Title: Richmeade, L.P. v. City of Richmond

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  ALL THE JUSTICES 
 
RICHMEADE, L.P. 
 
v.  Record No. 031513     OPINION BY JUSTICE ELIZABETH B. LACY 
 
 
 
April 23, 2004 
CITY OF RICHMOND 
 
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 
Randall G. Johnson, Judge 
 
 
In this appeal we consider whether this action for inverse 
condemnation is subject to the three-year statute of 
limitations for an implied contract, Code § 8.01-246, or the 
five-year limitations period for injury to property, Code 
§ 8.01-243. 
Richmeade, L.P., owns approximately 25 acres of land in 
the City of Richmond, known as the Windsor Apartment Complex. 1  
On February 17, 1997, Richmeade acquired an option to purchase 
real property located next to the Windsor Apartment Complex.  
In order to develop the two parcels as a single apartment 
development, Richmeade requested that the City vacate certain 
streets within the proposed development.  By ordinance adopted 
February 22, 1999, the City vacated the streets pursuant to 
Code §§ 15.2-2006 and 15.2-2007.1.  In April 1999, the City 
                     
1 The trial court decided the case without an evidentiary 
hearing on the City of Richmond's special plea to the statute 
of limitations.  For purposes of this appeal, we recite the 
facts as alleged in the motion for declaratory judgment.  While 
the City filed a demurrer asserting that the property was never 
taken or damaged, the facts relevant to this appeal are not in 
dispute. 
reconsidered its February 22, 1999 action and denied the 
request for vacating the streets. 
On September 10, 2002, Richmeade filed an inverse 
condemnation action pursuant to the declaratory judgment 
statute, Code § 8.01-184 et seq., seeking a declaration that 
the City's actions constituted a "taking and/or damaging" of 
its property and property rights and a trial by jury "on the 
issue of taking and damaging of property rights and of just 
compensation."  The City filed a plea of the statute of 
limitations asserting that Richmeade's action was time-barred 
because it was not filed within the three-year limitations 
period established for implied contracts by Code § 8.01-246.  
Richmeade argued that its action was an action for "damage to 
property" and therefore was subject to the five-year 
limitations period in Code § 8.01-243.  Following briefing and 
argument of counsel, the trial court, relying on Prendergast v. 
Northern Virginia Regional Park Authority, 227 Va. 190, 313 
S.E.2d 399 (1984), concluded that an action for inverse 
condemnation was subject to the three-year statute of 
limitations and entered an order dismissing Richmeade's motion 
for judgment. 
DISCUSSION 
Article I, Section 11 of the Constitution of Virginia 
confers on a property owner a right to just compensation from 
 
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the government when the government takes or damages the owner's 
property for public use.  Va. Const. art. I, § 11; State Hwy. & 
Transp. Comm'r v. Linsly, 223 Va. 437, 443, 490, 290 S.E.2d 
834, 838 (1982); C. & O. Ry. Co. v. Ricks, 146 Va. 10, 18, 135 
S.E. 685, 688 (1926).  As early as 1919, this Court held that a 
landowner could enforce this right under a tort or contract 
theory of recovery; however, because the sovereign was not 
liable for injuries based on negligence, a landowner could 
waive recovery under the tort theory and sue on the contract 
between the landowner and the government that Article I, 
Section 11 implies.  Nelson County v. Loving, 126 Va. 283, 299-
300, 101 S.E. 406, 411 (1919).  Since 1919, this Court has 
consistently held that when the government failed to condemn 
private land taken for public purposes, the landowner's 
recourse was to file an action for inverse condemnation based 
on the implied contract between the government and the 
landowner.  The terms of that implied contract require the 
government to pay the landowner "such amount as would have been 
awarded therefor, if the property had been condemned under the 
eminent domain statutes."  Nelson County v. Coleman, 126 Va. 
275, 279, 101 S.E. 413, 414 (1919); Burns v. Bd. of 
Supervisors, 218 Va. 625, 627, 238 S.E.2d 823, 825 (1977). 
In Prendergast, the case relied upon by the trial court, 
water from restoration work conducted by the Park Authority 
 
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leaked into the lower level of a building on an adjacent lot.  
The owner of the building filed a five-count motion for 
judgment against the Authority.  In Count 5 of the motion for 
judgment, the building owner initially alleged that the 
government took or damaged his property "without due process of 
law and without payment of just compensation."  Prendergast, 
227 Va. at 192, 313 S.E.2d at 400.  In repleading that Count, 
the building owner realleged a taking of property without due 
process and just compensation and asked that the trial court 
direct the Authority to file condemnation proceedings for the 
purpose of ascertaining the amount of just compensation due for 
the damaged building.  Id. at 192-93; 313 S.E.2d at 400.  
The building owner argued that Count 5 was subject to the 
five-year limitations period of Code § 8.01-243(B)(injury to 
property), while the Authority asserted that the three-year 
limitations period for implied contracts under Code § 8.01-
246(4) applied.  In concluding that the three-year period 
applied, this Court held that Count 5 "sounded in inverse 
condemnation," that inverse condemnation is based on an implied 
contract, and that "[o]nce the trial court correctly concluded 
that the essence of Count 5 was an action based on an implied 
contract it follows that application of the period of 
limitations contained in Code § 8.01-246(4) was proper."  
 
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Prendergast, 227 Va. at 195, 313 S.E.2d at 402 (citing Burns, 
218 Va. at 627, 238 S.E.2d at 825). 
The facts of this case are indistinguishable from those in 
Prendergast.  Here there is no dispute that Richmeade's action 
is an "action for inverse condemnation" seeking an "award of 
damages for the condemnation of Plaintiffs' property and/or 
property rights."  As we explained in Burns, an inverse 
condemnation action is based on an implied contract that the 
government will justly compensate landowners for land it has 
taken.  218 Va. at 627, 238 S.E.2d at 825.  Therefore, the 
cause of action is subject to the three-year limitations period 
of Code § 8.01-246(4).  Prendergast, 227 Va. at 195, 313 S.E.2d 
at 404. 
Richmeade asserts, however, that the decision in 
Prendergast is incompatible with the principle that the object 
of the litigation and not its form determines the applicability 
of a statute of limitations.2  Friedman v. Peoples Serv. Drug 
Stores, 208 Va. 700, 703, 160 S.E.2d 563, 565 (1968); 
Birmingham v. Chesapeake & Ohio Ry. Co., 98 Va. 548, 551, 37 
                     
2 Richmeade also cites Hampton Roads Sanitation District v. 
McDonnell, 234 Va. 235, 360 S.E.2d 841 (1987), in support of 
its position because the five-year limitations period was 
applied to an inverse condemnation count in that case.  Both 
Richmeade and the City acknowledge, however, that unlike 
Prendergast, the proper limitations period was not at issue in 
McDonnell, and for that reason McDonnell does not control or 
affect the result in this case. 
 
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S.E. 17, 17 (1900).  According to Richmeade, if this principle 
is applied to an inverse condemnation case, the correct statute 
of limitations is the five-year limitations period of Code 
§ 8.01-243(B) because the object of every inverse condemnation 
action is to recover for injury to property.  We disagree. 
The object of an inverse condemnation action, according to 
Richmeade, is to recover compensation for damage to private 
property.  But an inverse condemnation action is a specific 
type of proceeding based on a constitutionally created right 
connected to the "taking" or "damaging" of property by the 
government.  To take or damage property in the constitutional 
sense does not require that the sovereign actually invade or 
disturb the property.  Taking or damaging property in the 
constitutional sense means that the governmental action 
adversely affects the landowner's ability to exercise a right 
connected to the property.  Prince William County v. Omni 
Homes, 253 Va. 59, 72, 481 S.E.2d 460, 467 (1997); City of 
Lynchburg v. Peters, 156 Va. 40, 48-49, 157 S.E. 769, 772 
(1931); Lambert v. City of Norfolk, 108 Va. 259, 265, 61 S.E. 
776, 778 (1908).  Thus, an action for inverse condemnation is 
an action seeking redress for the government's action in 
limiting property rights the landowner holds.  In that regard, 
the act giving rise to the breach of implied contract is not an 
act aimed at the property, but rather an act that limits the 
 
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landowner's ability to exercise his property rights without 
paying the landowner for that limitation.  The mere fact that 
the measurement of that compensation may be based on a decline 
in the value of the subject property does not make the action 
one for injury to property. 
This conclusion is consistent with the result we reached 
in Pigott v. Moran, 231 Va. 76, 341 S.E.2d 179 (1986), where 
the issue was whether an action for constructive fraud was an 
action for "injury to property" subject to the five-year 
limitations period of Code § 8.01-243(B) or a "personal action" 
subject to the shorter limitations period then provided for by 
Code § 8.01-248.  In that case, purchasers of a house sued 
their real estate agent for fraud, maintaining that the agent 
misrepresented to them that the property abutting the property 
they eventually purchased was zoned for residential purposes 
when in fact the property was zoned for commercial and 
industrial purposes.  The purchasers identified their damage 
claim as a financial loss based on the difference between the 
value of the land if it abutted residential property and the 
actual value of the land abutting commercial and industrial 
property.  Id. at 78-79, 341 S.E.2d at 180-81.  The purchasers 
argued that even though they had filed an action for 
constructive fraud, the five-year limitations period of Code 
§ 8.01-243(B) applied because the action was an "action for 
 
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injury to property."  We rejected the purchaser's position, 
finding that the "gist" of the purchasers' claim was that the 
wrongful act was aimed at the purchasers "personally and not 
their property" even though the damages claimed involved a 
decrease − or injury − to the property's value.  Id. at 81, 341 
S.E.2d at 182. 
The gist of Richmeade's claim in this case is that the 
wrongful act of the government was aimed at Richmeade and not 
at the property.  The government's wrongful act in this case 
was the failure of the City of Richmond to pay Richmeade for 
the limitations the City placed on Richmeade's ability to 
exercise its rights over its property.  Thus, as in Pigott, the 
object of this action is not injury to property.  It is the 
injury suffered by Richmeade because the City breached its 
implied contract to pay just compensation. 3
Accordingly, we conclude that the trial court did not err 
in applying the three-year limitations period of Code § 8.01-
246(4) to this inverse compensation action and we will affirm 
the judgment of the trial court. 
Affirmed.
JUSTICE KOONTZ and JUSTICE LEMONS dissent. 
                     
3 We also note that this result is consistent with the 
Revisers' Note to the 1977 revision of Title 8.01 explaining 
that the five-year limitations period for injury to property 
does not apply to actions resulting from a breach of contract.  
See Revisers' Note, Code § 8.01-243. 
 
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