Title: RF&P Railroad v. Metro. Wash. Airports Auth.

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  All the Justices 
 
 
RICHMOND, FREDERICKSBURG  
& POTOMAC RAILROAD  
COMPANY, ET AL. 
 
OPINION BY JUSTICE A. CHRISTIAN COMPTON 
v.  Record No. 950799                   March 1, 1996 
 
METROPOLITAN WASHINGTON 
AIRPORTS AUTHORITY 
 
 
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY 
 
Paul F. Sheridan, Judge 
 
 
In this inverse condemnation case, a landowner seeks a 
determination in a declaratory judgment proceeding under Code 
§ 8.01-187 that its private property has been taken or damaged 
for public use without just compensation, within the meaning of 
Article I, Section 11 of the Constitution of Virginia. 
 
Appellants Richmond, Fredericksburg & Potomac Railroad 
Company and RF&P Properties, Inc. (collectively RF&P), instituted 
this action as of July 1, 1992 against appellee Metropolitan 
Washington Airports Authority.  The Authority, an interstate 
compact entity with the District of Columbia, was created in 1985 
to acquire Washington National Airport and Washington Dulles 
International Airport from the federal government and to operate 
the respective facilities.  Acts 1985, ch. 598.  The Authority 
has the power of eminent domain.  Id. § 9. 
 
The subject property is a tract of approximately 41 acres 
owned by RF&P in Arlington County.  The land lies north of 
Crystal City and lies adjacent on the north northwest to National 
Airport.  About 17 acres of the property lie in the "clear zone" 
of the Airport's Runway 15/33. 
 
 
 
 
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A clear zone, also called a "runway protection zone," is an 
area at ground level in which the Federal Aviation Administration 
(FAA) prohibits any development that would attract a 
"congregation of people."  The type of development prohibited in 
airport clear zones includes office buildings and shopping 
centers.  The clear zone for this runway was designated by the 
FAA as an area at ground level in the shape of a trapezoid, 
beginning 200 feet from the end of the runway with a base width 
of 1,000 feet, extending out for 1,700 feet to an outer width of 
1,425 feet. 
 
In an amended motion for judgment, RF&P alleged that the 
Authority, in order to qualify for grant funds under certain 
federal statutes, was required to give assurances to the FAA that 
it would obtain either a fee interest "or a strict land use and 
avigation easement" over National Airport's clear zone.  The RF&P 
alleged that because National Airport was federally owned and 
operated until 1987, when the Authority began the Airport's 
operation, it had no occasion before that time to participate in 
the various federal grant programs, and thus was not bound to 
"enforce" the FAA's clear zone policy.  The RF&P alleged that 
after the Authority assumed operating control over the Airport, 
the Authority became obligated to "implement" the FAA's clear 
zone policy in order to be eligible for federal funding. 
 
The RF&P further alleged that the subject property is zoned 
by the County for industrial development, designated M-1 and M-2. 
 
 
 
 
- 3 -  
 It asserted that the property's highest and best use is for 
operation of commercial office buildings, noting that Crystal 
City office space has a low vacancy rate because of its proximity 
to the Pentagon and downtown Washington, D.C. 
 
The RF&P further alleged that it entered into a joint 
venture agreement in 1986 with the Charles E. Smith Companies to 
develop an office complex on the subject property.  (References 
in this opinion to "RF&P" in connection with efforts to develop 
the property will include the Smith Companies.)  In the 
beginning, ten office buildings were planned, as well as 
construction of above and below ground parking, sidewalks, 
driveways, and street lighting. 
 
The RF&P further alleged that, beginning in October 1986, it 
commenced filing the appropriate documents with the FAA seeking a 
"no hazard determination," that is, a ruling that its building 
proposal did not constitute a hazard to air navigation.  
According to the allegations, the FAA conducted studies and found 
that a majority of the proposed buildings exceeded FAA height 
limitations.  But the FAA said that even if the building heights 
were lowered, it would still object to the proposed development 
because it would introduce a congregation of people into the 
clear zone. 
 
The RF&P also asserted that it submitted revised proposals 
to the FAA in July 1987, January 1988, and August 1988.  In the 
final proposal, no occupied buildings were in the clear zone, 
 
 
 
 
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only a local access road, surface and underground parking, trees, 
and lights.  Finally, RF&P asserted, the FAA issued a "no hazard 
determination" in September 1988 to expire in March 1990. 
 
The RF&P also alleged that at the time it "was being 
pressured by the FAA to cancel its plans for development in the 
Clear Zone," another landowner began formulating its own plans 
for development in the immediate area.  Vector-Schafran, a 
partnership, owned a one-acre parcel adjacent to the subject 
property; almost all of the one acre is within the clear zone.  
In September 1988, according to the allegations, after Vector-
Schafran submitted revised plans, the FAA issued a no hazard 
determination but said it discouraged development because a 
congregation of people would be introduced into the clear zone. 
 
The RF&P further alleged that in mid-1988 the Authority "had 
resisted the FAA's pressure to force it to obtain property 
interests sufficient to control the Clear Zone."  But, RF&P 
asserted, this resistance "began to erode in late 1988."  The 
RF&P asserted the Authority then began to implement a plan for 
"massive redevelopment" of National Airport.  Under the federal 
funding statutes, according to the allegations, the Authority was 
eligible to receive 75 per cent of the costs for certain aspects 
of the redevelopment from the FAA.  Thus, RF&P alleged, the 
proposed developments by it and Vector-Schafran caused the FAA 
"to exert increasing pressure" on the Authority to acquire either 
fee interests or land and avigation easements in the clear zone. 
 
 
 
 
- 5 -  
  
As a result, RF&P asserted, a conditional letter of intent 
was executed on September 30, 1989 between RF&P and the 
Authority.  In the letter, according to the allegations, RF&P 
"promised to convey a strict use easement" to the Authority upon 
commencement of the development.  The proposed easement, RF&P 
asserted, did not permit development in the clear zone, except 
for roadways, parking, street lighting and "infrastructure 
support."  The letter provided that it would terminate if the 
RF&P determined not to proceed with the development. 
 
Subsequently, RF&P alleged, the Authority applied for 
federal grant funds, giving "assurances" in grant agreements in 
1990, 1991, and 1992 that it would obtain land use and avigation 
easements over the clear zone portion of RF&P's property. 
 
The RF&P further alleged that, after the FAA approved its 
revised plan in September 1988, RF&P attempted to make the 
development plan "economically viable."  It alleged that because 
of the Authority's "obligation to prevent viable development in 
the Clear Zone," RF&P was not able to "implement" its plan.  The 
September 1989 letter of intent "lapsed," RF&P alleged, when it 
determined that the development could not proceed and, at that 
time, "a date no later than November 1991," RF&P was returned to 
its "status immediately prior to the execution of the letter of 
intent." 
 
Further, RF&P alleged, the Authority, through delay of 
initiation of condemnation proceedings, attempted to "drive down" 
 
 
 
 
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the value of the Vector-Schafran property.  In 1992, RF&P 
asserted, the Authority condemned the property and took fee title 
to it. 
 
Articulating its inverse condemnation claim in the amended 
motion for judgment, RF&P alleged that when the conditional 
letter of intent lapsed, the Authority "was obligated by 
applicable law either to negotiate just compensation with [the 
RF&P] or to determine just compensation through formal 
condemnation proceedings."  Continuing, RF&P asserted that the 
Authority "has not negotiated such just compensation, has not 
initiated such condemnation proceedings, and has not returned its 
[federal] funding to the FAA." 
 
The inverse condemnation action included a so-called 
"overflights" claim in addition to the claim that the Authority 
was "using" the subject property as a clear zone at ground level. 
 The RF&P alleged the Authority has taken RF&P's "airspace for 
its own use," asserting that "the frequency of flights" over 
RF&P's property "increased from 1989 to 1990" and that this use 
"has caused noise, vibrations, fumes, dust and fuel particulates 
emissions on the Property." 
 
The RF&P alleged that the Authority's "actions" regarding 
the overflights and the use of the clear zone have resulted in a 
taking of the property in the clear zone.  It also asserted that 
the taking occurred on or about October 20, 1989, or in the 
alternative, at such time as the Authority executed its first 
 
 
 
 
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grant agreement for federal funds for National Airport.  Thus, 
RF&P sought a declaration that a taking had occurred on the date 
alleged, sought the appointment of commissioners to determine the 
compensation to which it is entitled, and sought an award of 
costs and attorney's fees. 
 
Subsequently, the trial court overruled demurrers filed by 
the Authority to the amended motion for judgment.  In a February 
1994 order memorializing that ruling, the court concluded that 
RF&P had made allegations sufficient to state "a takings and/or 
damage claim based on overflights of aircraft," and a "separate 
inverse condemnation claim based on [the Authority's] alleged 
actions with respect to the purported imposition of the `clear 
zone' allegedly causing damages and/or a taking" of the RF&P's 
property. 
 
Later, the Authority filed a motion for partial summary 
judgment directed to the overflights claim.  The Authority argued 
that the claim was barred by the three-year statute of 
limitations applicable to inverse condemnation actions.  See 
Prendergast v. Northern Virginia Regional Park Auth., 227 Va. 
190, 194-95, 313 S.E.2d 399, 402 (1984).  The Authority asserted 
that RF&P, limited by the trial court to evidence of overflights 
already developed during discovery, was unable to establish that 
flights over the subject property had increased in frequency or 
changed in character during the three-year period prior to the 
date the action was instituted, that is, between July 1, 1989 and 
 
 
 
 
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July 1, 1992. 
 
Following argument in November 1994, the trial court granted 
the motion.  The court ruled that, "as a severable cause of 
action, the overflight issue is barred by the statute of 
limitations."  The trial court indicated at the time of this 
ruling, however, that overflights evidence would probably be 
admissible on the "other alleged takings" claim. 
 
Subsequently, following a six-day bench trial in which the 
testimony of 18 witnesses was presented and more than 100 
exhibits were considered, the trial judge asked the parties to 
submit proposed findings of fact and conclusions of law.  After 
conducting a thorough review of the parties' proposals, the judge 
revised, deleted, and adopted language to articulate precisely 
the facts that he found from all the evidence adduced at trial. 
 
The trial judge, in a 57-page document, ruled in favor of 
the Authority.  He made 87 findings of fact, adopted 71 
conclusions of law (many of which also contain factual findings), 
and set forth a summary of his reasoning underlying the findings 
and conclusions.  The court held that the Authority did nothing 
to take or damage RF&P's property.  In an alternative holding, 
the court held that even if a taking or damage had been 
established, the clear-zone claim was time-barred.  The trial 
court incorporated the document in a January 1995 order entering 
judgment for the Authority.  The RF&P appeals. 
 
Although some of the evidence was conflicting, RF&P 
 
 
 
 
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understandably does not challenge on appeal any of the trial 
court's detailed findings of fact.  Indeed, on brief RF&P says, 
"None of the central facts in this case [is] in dispute."  
Therefore, applying settled appellate principles, we shall recite 
the evidence, and all reasonable inferences flowing from the 
evidence, in a light most favorable to the Authority which 
prevailed in the trial court.  Additionally, we shall recite the 
voluminous evidence in summary fashion and in no more detail than 
is necessary to illuminate the questions of law presented. 
 
In June 1986, when the RF&P and the Smith Companies agreed 
to explore development of the subject property, they knew about a 
planned consolidation of Navy Department offices in the area.  
The hope was that a development on the property could be offered 
in response to an expected Navy Solicitation for Offers (SFO). 
 
During the period after the Authority was created and before 
the RF&P finally obtained a no hazard determination from the FAA, 
there was an ongoing debate between the Authority and the FAA 
whether the Authority was legally required, based on federal 
regulations, to acquire appropriate property interests in the 
Runway 15/33 clear zone as a condition for receipt of federal 
funding.  William A. Whittle, manager of the FAA's Washington 
Airports District Office, was of opinion that the Authority was 
required to acquire such interests.  The Authority's general 
manager took the position there was no such requirement.   
 
After RF&P's July 1987 revised submission, when it had been 
 
 
 
 
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advised of the dimensions and location of the clear zone, RF&P 
volunteered to the FAA that it would grant an avigation easement 
to the Authority over a portion of the clear zone.  An officer of 
the Smith Companies testified, "we felt that this was a political 
move for us to be making.  That we could resolve the issues here 
by our willingness to give control to the Airports Authority." 
 
Just prior to RF&P's third submission to the FAA, 
representatives of RF&P met with representatives of the Authority 
in November 1987 seeking formal support for the proposed 
development.  The RF&P offered to grant the Authority an 
avigation easement over the clear zone in exchange for support, 
and the Authority agreed.  When RF&P submitted its revised plan 
in January 1988, it formally proffered to the FAA its intent to 
grant an easement to the Authority over the entire clear zone.  
At the time, RF&P's counsel contended that the Authority was not 
legally obligated to acquire the clear zone as a condition for 
receipt of federal funding. 
 
In February 1988, the FAA, in a "Current Issues Report," 
stated its intent to "pressure" the Authority to acquire 
interests in the clear zone.  In a similar report issued two 
months later, the FAA reported that the Authority had not acceded 
to FAA pressure to acquire such interests. 
 
In August 1988, the FAA sent RF&P a qualified no hazard 
letter stating that its most recent submission did not violate 
FAA height restrictions; it expressed opposition to the proposed 
 
 
 
 
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construction, however, because two buildings were still planned 
for the clear zone.  In the letter, the FAA admitted, however, 
that it had no legal basis to prohibit the development because 
the Authority "does not have control of the area in question." 
 
After receiving this qualified no hazard determination, RF&P 
decided it could not move forward with the development.  
Specifically, RF&P feared it would not be able to obtain zoning 
approval or a building permit from the County because of the 
FAA's reservations expressed in the August letter; it would not 
be able to obtain financing and insurance due to the FAA's 
reservations about proposed construction in the clear zone; and 
it might receive adverse publicity and suffer substantial harm to 
its reputation were it to ignore the FAA's admonition. 
 
Later in August 1988, RF&P submitted another revised 
proposal.  It called for construction of six buildings, all 
outside the clear zone.  The revision included the same proffer 
to grant the avigation easement contained in the prior 
submission.  Subsequently, the FAA issued an unqualified no 
hazard letter to RF&P approving the last submission.   
 
On September 1, 1988, Vector-Schafran submitted to the FAA a 
notice of proposed construction for an office building on its 
one-acre parcel.  In November 1988, the FAA notified Vector-
Schafran that its proposed building violated its clear zone 
policy. 
 
During April and May 1989, the Authority supported the 
 
 
 
 
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RF&P's efforts to move forward with its development.  Among other 
things, the Authority resisted the effort of the "National 
Capital Planning Commission" to adopt its own clear zone policy 
to include property beyond 1,900 feet from the end of Runway 
15/33. 
 
Following negotiations during July, August, and September 
1989, the parties executed the conditional Letter of Intent to 
Grant Easement on September 30, 1989.  The Authority agreed to  
acquire for $2,000 the avigation easement conditionally offered 
by the RF&P.  The letter of intent was revocable at the will of 
RF&P and was expressly conditioned on RF&P's ability to obtain 
all necessary government approvals for development.  Later, RF&P 
"terminated" the letter. 
 
In October 1989, the Defense Department, Navy Department, 
and General Services Administration issued an SFO seeking three 
million square feet of office space to house consolidated Navy 
command offices in a single development.  The RF&P recognized 
that the foregoing entities would not consider the subject 
property because so much of it was inside the clear zone, fixed 
by the Navy at 3,000 feet in length. 
 
When RF&P recognized that the government was not interested 
in the subject property, it became concerned the Navy might leave 
existing office space that it was occupying in Crystal City and 
consolidate elsewhere, causing many other Crystal City tenants to 
leave as well.  According to an officer of the Smith Companies, 
 
 
 
 
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"a great deal of vacated office space in the Crystal City area 
. . . would have meant that any venture into a new development 
would have been foolhardy."  Therefore, RF&P abandoned its plans 
to proceed with the development of a speculative office complex 
on the subject property. 
 
In March 1991, Hydrosystems, Inc., completed a report of 
investigation requested by RF&P relating to contamination of 
about six acres of the subject property (four of which are in the 
clear zone).  The investigation, conducted in cooperation with 
the Virginia Department of Waste Management, revealed severe 
contamination in the soil and groundwater. 
 
In April 1991, the Authority filed its petition to condemn 
the Vector-Schafran property which culminated in a purchase 
agreement to transfer the property to the Authority in December 
1992. 
 
In October 1991, RF&P granted CSX Transportation, Inc., a 
permanent easement for use of a railroad corridor.  Of the 17 
acres in the clear zone, five are within the corridor.  The 
easement prohibits RF&P from building in the corridor. 
 
The RF&P continues to earn substantial profits from 
commercial leases on the subject property.  Over $600,000 annual 
net rental income was earned during the year before and during 
the year following the alleged taking.  Also, the evidence shows 
that the clear zone property retains significant market value for 
uses that do not conflict with the FAA clear zone policy.  If 
 
 
 
 
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only used for parking, the property is worth $400,000 to $450,000 
per acre. 
 
There are other factors which affect the economic viability 
of development of the subject property.  For example, the 
railroad corridor is further encumbered by a 1938 Indenture in 
favor of the United States which provides, in part, that 
ownership of the corridor will revert to the United States in the 
event the corridor is used for any purpose other than railroad 
operations.  Also, approximately 5.5 acres of the subject 
property is leased to the Solite Corporation, which operates a 
concrete batching plant on the land.  The lease does not expire 
until April 2000.  The majority of the 5.5 acres is in the clear 
zone.  Additionally, because of a high water table on the subject 
property, a large amount of subsurface parking would be so 
expensive to provide as to question the economic return on office 
development.  Also, development of the four acres of contaminated 
land would be "impossible" without appropriate remediation 
efforts costing millions of dollars. 
 
Finally, the trial court stated that it did not find the 
subject property had "a negative development potential," but that 
it had some value for purposes of liability in an inverse 
condemnation action. 
 
In its conclusions of law, the trial court ruled that the 
Authority did "nothing" to take or damage RF&P's property.  Also, 
the court ruled that the Authority was not legally obligated "to 
 
 
 
 
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do anything" with respect to the property, because FAA policy 
does not require the Authority to acquire control over property 
within the Runway 15/33 clear zone. 
 
Additionally, the court decided that RF&P has suffered no 
compensable interference with its property rights.  The court 
noted that RF&P's claim is primarily based on the allegation that 
the FAA clear zone policy has frustrated its plans to place an 
office development on the property, but it "does not -- and 
cannot -- claim that the FAA clear zone interferes with the 
present uses of the property." 
 
Finally, the trial court determined that even if the RF&P 
had established a taking, its claim against the Authority would 
be time-barred. 
 
On appeal, the RF&P assigns the following errors:  the trial 
court erred in holding that the Authority did nothing to take or 
damage RF&P's property within the meaning of Article I, Section 
11 of the Constitution; the trial court erred in holding that, 
even if it had established a taking or damage, the clear-zone 
claim was time-barred; and the trial court erred in holding that 
the separate "overflights" claim was time-barred.  Because of the 
view we take of the merits of RF&P's inverse condemnation claim, 
we do not reach the statute of limitations questions. 
 
When a case is decided by a trial court without the 
intervention of a jury, the court's judgment will not be set 
aside "unless it appears from the evidence that such judgment is 
 
 
 
 
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plainly wrong or without evidence to support it."  Code § 8.01-
680.  The trial court's ruling on the merits is fully supported 
by the evidence. 
 
Article I, Section 11 of the Constitution of Virginia 
provides that the General Assembly shall not pass any law 
"whereby private property shall be taken or damaged for public 
uses, without just compensation."  This section is self-executing 
and permits the landowner to enforce its constitutional right to 
compensation in a common law action based upon implied contract, 
Burns v. Board of Supervisors of Fairfax County, 218 Va. 625, 
627, 238 S.E.2d 823, 825 (1977), both where the property is taken 
for public use and where it is damaged for public use.  Jenkins 
v. County of Shenandoah, 246 Va. 467, 470, 436 S.E.2d 607, 609 
(1993). 
 
In the present case, we hold RF&P failed to establish that 
any taking or damage by the Authority occurred, either any taking 
or damage of the land within the clear zone or any taking or 
damage of the airspace above the clear zone. 
 
The gist of the RF&P's claim is that actions of the 
Authority prevented it from developing the subject property.  
Upon the clear zone aspect of the claim, RF&P asserts the 
Authority had committed to acquire the property as a requirement 
for federal funding.  The trial court properly concluded, 
however, that no such requirement existed.  The court found that 
the opinion to the contrary of the FAA's Whittle was unsupported 
 
 
 
 
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by other FAA testimony.  Indeed, the Authority constantly 
resisted pressure from the FAA to acquire the clear zone 
property, finally accepting RF&P's offer to sell for $2,000 an 
easement over the clear zone.  Furthermore, the September 1989 
conditional letter of intent, which would have allowed use of the 
clear zone to support RF&P's non-clear zone land, was purely 
voluntary on RF&P's part.  Significantly, the trial court found 
that the Authority's acts taken subsequent to execution of the 
letter of intent, including acquisition of Vector-Schafran's 
parcel, did not constitute a commitment to acquire RF&P's land. 
 
Furthermore, the record is clear that the Authority did not 
take RF&P's land by "using" it, either for overflights or as a 
runway protection zone.  Relating to the overflights, the record 
merely shows that, since at least 1984, approximately 23,000 
aircraft annually have flown over the property using Runway 
15/33.  During a pretrial hearing, RF&P's attorney stated to the 
trial court that RF&P had no additional evidence to support its 
overflights claim.  Subsequently, RF&P never offered, or 
attempted to offer, any evidence about, for example, the types of 
aircraft using the runway, the height at which they passed over 
the property, or the frequency of landings, to support its 
allegations in the amended motion for judgment that overflights 
caused "noise, vibrations, fumes, dust and fuel particulates 
emissions on the Property."  "Flights over private land are not a 
taking, unless they are so low and so frequent as to be a direct 
 
 
 
 
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and immediate interference with the enjoyment and use of the 
land."  United States v. Causby, 328 U.S. 256, 266 (1946).  
Manifestly, there has been no showing that an invasion of the 
RF&P's airspace rights occurred.  And, the clear zone 
requirements of the Navy and the National Capital Planning 
Commission, relied on by RF&P, do not dictate a different 
conclusion. 
 
Relating to the alleged "use" of the clear zone, the crux of 
RF&P's claim is found in paragraph 83 of the amended motion for 
judgment.  It alleged that the Authority had inversely condemned 
17 acres of its land when the Authority "represented and 
warranted to the FAA . . . that it had control over [RF&P's] 
Property," or alternatively, when the Authority executed grant 
agreements for federal funds.  As a result, the allegation 
continued, the Authority "became bound by applicable law either 
to condemn the portion of [RF&P's] Property located in the Clear 
Zone, or obtain strict land use and avigation easements for that 
portion of the Property." 
 
Actually, this is a contention that the Authority "used" the 
clear zone because it allegedly prevented RF&P from developing 
office buildings on the property.  The record fully supports the 
trial court's holding that the Authority took no action to 
prevent the development nor did it threaten RF&P with 
condemnation.  On the contrary, the record shows that the 
Authority actively assisted the RF&P's development efforts.  The 
 
 
 
 
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record is clear that RF&P abandoned its plans for the commercial 
development due to adverse market conditions and physical 
problems with the property, not because of any interference by 
the Authority. 
 
Finally, we have not overlooked the fact that, because of 
its statute of limitations ruling on the overflights claim, the 
trial court did not explicitly address the merits of that claim 
after hearing all the evidence.  Even if we were to agree with 
RF&P that the trial court erred in ruling the claim was time-
barred, reversal of the judgment is not required.  "We do not 
hesitate, in a proper case, where the correct conclusion has been 
reached but the wrong reason given, to sustain the result and 
assign the right ground."  Robbins v. Grimes, 211 Va. 97, 100, 
175 S.E.2d 246, 248 (1970).  Accord Doswell Ltd. Partnership v. 
Virginia Elec. & Power Co., 251 Va. ___, ___, ___ S.E.2d ___, ___ 
(1996), decided today.  This is such a case. 
 
Consequently, we hold there is no reversible error in the 
judgment of the trial court, and it will be 
 
Affirmed.