  (Emphasis added.)  While the terms of Code § 1-219.1 
limit the NRHA's ability to acquire unblighted property within a 
blighted area after July 1, 2010, any claims arising after the 
effective date of Code § 1-219.1 on July 1, 2007 did not arise 
16 
"before the new act of the General Assembly," i.e., Code § 1-
219.1, took effect.  Code § 1-239. 
 
The NRHA's claim arose in April 2010, when it filed its 
petition for condemnation.  Because the petition was filed after 
July 1, 2007, the claim arose after Code § 1-219.1 was enacted 
and was not affected by Code § 1-219.1 in violation of Code § 1-
239. 
B.   Other Issues 
 
PKO also contends that the circuit court erred when it (1) 
ruled that the subject Property was in a blighted area, (2) 
struck PKO's due process objection, and (3) applied the doctrine 
of stare decisis to hold that the NRHA was permitted to make a 
finding of blight.  In light of our decision that the circuit 
court erred by permitting the NRHA to acquire the Property under 
the authority of Code § 36-49 after the July 1, 2010 deadline, 
we will not discuss these remaining assignments of error. 
III.  Conclusion 
For the reasons stated, we hold that the circuit court 
erred in permitting the NRHA to acquire PKO's Property after the 
effective date of the July 1, 2010 statutory limitation 
prescribed by Code § 1-219.1.  We will reverse the judgment of 
the circuit court and enter final judgment in favor of PKO. 
Reversed and final judgment.